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Pricing Strategy and Channel Distribution Pricing Strategy Essay
Pages:4 (1090 words)
Sources:2
Subject:Business
Topic:Competitive Strategies
Document Type:Essay
Document:#40759995
Pricing Strategy and Channel Distribution
Pricing Strategy .
Pricing Tactics
Legal and Ethical Issues Related to the Pricing Tactics .…
Marketing Distribution Channel Analysis
Distribution Strategy Fitting Marketing Objectives & #8230
In this case, Atlantic Computers has a plethora of various pricing strategies available to use for its interesting new server. The server has a unique software component which if it is installed with the server as a package then the server becomes extremely more productive in processing certain computing tasks. In fact, for some users the software used in conjunction with the server can perform as well as four servers from a competing vendor. This position represents the source of the pricing dilemma. The company can used a traditional cost-plus pricing structure or they could focus on value pricing. It is recommended that server and software price be set roughly at a level that would be slightly less than three of the competitor's systems. Furthermore, while the server can be priced through the traditional method, the pricing strategy should focus on the server's software to achieve pricing objectives as this was identified to be the most advantageous strategy for the Atlantic Computer company.
Pricing Strategy
A plethora of various pricing strategies were considered in regards to Atlantic Computers position with the new product group that it plans to bring to market in the near-term. However, the company's situation actual involves two separate products that may or may not be used in conjunction. The server can operate without the software system nearly as well as it can without the software for certain functions. However, for other processing functions the software makes the server nearly four times more productive. Therefore the niche segment for the two products to be used in conjunction would only apply to certain customers and certain applications.
Thus it was determined that each separate product could have its own pricing strategy individually which could work in conjunction to take full advantage of the unique opportunity the server and software provide to the specific niche market that was identified. Furthermore it is recommended that the actual physical server be priced along the lines of a penetration strategy while the software on the other hand could be priced on a skimming strategy. The costs of the conjunction of the two products can also represent a unique strategy that would be tailor to that particular niche market.
Pricing Tactics
The pricing tactics should again be different for each product. The servers were identified to be most likely to maximize profit with either a cost-plus strategy or a competitive strategy. If the production capabilities are sufficient to cover the increase in demand than Atlantic Computers should attempt to still market share from their competitor, Ontario Computers, by making its server price more competitive. Therefore if production can handle the demand then the Tronn basic should be priced at $1,850 dollars which would help with market penetration.
The PESA software tool on the other hand should be priced in regards to a value model. There are two separate segments that would benefit greatly from the software. These segments are the customers who will predominantly use their servers for either file sharing or as web servers. The software tool helps the server run nearly twice as fast for…
Sample Source(s) Used
References
Iacobucci, D. (2011). Marketing management: 2010 custom edition. Mason, OH: South-
Western C-ngag? Learning.
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