Jason Jowers, the product manager has to determine the price to be charged for the Atlantic Bundle (Tronn Servers + PESA software tool) taking into account the apprehensions of various constituents a. Matzer & the higher management at Atlantic Computers b. Cadena & Sales force
d. Competition (Ontario’s Zink product)
The pricing needs to be finalized within 2 weeks to be in time for the trade show in November. The biggest dilemma facing Mr. Jowers is inclusion of the costs incurred in the development of PESA software into the pricing of the Servers. Case Summary:
A new basic Server named “Tronn” has been newly developed by Atlantic Computers. This outperforms the rest of the servers in the industry by using a software tool called “PESA” (Performance Enhancing Server Accelerator Tool). One Tronn Server when used in conjunction with PESA performs better than four servers of the competitor (Zink server from Ontario Computers)put together, which is remarkable performance enhancement. The market for the basic servers in the next 3 years is encouraging with a compounded 36% growth. Atlantic Computers has invested $ 2 million in the development of PESA and needs to recover those costs. Traditionally, such software tools at Atlantic Computers have been handed over free of cost to the customers and most of the Atlantic team; like higher management and sales department intend to continue this trend. The product manager for Tronn server, Jason Jowers has to determine the price for the bundle package containing two Tronn servers and 1 PESA software license. Jason plans to demonstrate the capabilities and pricing details to one of the exemplary customers in the basic server segment and has identified DayTraderJournal.com. Following the conservative approach by his peers, Jason plans to demonstrate and bundle using two Tronn servers along with PESA, despite the fact that one server was capable of doing the job.