CompQuestion 1: What price should Jowers charge DayTraderJournal.com for the ‘’Atlantic Bundle’’?
There are four pricing strategies where Atlantic computer can choose from. These strategies are: status-quo pricing, competition-based pricing, cost-plus pricing and value-in-use pricing. Each strategy has a calculation and a price outcome. Below I will describe all strategies and all advantages and disadvantages of that particular strategy.
1. Status-quo pricing: Status-quo pricing | Price of Tronn server | $2.000 | Price of PESA | FREE | $0 | Total price of Tronn with PESA | $2.000 | Price of ''Atlantic bundle'' | $4.000 |
In this case the Atlantic Computer company sticks to the tradition by charging only for the hardware,
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So the price of four Zink servers, $6,800 dollar, also equals 2 Tronn servers with PESA software. So the price of a Tronn server will be $3,400 dollar using the competition-based pricing. Customers will notice that there are no price difference anymore. The PESA software made the Tronn server attractive to a lot of customers but the software is not always working on all software applications. Customers than have to buy 4 Tronn server for twice the price of Zink servers. Customers would than consider not to buy the Tronn servers because they don’t see it as a fair price compared to the Zink servers.
3. Cost-plus pricing: Cost-plus pricing | Total sales number basic segement 2001-2003 | 21.180 | Total number of installations, using the attach rate of 50% | 10.590 | Cost of PESA per installation ($2.000.000/10.590) | $189 | Price of Tronn without PESA (Cost price with additional markup of 30%) | $2.000 | Price of Tronn with PESA (Cost price with additional markup of 30%) | $2.245 | Price of ''Atlantic bundle'' | $4.490 |
In this case the price is determent by calculating all the costs, fixed costs included, and spread all the costs out of all purchased items. In this case you have to determine the number of purchases. In table 1, it is been calculated. The total number of purchases in 2001 until 2003 is 21,180. Only 50% will use the PESA software, so about 10,590 units will carry the PESA software development cost of
250,000 + 5,000 + 57,500 = 312,500 total base . 250,000/312,500 = 80% of the actual price of the arrangement to be allocated to the software. 5,000/ 312,500 = 1.6% of the actual price of the arrangement to be allocated to the installation. 57,500/ 312,500 = 18.4% of the actual price of the arrangement to be allocated to the technical support. The relative price of the software would be $240,000, the relative price of the installation would be $4,800 and the
Chapter 2 “The Rise of the Atlantic World” Footholds in North America Spain’s Northern Frontier • Spanish got their New World empire started by crushing Aztecs and Incas • Juan Ponce de Leon o Founded Puerto Rico and Florida o Killed by Native Americans (Calusa) • 300 settlers provoked Apalachee Natives o Split into groups 4 survivors – Cabeza de Vaca and company arrive in Mexico De Vaca made alliances with Natives along the way Inspired other Spaniards to go look for gold • Hernando de Soto o In search of gold in Tampa Bay-Appalachian Mtns-southern Plains o Natives confronted him in Mississippi (Maliba) De Soto won, but his victory cost him lots of resources o Found no gold, but spread diseases that killed Native Americans in Mississippi
Alternative solutions: We studied four different alternatives: cost +, EVC, price differentiation and contingency pricing.
The important part of the Atlantic system was the Middle passage because that was a key route for slaves to travel by ships, and the route was from West Indies to the West Africa. Generally, the Sugar Industry did improve the economy which impacted people in a good way because people started connected with each other.
Thank you for sharing your thoughts! Your post caught my attention and I started trying to think of reasons or the thought process behind the defining of the boundary areas we are discussing this week. I can totally see what you mean about being surprised the Atlantic Periphery not include Connecticut, Massachusetts and Rhode Island when you look at the map of the region. Perhaps, the reasoning for why they are not included relates to the significance that Boston has played in the growth and development of US history. The location of Connecticut and Rhode Island in regards to the rest of the Megalopolis region could be why they are included as well. Their economies could be more dependent on tourism or by acting as bedroom communities
In other words, you will be sharing the charter with other people. The price will be based on the number of people for a certain number of hours.
Perhaps one of the most difficult managerial decisions in the 21st century is the decision to make a decision. Analysis paralysis, endless meetings, and corporate structure have made it painstakingly difficult to come to any real conclusions. So when the Chief Financial Officer, Bruce Berman, of Bloomindale’s was tasked with decision to implement ProfitLogic’s Pricing Optimization (PO) system, he called upon Daniel Gabbay, an analyst in the finance division, to make sense of the numbers and guide his decision making process. Berman was considering implementing a PO system to quantify the markdown
When considering the Atlantic World, we tend to think about the history of how it all began, the middle, or the passage of the slaves from the Old World to the New World, and lastly, how it all came to an end. But in between the beginning, middle, and end there is much more than what we believe it to be. We must gain a complete understanding of why these people came to the justification of their actions and how it molded the interpretation for centuries after the “beginners.” Throughout the migration of people from the Old World to the New World, a variety of historical perspectives were gained as well as lost. One in particular being that of human beings. We can then begin to question whether this is something that was gained or lost within the lines of migration.
We can calculate the expected revenue generated by each pricing strategy, but without cost information, it is not possible to determine the preferred price. The cost concepts we introduce are:
Based upon the alternatives mentioned above, Atlantic Computers would be best suited to price their servers using the conservative approach to the competition based pricing, selling their servers for $3,400. Out of the four alternatives presented, this option would provide the best return to Atlantic while still providing value to their customers without having to significantly overcharge. When compared to the Status Quo method, Atlantic will be able to recoup the costs related to the software by charging an additional $1,400 per server. Based on the assumptions from the cost-plus method about Atlantic’s market share in the basic server market, using status quo, Atlantic would recognize roughly $42 million over the next three years compared to roughly $72 million under the competition based, a value of $30 million that would be foregone if they go with the status quo approach.
In the case, it mentioned that, conservatively, one Tronn server equals to two Zink servers; Aggressively, one Tronn equals to four Zink servers. Within the premise that Matzer and his colleagues were quite conservative, he decided to compare two basic servers loaded with the PESA versus four basic servers. In this case, therefore, we calculate the price of Atlantic Bundle with the assumption that two Atlantic Bundles is the equivalent of four Ontario Zink servers.
There are many different types of pricing strategies that can be used; however, there are three pricing strategies that are more commonly used with entrepreneur than the other pricing strategies. These three pricing strategies are: penetration pricing strategy, skimming, and life-cycle pricing.
The overall pricing strategy of any company depends upon the type of demand that is being made by the
The best strategy for you will depend on your firm, your product and your market. Remember that you do not have to use just one of the strategies outlined above. Many firms, in fact, use more than one approach and arrive at a price that represents a reasonable compromise between each of these strategies.
|Pricing decisions are made on two levels. Typically, pricing strategy is developed with a long-term view to price levels and positioning, and |