Theme about Atlantic Computer

The fact that he Is relatively new In the company plays a significant part In this case. Atlantic Computer, is a large producer of servers and other high-tech products, and was the largest player in the overall computer industry. It had been competing in the server market for 30 years by selling its high-end performance servers, called Radii, to large enterprise customers.

Also, The firm in general and its Server Division in particular had come to be known for providing top-notch, highly reliable products, and had developed a reputation for providing high quality, responsive post sales assistance. This was a direct result of their overarching strategy being based on customer Intimacy and product differentiation. There are two main market segments in the server Industry, largest segment Is High Performance Servers, represents the traditional use of servers to run complex applications.This segment Is expected to demand approximately 200,000 units next year and Is projected to grow around 3% annually the following two years.

Atlantic has been a strong player in this segment and has captured 20% of the revenue market share. Emerging with the growth of the Internet, is a newer segment for Basic Servers. The Internet and the proliferation of applications in the late sass had changed all that. For instance, a company could now build a website by utilizing several smaller basic servers that shared the work.Given the projected growth for low-end, basic servers the company decided to stretch the division's product line downward with the goal of introducing a model called the Trogon.

The Trogon, been developed specifically to meet an emerging U. S. Marketplace opportunity. The tool, called the "Performance Enhancing Seen. 'ere Accelerator," or PEAS, would allow the Trogon to perform up to four times faster than Its standard speed.

It was specifically designed to make frequently requested Information extremely accessible.It is clear that Cowers as a new employee needs to pay attention to the politics of the company, meaning the way it is run. The company by its business model, sale strategy and overall management is very traditional and old-fashioned, which can cause lowers to get in conflict of an opinion with the management. Furthermore, he need a good strategy to adequately relay his ideas to the senior management. One of the main demand issues In my opinion is the fact that the company is basing it sales solely on hardware, and giving the software for free.

The software, in this case PEAS could be the mall demand determinant, and by marketing It right and changing the company's policy on "free software", not only that they can bust the demand, but generate more Income by actually charging for It. This would lead to hiring more footwear engineers to work on PEAS and producing it more and ultimately upgrading bundle" and making the customers realize that by buying it together will save them money on additional servers, electricity, software license fees, and labor costs etc.The fact that a director of sales is not present in a marketing meeting tell us that he is not considered as a valued asset. Furthermore the way the sales department is operating is also an issue at this day and age. High-touch direct sales channel might be considered old fashioned, with internet and all sorts of other marketing tools that can be used to boost demand. The structure and sales people ability to adopt the idea to think of PEAS as main resource in selling the bundle, as well as their determination and willingness to follow lowers idea might be one of the biggest issues.

Ultimately, they are the ones who are going the sell and generate demand for the product, and they need to me 100% committed. All of this issues are very important because all together they can make or break the product and its success in the market. Lowers idea to identify an exemplary customer from the most feasible segment in discussing his proposed of pricing strategy would be most effective.By owing so, lowers will adequately rely the idea that this customer will save on buying less servers and will reduce their initial purchase expenses and subsequent possession costs. Also, other approaches that could be used to develop the pricing strategy of the Atlantic Bundle like: included status-quo pricing, competition-based pricing, cost-plus pricing as well as value-in-use pricing for the exemplary customer instead of the most standard cost-plus approach that the company had used.

The value-in-use pricing will require him to demonstrate the savings from the company perspective and supply the tools on how to do so. In my opinion this is the best option because it will practically show the customer what they are gaining compared to buying from competition and will have a direct effect on the customer demand of the Atlantic Bundle.Basic server market should demand about 50,000 units in 2001 , and register about a 36% compound annual growth rate through 2003. By not pricing the Trogon correctly, meaning pricing it less, the company approach to sales structure might affect supply, because the sale people will have no incentive to sell it due to their 30% commission, but rather sell the Premium model servers, which will ultimately effect supply of Atlantic Bundle.

Also, the price of PEAS, if not given away will raise the expectation of producers (one of the factors that shift supply), which could lead to software engineers asking more money, or leaving and starting developing the software for them self's, which would also effect supply. Due to all above mentioned challenges, and my opinion of the demand issues, for the supply option I would recommend option number 4. It would set price of PEAS by trying to capture a portion of what a customer would save by buying a company's product.