Section 1

  1. The “Atlantic Bundle” should use a value-in-use pricing strategy.
  2. $2,500 per Tronn server with PESA software
  3. Sales force will have a tough time selling the increased cost of the servers to the end customer based on software; the standard in the marketplace is that this software should be free. Also, they will be concerned with a smaller commission with fewer servers being purchased by each customer. To motivate the sales force I would reiterate that this software option isn’t simply a unique tool, but has a real effect on the bottom line of a company in terms of financial savings. To motivate them regarding the smaller commission, reiterate that market share will increase which will increase commissions.
  4. To basic computer server users, Tronn server with PESA software is the brand of basic computer servers that will reduce overall website management costs because fewer servers are required to perform the same amount of processing work.

Section 2
  1. The “Atlantic Bundle” should use a value-in-use pricing strategy because of the ability to communicate the cost savings to the customer. While it is a software product added to the server, and it does cost more than the basic server without the software option, fewer server costs are involved which results in a real financial benefit for the customer ordering their product. Putting myself in the shoes of the customer, I would gladly pay more for a software add-on if it meant that I would pay much less, overall, to manage my servers.

  2. I calculated this price by adding the annual electricity cost to the cost of application software ($250+$750=$1,000) and then divided this by two ($500) and added it to the cost of the basic Tronn server to get a total of $2,500. So not only does the customer have to buy half as many servers (being conservative) they will also save $500 in costs to run that additional server, netting them a savings of $2,500 per Tronn server with PESA software compared to the competition.
  3. The sales force will struggle with this argument because it is a significant change in customer perception to industry norms. The customer will expect the software to be free, but it is the job of the sales people to really convey the actual costs savings for the customer.

    Once that has been clearly communicated, it should be easy to sell the customer a Tronn server with PESA software as there is a direct savings to the customer. $500 additional cost per server, to save $2,500 that would have had to have been spent on an additional server purchase. They can also point to the fact that fewer servers means that fewer administrators will be needed to manage the volume, which is another significant cost savings to companies using a number of servers. The sales force may also struggle with the fact that fewer servers will be purchased because of this cost savings, which will reduce their initial commission. But as the market becomes more aware of these cost saving servers, the market share of Atlantic Computer in the basic server market will go up significantly which means more sales, overall, to each member of the sales force.

  4. What is important to convey to the customer in the positioning statement is that the basic servers that will be purchased through Atlantic Computers with PESA software represent a real cost savings to the customer. They have a leg-up on the competition regarding this developed software and this translates to a real financial benefit. It’s now the job of the sales force to make use of this positioning statement and product benefits to increase the overall market share that Atlantic Computers occupies in the basic computer server segment.