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Pricing Strategy for Atlantic Computer
Atlantic Computer was a leading player in the computer industry for long. It created new products as well as improve its existing products. Atlantic had a competitive advantage because it prioritized the production of reliable products, of high quality and also was responsive to customer complaints even after sales were made. Atlantic’s market share was significant because the company had its strategy based on product differentiation and customer’s intimacy. Jowers was only four months old at Atlantic, but he was ready to take the challenge of pricing for the new products- PESA and Tronn. Jowers is facing the challenge of pricing Atlantic’s latest products and is confused about the factors to consider for an optimum price. Jowers is weighing whether to use a cost-plus, competition-based strategy or remain with the company’s status-quo pricing strategy.
I would recommend that Jowers draws up a strategy that responds to market needs. Evaluating what customers expect is key to achieving a fair price. Jowers should go ahead with his plan of meeting with his customer to derive information on what the customer terms as helpful to them. With the information that he gets directly from his consumers, he will decide on what aspect of the products should be adjusted to serve and exceed customer expectations. Jowers should also consider setting a price that is lower than the competitor’s but bearing in mind that the price should not compromise the company’s profit margin for the sake of sustainability. Regarding choosing a pricing strategy that fits with the company’s status quo, Jowers should also consider the repercussions of adhering to Matzer’s strategy of giving out software tools to customers for free. Giving out PESA could freely translate to a loss in the company’s expected sales targets.
For Jowers to achieve a competitive pricing strategy, he should focus on exceeding customer expectations by satisfying the desirable features for every customer segment. He should also consider the level of product reliability for PESA and Tronn, as well as its quality. He should not set a price too low for the quality and reliable products since their cost of production was higher than ordinary primary products. He should also measure competition and choose a strategy that would not compromise Atlantic’s overall market share. Jowers should also avoid adopting status-quo pricing that compromises efficiency and effectiveness, even if his seniors introduced it. A strategy such as giving out software for free could harm Atlantic’s profit margin.