- Published: September 11, 2022
- Updated: September 11, 2022
- University / College: The University of Queensland
- Language: English
- Downloads: 4
1.- What Price should Jowers charge DayTraderJournal. com for the Atlantic Bundle (that is, Tronn servers + PESA software tool) according to the following four criteria? Option A): Status-quo pricing
$4000 for the Atlantic Bundle.
Option B): Competition-based pricing
$6800 for the Atlantic Bundle.
Option C): Cost-plus pricing
$4491. 04 for the Atlantic Bundle.
Option D): Value-in-use pricing
$8400 for the Atlantic Bundle.
2.- Think broadly about the top-line revenue implications from each of the four alternative pricing strategies. Approximately, how much money over the next three years will be “ left on the table” if the firm were to give away the software tool for free (that is, status-quo pricing) versus utilizing each of the other pricing approaches? 1) The revenue from status-quo pricing will be $42, 360, 000.
2) The revenue from competition-based pricing will be $72, 012, 000. 3) The revenue from cost-plus pricing will be $47, 560, 113. 60. 4) The revenue from value-in-use pricing (maximum value) will be $135, 552, 000. 5) The revenue from value-in-use pricing (shared value) will be $88, 956, 000.
3.- How is Matzer likely to react to your recommendation?
The most advisable recommendation would be to sell the Atlantic Bundle at the cost-plus pricing approach of $4491. 04. This is advisable for several reasons. The first being that although the revenues are the highest from value-in-use pricing approach, this pricing is significantly above what customers are currently paying. Since customers are paying $6800 for the competitors servers a payment of $12800 for our servers would be too steep of an increase. In addition, since we are marking up our products at 30%, we will guarantee a profit of at least 30%. Lastly, pricing our
4 a).- How is Cadena´s sales force likely to react to your recommendation? 4 b).- What can Jowers recommend to get Cadena´s hardware-oriented sales force to understand and sell the value of the PESA software effectively?
5.- How are customers in your target market likely to react to your recommended pricing strategy? What response can be provided to overcome any objections?
6.- How is Ontario Zink´s senior management team likely to react to the Atlantic Bundle?
