Pricing Strategy – Marketing
Incremental Break Even Analysis, Complements & Substitutes,Pricing and Distribution
KDrink Assignment
The KDrink Company sells bottled water for offices and homes. Theprice of the water is $20
per 10 gallon bottle and the company currently sells 2000 bottlesper day. Following are the
company’s income and costs on a daily basis:
Sales Revenue $40,000
Variable Cost $16,000
Fixed Cost $20,000
[Note: You can assume that variable costs are constant so that theaverage of them is also the
unit variable cost.]
The company is enjoying stable demand with its current pricing, butmanagement is looking
for ways to increase profitability. One suggestion is that thecompany reposition its water as a
premium product,
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