“more loyal to flavor than brand” (Page 5).
Positioning Statement: Among older adults, Vital-Aid is the only brand of Sports Drink that provides a healthy hydrating solution; containing powerful antioxidants that reduce the risk of many diseases including cancer.

Pricing strategy: Two pricing strategies can be used with new products Skimming and Penetration. Skimming strategy will help us reach our performance objective by covering high costs of development, sacrificing high sales for high profits while capitalizing on the price insensitivity of buyers. A Penetration strategy would not be beneficial because with a lower price and a higher production cost, our profit margins will be negatively affected and our performance objective will not be reached. o (20% – 22%) / 22% = .268 [ < 1 i.e. Price Inelastic]
($.79 - $.59) / $.59 o (15% – 20%) / 20% = .988 [ < 1 i.e. Price Inelastic]
($.99 - $.79) / $.79
Vital-Aid will be sold at the manufacturer price of $0.53 and the MSRP of $.79 per 20 Oz. Bottle. Although pricing 5 flavors at $0.79 manufacturer’s price will maximize profit, The Price Elasticity of Demand At both price points are Inelastic, which means that the consumers at these price points are less price sensitive. Because elasticity is the same, competition plays a large role in the pricing decision. The manufacturer’s price of $0.53 price makes sense because it is high (above other major competition) but below the market leader Croc-Ade, also our retail price will be the highest (equal to Croc-Ade’s), fitting in with our skimming pricing strategy. The manufacturer’s price of $0.66 would place our product $0.06 higher than the leading brand which may discourage retailers from carrying a risky new product when they can spend less and carry more of the low risk brand that they know will sell.

Channel strategy: Intensive Distribution because we are in a