water game Discussion Thread You discovered that the best strategy for winning the water game is to spend nothing on marketing. This strategy is sensible because the product under consideration is undifferentiated: It is bottled water bearing a generic brand. It is not sensible to spend money marketing such a product. Here's why. Imagine you're at Walmart looking to buy a 12-pack of bottled water. One 12-pack is priced at level A, depicted in Figure 1. A rival product-with identical contents and a fancier label-is advantageously positioned at eye level and priced at level B. Some consumers will buy product B, but most won't, given the undifferentiated nature of the product and its nearly identical positioning near substitute water products at Walmart. Figure 1. Image Depicting the Price Elasticity of Bottled Water Notice that sales of the B product will produce total revenue represented by the blue rectangle, whereas sales of the A product will produce much greater total revenue represented by the green rectangle. But wait; it gets worse. The provider of product B had to expend money on the fancier label and on the product positioning. Provider B cannot recover those expenditures because the market will not much tolerate a higher price for an undifferentiated product for which there is a ready substitute.