How to price water
Is water always a commodity?
Water is one of the most essential and important elements on earth but have you thought about how differently water can be priced? Why does a 1 liter bottle of water cost € 1 in one store while ½ a liter costs € 2 in another?
Perhaps the difference represents the customer value or is it just the difference in cost to serve that is reflected? Water comes through the tap at home, we can buy it in stores but it also comes in totally different forms, e.g. as perfume.
Now, you might argue that perfume is not water and that you cannot drink it and you are certainly right about that, but when we analyze the content of the perfume, it is nothing else than scented water. When we look at water in the form of a perfume we find that the difference in price between 1 liter and ½ liter of water in two different stores, being 4 times higher per cl for the latter, is so small that it is almost negligible. Perfume can cost more than € 2 000 per liter and you can ask if the reason is the difference in cost between pure water and the scent that is added to the water to make it smell so good? The answer is of course no.
