Master's Culminating Experience
InWord, a small non-profit creator and publisher of Bible studies, is funded largely by private donations. While these donations have been quite substantial, InWord wants to use this money as wisely as possible, and try to increase revenues and decrease costs to hopefully move toward a breakeven position. InWord is currently covering all variable costs, but are struggling to pay their fixed costs.
InWord sells two types of studies, a smaller (7 or less units for studying) and a larger study (8 or more) at two different price points ($39 and $49 respectively). In addition, quantity discounts are offered. Using InWord’s data on past sales I was able to use regression analysis to create a demand curve for both types of InWord’s studies. Based upon these demand curves I was able to determine that InWord was indeed charging a price that is close to the profit maximizing price, and therefore lowers their losses.
The analysis indicates that InWord should focus on lowering costs, and shifting their demand curve. An improved marketing effort could increase demand for InWord’s products, but a good marketing survey should be the first step. By increasing operating profits InWord should be able to reduce the dependence on donations.
Bellin, A. J.
(2005). A Price Analysis for InWord. .