Factors Influencing Pricing

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Factors Influencing Pricing

Pricing of a product is influenced by various factors as price involves many variables. Factors can be categorized into two, depending on the variables influencing the price.

Internal Factors
The following are the factors that influence the increase and decrease in the price of a product internally −

#Marketing objectives of company

#Consumer's expectation from company by past pricing

#Product features

#Position of product in product cycle

#Rate of product using pattern of demand

#Production and advertisement cost

#Uniqueness of the product

#Production line composition of the company

#Price elasticity as per sales of product

Internal factors that influence pricing depend on the cost of manufacturing of the product, which includes fixed cost like labor charges, rent price, etc., and variable costs like overhead, electric charges, etc.

External Factors
The following are the external factors that have an impact on the increase and decrease in the price of a product −

#Open or closed market

#Consumer behavior for given product

#Major customer negotiation

#Variation in the price of supplies

#Market opponent product pricing

#Consideration of social condition

#Price restricted as per any governing authority

External factors that influence price depend on elements like competition in market, consumer flexibility to purchase, government rules and regulation, etc.



Source: https://www.tutorialspoint.com/marketing_management/marketing_management_pricing_decision.htm