FACTORS AFFECTING PRICE● INTERNAL FACTORS

2. Factors affecting price● Internal factors: - Marketing objectives: Survival, Profit maximization, Market-sharemaximization, Product-quality maximization- Marketing-mix strategy - Costs+ Fixed costs: do not vary with production or sales level+ Variable costs: vary directly with the level of production+ Total costs: The sum of the fixed and variable costs for any given levelof production+ Classify these costs: factory rent bill, employee salary, incentive, fuelcost, insurance- Organization+ There are many parties getting involved in pricing including topmanagement, sales managers, production managers, finance managersand accountants.● External factors- Nature of the market and demand+ Oligopolistic competition— A market in which there are a few sellersthat are highly sensitive to each other’s pricing and marketing strategies+ Pure monopoly: A market in which there is a single seller – it may be agovernment monopoly, a private regulated monopoly or a private non-regulated monopoly.- Competition+ What are the pricing options for these cases:Product A > Product BProduct A = Product BProduct A < Product B- Other environmental factors+ Economic conditions+ Resellers+ Government+ Social concerns