Microsoft Word marketing doc

Factors influencing pricing 
Two categories of factors influence the pricing decisions of any 
company. 

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Internal factors
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Corporate and marketing objectives of the firm. 
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The image sought by the firm through pricing. 
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The basic characteristics of the product. 
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The stage of the product in its life cycle. 
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Price elasticity of demand of the product. 
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Use pattern and turn round rate of the product. 
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Costs of manufacturing and marketing. 
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Extent of distinctiveness of the product and extent of product 
differentiation practiced by the firm. 
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Other aspects of the marketing mix of the firm and their interaction 
with pricing. 
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Composition of the product line of the firm. 
External factors 
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Market characteristics. 
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Buyer behaviour in respect of the particular product. 
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Extent of bargaining power of major customers. 
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Computorious pricing policy. 
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Government controls regulation/pressures on pricing. 
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Other relevant legal aspects. 
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Societal for social considerations. 
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Understanding if any, reached with price cartels. 
Price setting procedure 
A large number of factors have to be taken into consideration in price 
setting and the company has to adopt a proper procedure for it. 
Selecting the pricing objective 
The first step in price setting is to carefully select the objectives that are 
to be pursued by a company through its pricing. A company may aim at many 
objectives, but the most important and common objectives are survival, current 
profit maximization, market share leadership and product quality leadership.