Factors Affecting Product Selling Prices in Businesses from a Marketing Perspective

While the economy has demonstrated the importance of supply, demand, and market structure, marketing contributes to the practical considerations when businesses price their products. Pricing decisions are among the most significant and complex choices that marketing managers have to make. To determine an effective selling price, marketing managers must undertake a step-by-step process, from analyzing cost factors to pricing levels, performing comparative calculations to arrive at an optimal price, and constructing the final pricing structure. Prices are influenced by internal factors within the company as well as external elements. External factors affecting pricing decisions include competition, economic conditions, and other outside influences. Internal company factors encompass marketing-mix strategies, costs, and the company's marketing objectives.