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Factors Affecting Price


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Marketing 6621

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Factors Affecting Price

  1. 1. Buyers and many sellers all dealing in an identical product. Neither producer nor user has any market power and both must accept the primary market price.
  2. 2. One seller who dominates many buyers. The Monopolists can use this market power to set a profit-maximizing price.
  3. 3. Large number of suppliers offer similar but not identical products. These slight differences give monopolistic power to the supplier.
  4. 4. Relatively few competitive companies dominate the market, with each company having the ability to influence the market price.
  5. 5. Total cost of materials, energy and labor to produce a good/service.
  6. 6. Since pricing affects if and how much of a good/service a customer will buy; the price will also be part of the decision to make/sell certain products.
  7. 7. Shipping long distances can cause the price of the product to rise. Understanding this cost and what customers are willing to buy are part of the decision in distribution.
  8. 8. When determining price and promotion plans, businesses have to consider the type of market and competition that currently exist.