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Czarina Abigail D.

Other Internal and External
Considerations Affecting Price Decisions
Internal Factors

• Overall Marketing Strategy, Objectives , and Mix

• Organizational Considerations
• Marketing Strategy - is a long term, forward-looking approach to
planning with the fundamental goal achieving a sustainable
copetitive advantage.
• Marketing Objectives - group of goals set by a business when
promoting its products or services to potential consumers that
should be achieved within a given time frame.
• Marketing Mix – a combination of factors that can be controlled by
a company to influence consumers to purchase its products.
Organizational Considerations
• Who?
• Small Companies – top management rather than marketing or sales
• Large Companies – divisional or product line managers
• Industrial Markets – salespeople may be allowed to negotiate with customers
within certain price range, and they often have pricing departments to set the
best prices or help others in setting them

External Factors

• The Market and Demand

• Other Environmental Factors
The Market and Demand
Pricing in different types of Markets

• Pure Competition – consists of many buyers and sellers trading in a uniform

• Monopolistic Competition – consists of many buyers and sellers who trade
over a range of prices rather than a single market price.
• Oligopolistic Competition – consists of few sellers who are highly sensitive
to each other’s pricing and marketing strategies.
• Pure Monopoly – consists of one seller.
Analyzing the Price-Demand Relatioship

• Demand and Price are Inversely related

Price Demand
Price Elasticity of Demand
measures how responsive demand is to changes in a price of a given good.
More precisely, it is the percent change in quantity demanded relative to a one
percent change in price, holding all else constant (ceteris paribus).
Demand Curve
The Economy
• Economic Factors:
• Boom or Recession
• Inflation
• They Affect:
• Consumer Spending
• Consumer Perceptions (Price, Value)
Other External Factors

• Resellers
• Government
• Social Concerns
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