4 Internal Factors of Pricing

Four Internal Factors of Pricing:
1) Marketing Objectives: The marketing department has to keep in mind the price of the product/service so the company can be profitable and survive. They also have to set the price so that it maximizes profit, without charging too much. Trying to obtain market share leadership is also another factor of pricing. Product quality leadership, limit pricing (set the price so low so nobody will enter the industry because profit is so low) and promotional pricing (pre-xmas sales, black friday) are all other key factors when it comes to figuring out the price of the product or service.
2) Marketing Mix Strategy: pricing is one of the four P's in marketing mix strategy.
Target Costing: sets an ideal price then controls cost to make it possible to make product at that price. ex: p&g's crest spinbrush electric toothbrush. An alternative will be to price according to the product quality.
3) Cost: marginal cost pricing is used in regulated industries.
4) Organizational considerations: in small companies, prices are often set by top management. In larger companies, price is set by divisional or product line managers. Salespersons usually have flexibility to negotiate within a price range.