Defining Factors Affecting Pricing Strategies

 Declining Demand - the fall in consumer demand for a particular

product or service brought on by the introduction of a new innovation,
replacement competition, or other circumstances.

 Supply Chain Disruptions and Inflation - Supply chain inflation can

have a knock-on effect on prices by driving up supply chain expenses,
which in turn drives up inflation and prices. Inflationary pressure at
the moment is a result of rising manufacturing costs, including those
for labor, raw materials, energy, and transportation.

 Price elasticity - Measures how responsive the supply and demand for
your product are to price fluctuations. The price elasticity of demand,
for instance, quantifies how many people will still buy your good or
service even if the price goes up.

 “Hardship” Price Reduction Requests - Due to the financial

difficulties that some of your clients will experience, they will want a
price reduction or discount.

 Increased Awareness of the Competition - Due to its convenience and

potential negative effects on store owners, the majority of individuals
nowadays are most likely to make purchases online.

 Technology and System - It will be more crucial than ever for pricing
systems to produce consistent data, and technology is essential to
attaining both speed and accuracy. As more customers switch to
online channels, this requirement will increase.

 Different approaches to gaining new customers -Unfortunately, a lot

of businesses will strive to oust a rival by offering low prices. This
carries a potential danger because it can plant the seeds of mistrust
among both the prospective consumer and the devoted old customers.
 Government - To raise prices and make domestic products more
appealing, governments can impose tariffs or create subsidies by
taxing the public and providing the money to a business. Increased
fees, taxes, and restrictions can cripple individual companies or entire
sectors of the economy.

 Price Fixing - refers to an agreement between market participants to

collectively raise, lower, or stabilize prizes to control supply and
demand. The practice benefits the individuals or firms involved in
setting the price and hurts consumers and firms on the receiving end.

 Marketing Mix - also known as the four P's of marketing, refers to the
four key elements of a marketing strategy: product, price, place and
promotion. By paying attention to the following four components of
the marketing mix, a business can maximize its chances of a product
being recognized and bought by customers.