5.1 Factors Affecting Price Decisions

Marketing Objectives

		Some important factors that guide pricing decisions are positioning and target market.
		Once a company position itself amid of competitors or in the absence of them, then it is easier to handle pricing.
		So when target market is well defined it will be much easier to set price for the product.
		Thus pricing strategy is largely determined by decisions on market positioning (Kotler and Armstrong, 2004).
		Other objectives that can shape the pricing decision of a company are expected profits level, market share, survival, market leadership and quality product among others.
		For example a public institution may employ partial cost recovery.
		This will obviously affect how much it will charge customers.
		However, this price cut is considered as a way of achieving the bigger objectives of public welfare.