Some consumer segments are sensitive to price, but others may not be. Thus, before determining price, a marketer needs to be aware of its importance to the target market. Knowledge of the prices charged for competing brands is essential so that the firm can adjust its prices relative to those of competitors. Government regulations and legislation influence pricing decisions. Congress has enacted several laws to enhance competition in the marketplace by outlawing price fixing and deceptive pricing.
Legislation also prohibits price discrimination .
Moreover, the government can invoke price controls to curb inflation. Unlike consumers, organizational buyers purchase products for resale, for use in their own operations, or for producing other products. When adjusting prices, organizational sellers take into consideration the size of the purchase, geographic factors, and transportation requirements. Producers commonly provide discounts off list prices to intermediaries. The categories of discounts include trade or functional discounts , quantity discounts , cash discounts , seasonal discounts , and allowances .