State and explain five factors to consider while determining the price of your product or service

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Five factors to consider while determining the price of your product or service

Input costs: The higher the input costs, the higher the final price. An increase in labour or transportation could increase the final price.
Demand for the product: The higher the demand, the higher the production volume the lower the input costs, the lower the final price.
Target market: Income level of the target market
Type of product: Luxury products can be priced higher.
Pricing technique used to determine the price: Promotional pricing could be lower than demand oriented pricing.
Substitutes and complements: If there are similar products that could replace a product, a high price may result in loss of sales to the substitute.
If the price and demand of complement good increases, the other product may increase at the same rate, e.g. prices of computers and keyboards may increase at the same time.
The economic climate and availability of goods and services: When there is a shortage of a certain product, people are prepared to pay more for it.