Their response will depend on the degree of price sensitivity, influenced by:

• The unique value of the product
• The substitute awareness of the consumer
• The difficulty a buyer has in making price comparisons
• Total expenditure required for the product type (i.e. proportion of consumer's income)
• The importance of the end benefit
• Sunk investment - relationship of the product to previously purchased products.
• Shared cost - sensitivity is reduced if there are multiple purchasers
• Price-quality perception
• Whether the product is inventoriable/storable

6. Costs: includes the relationships between fixed and variable costs; economies of scale available to a firm; cost structure of the firm compared with competitors; learning curve (experience effect).

Other factors influencing pricing strategy: the firm's product range and interrelationships within it, the existence or scope for unique selling propositions, the degree of product differentiation, resources, the firm's market position; previous strategies; the nature of the market, opportunities for market growth and demand elelasticities; the need for credit; inflation rates; cost of raw materials; (in international markets) currency fluctuations.