CEVAP:

The internal factors affecting price decisions are;

1. Costs: Cost is the lower limit of price (or price floor). There are different kinds of costs including fixed costs, variable costs, and total costs. Fixed costs refer to costs which are independent from the level of production. For example, rental fee should be paid monthly regardless of production or sales level. Variable costs are the ones that vary based on production level. For instance, inputs of a car such as materials, tires, etc. vary with the level of production. Total costs include both fixed costs and variable costs for a given production level.

2. Pricing aims: Pricing aims include survival, financial, and marketing aims. Survival aims cover the short-term and try to carry on the activities of the company. Financial aims such as profit maximization or cash flow focus on the medium term.

3. Other Marketing Mix Elements: Product, place, and promotion should give messages
to consumers in the same direction with price.