Internal Factors Influencing Price: Company

i. Impact of Other Marketing Activities

Pricing is closely linked to how a company promotes and sells its product. For example, if a company spends a lot on advertising or uses attractive packaging, the price may be higher to cover those costs.

✅ Example (Malaysia):
Tealive spends money on branding, advertising, and trendy outlets. Because of these activities, their drinks are priced higher than regular pasar malam drinks.

ii. Corporate Pricing Policies

Every company has its own pricing rules or guidelines. Some companies always aim to keep prices affordable, while others focus on high-end pricing for premium products.

✅ Example (Malaysia):
Proton follows a strategy to offer affordable cars to Malaysians, while Mercedes-Benz Malaysia prices its vehicles higher to match its luxury brand image.

iii. Impact of Price on Other Parties

A company must also consider how its pricing affects others in the supply chain like distributors, retailers, or even customers. If the price is too high, retailers may find it hard to sell; if too low, they may earn little profit.

✅ Example (Malaysia):
When Nestlé Malaysia prices its Milo product, it ensures supermarkets like Tesco and Aeon can still make a profit while keeping the price attractive for customers.

iv. Gain and Risk Sharing Pricing

Sometimes, the seller and buyer agree to share the risk or profit. This pricing method is common in project-based businesses like construction or custom services.

✅ Example (Malaysia):
A contractor company in Kuala Lumpur builds a school under a government project. The price includes clauses where the contractor and the government share the extra cost if material prices go up during the project.

Internal Factor Influencing Price: Marketing Mix Strategies

Pricing is not a decision made alone. It must match the other elements in the marketing mix – known as the 4Ps:
Product, Price, Place, and Promotion.

When a company sets its price, it needs to make sure the price fits well with:

1. Product Strategy

The price must reflect the product's quality, brand image, and uniqueness.

✅ Example (Malaysia):
Petronas sells high-quality engine oils like Petronas Syntium. Because the product is premium and linked to Formula 1, the price is set higher to reflect its high quality.

2. Place (Distribution) Strategy

If a product is sold in high-end stores or popular shopping malls, the price may be higher to match the environment and target market.

✅ Example:
Kenny Rogers Roasters sets higher prices in KL shopping malls compared to food stalls in smaller towns, because the place influences the customer’s expectations.

3. Promotion Strategy

The more money a company spends on advertising and branding, the more likely it is to set a higher price to recover that cost.

✅ Example:
Safi Rania Gold is advertised heavily on TV and social media as a premium skincare brand for Muslim women. The strong promotion supports a slightly higher price.

4. Price Strategy Must Match the Whole Mix

A company can’t promote a product as “premium” but then set a very low price—it will confuse customers. All elements must be aligned.

✅ Example:
Batik Boutique, which sells hand-made batik fashion, promotes itself as a high-quality, artisanal brand. So, the price must also be higher to match the brand image, store layout, and product design.