Price is perhaps the most important of the four Ps of marketing, since it is the only one that generates revenue for a company. Price is most simply described as the amount of money that is paid for a product or service. When establishing a price for a product or service, a company must first assess several factors regarding its potential impact. Commonly reviewed factors include legal and regulatory guidelines, pricing objectives, pricing strategies, and options for increasing sales.

Legal and Regulatory Guidelines

The first major law influencing the price of a company's product was the Sherman Antitrust Act of 1890, passed by Congress to prevent a company from becoming a monopoly. A monopoly occurs when one company has total control in the production and distribution of a product or service. As a monopoly, a company can charge higher than normal prices for its product or service, since no...