What is one of the external influences on price?

Technological innovation is a significant external influence on price because advancements can alter production processes, reduce costs, and introduce new products that change the competitive landscape. When technology improves, companies can often produce goods more efficiently, which can lead to lower prices for consumers. Additionally, new technologies can create new markets or disrupt existing ones, prompting businesses to adjust their pricing strategies accordingly.

For instance, the emergence of e-commerce technologies has changed how retailers price products, often leading to more competitive pricing due to greater transparency and price comparison options for consumers. As technology continues to evolve, it can lead to shifts in consumer demand, which further influences pricing strategies.

Market segmentation, consumer perception, and sales forecasts are all important factors in determining pricing strategies but are more internally focused. Market segmentation looks at dividing consumers into groups based on specific criteria to tailor marketing strategies, while consumer perception pertains to how customers view a brand or product, influencing their willingness to pay. Sales forecasts provide predicted demand for products but are often based on internal data rather than external influences.