Discuss the factors that affect the market price of a product (part A) Essay

Discuss the factors that affect the market price of a product (part A) and (part B) describe the trend in world price of oil over the past two decades and discu - Essay Example However, the broader description of a product as anything that is made available in a market, as provided by Philip Kotler in his book Marketing Management needs to be taken into account in this discussion. In simple terms again, the price of any product is controlled by the demand of the product and the supply of the product and yet there are many factors that play a role on the supply side and the demand side of the product and it is these factors that need to be examined (Fletcher. T & Russell-Jones N. 1997. VALUE PRICING: How to Maximise Profits Through Effective Pricing Policies. Pp 14 to 43). The initial factors on the supply side are availability of the product and cost of production of the product. The greater availability of the product will tend to lower the price of the product. The more the cost of production the higher will be the price. The next factor is competition. Competition in normal circumstances is present for all products and acts as a control on prices, unless a single entity or a group of suppliers is in a position to dominate the supply of the product and therefore exact higher prices. (Competition and the Effects of Price Controls in Hawaiis Gasoline Market. 2003.). The next factor is legislative control on the price of the product in the market. Legislative action is normally used as a measure to protect the consumers from being over charged by suppliers. The next factor is changing markets. Changing markets could have a positive or negative impact on prices. The next factor is technology, which tends to increase efficiency and thereby reduce the pr ice of the products. Then we come to management strategies in terms of profit goals and growth objectives. These have an effect of raising the prices of a product. On the demand side there is only one factor and that is consumer demand for the product. Consumer demand is however controlled by the economic state of