Price setting is defined as the consideration of all internal and external factors that influence pricing.
Internal factors are based on aspects such as the cost structure of a company, i.e. the allocation of variable and fixed costs, but also on marketing and corporate objectives such as the cross-subsidization of products. The external factors, on the other hand, deal with influencing factors that affect the market environment. These include legal and regulatory requirements, the price level of relevant competitors or the price elasticity of the market. The aim of pricing is to derive the optimal pricing strategy, taking into account all internal and external factors.