Consider for a moment how managers at Adidas might price their newest line of sneakers or how decision makers at Comcast would determine how much to charge for a monthly subscription for Internet service. How managers price a product or a service ultimately depends on demand and supply. Three influences on demand and supply are customers, competitors, and costs.
Customers influence price through their effect on the demand for a product or service. The demand is affected by factors such as the features of a product and its quality. Managers always examine pricing decisions through the eyes of their customers and then manage costs to earn a profit.