What are the major factors affecting the pricing strategy of firms?

Product pricing may depend heavily on the productivity of a manufacturing facility (e.g., how much can be produced within a certain period of time). The marketer knows that increasing productivity can reduce the cost of producing each product and thus allow the marketer to potentially lower the product's price.

However, increasing productivity might require large changes at the manufacturing facility that will take time and money and will not translate into lower price products for a considerable period of time.