The importance of price and non-price competition

Firms compete for market share and the demand from consumers in lots of ways. We make an important distinction between price competition and non-price competition.

Price competition involves discounting the price of a product (or a range of products) to increase demand.

Non-price competition is a marketing strategy in which one firm tries to distinguish its product or service from competing products on the basis of attributes like design and workmanship.
The firm can also distinguish its product offering through quality of service, extensive distribution, customer focus, or any other sustainable competitive advantage other than price.
  • Mass media advertising and marketing
  • Store Loyalty cards
  • Banking and other Financial Services (including travel insurance)
  • Home delivery systems
  • Discounted petrol at hyper-markets
  • Extension of opening hours (24 hour shopping in many stores)
  • Financial incentives to shop at off-peak times
  • Internet shopping for customers

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