Non-price competition

Non-price competition is a kind of competition in which any other methods are used, other than reducing prices. These methods can include the quality of the product itself or its advertising, information, product reliability, compliance with promised characteristics, post-implementation services, etc.

This kind of competition is especially relevant in cases when there are certain legal restrictions on price reduction. However, quite often there are situations when companies use such methods even with price competition . Thus, price and non-price competition today are often conducted in parallel to enhance each other's effect.

Non-price methods are mainly aimed at improving the quality of products, the conditions for its implementation and after-sales service. The quality improvement can be carried out in two directions: by improving the technical characteristics of the product (product competition) and by improving the adaptability of the goods to consumer needs (competition in terms of sales).

Non-price competition is based on the desire to seize a part of the industry market by bringing new products to it that differ from the old model with improved characteristics. Improving quality serves as a way to hide the decline in prices and helps to expand sales, but the concept of "quality" at the same time remains an assessment of the subjective, giving the opportunity to falsify it through beautiful advertising.

Non-price competition is carried out by reducing costs, which leads to the minimization of price as the main factor of consumer demand. Goods are promoted through improved service, packaging, delivery conditions and other marketing factors.

Sales improvement is based on improving the service that accompanies the sales process and the after-sales service of customers. This includes advertising, improving trade, creating benefits to customers after buying goods.

In this case, the unique properties of the product, its quality characteristics, technical reliability, and so on come to the fore. It is these factors that attract new customers. This suggests that non-price competition has a creative direction, in contrast to price, which is more destructive.

To maintain their place in the market, most often use tools such as price, delivery time , payment terms , warranty periods, advertising, quality and volume of service and other activities.

When improving the consumer properties of goods and preserving sale prices, competent advertising helps create the effect of a "hidden discount" from the price, which causes a positive reaction of the consumer.

Non-price competition is also used to penetrate the market with a new branded product or to drive out competitors with similar products. In the world, the success of such competition is confirmed by certification, technical level of goods, etc., and not by low prices. An important role is played by the design of the goods. All this allows you to increase sales, keeping the original price, or even sell the product more expensive.

At the same time, non-price competition generates a number of market problems. This is an interindustry mechanism of profits, surplus capacity, the influence of non-price factors on the volume of sales, competitiveness, consumption costs, consumer preferences. There is also a risk that consumers will not consider the offer of the seller as more attractive than that of its competitors, but prefer to buy cheaper goods, which they consider similar to more expensive ones.

Non-price methods of competition include the following. These are methods of providing benefits by changing consumer characteristics, methods of sales promotion and methods of advertising and PR.