Non-price competition is a type of competition in which any other methods are used, except for lowering prices. These methods may include the quality of the product itself or its advertising, information, product reliability, compliance with the promised characteristics, after-sales service, etc.
This type of competition is especially relevant in cases where there are certain legal restrictions on price reductions. However, quite often there are situations when companies use such methods even at price competition . Thus, price and non-price competition today are very often held in parallel to enhance each other's effect.
Non-price methods are mainly aimed at improving the quality of products, conditions for their sale and after-sales service. Improving the quality can be carried out in two directions: by improving the technical characteristics of the product (competition in the product) and by improving the adaptability of the product to consumer needs (competition in terms of sales).
Non-price competition is based on the desire to take possession of part of the industry market by introducing new products onto it that differ from the old model in improved characteristics. Improving quality serves as a way to hide price reductions and helps to expand sales, but the concept of “quality” remains a subjective assessment, making it possible to falsify it through beautiful advertising.
Non-price competition is conducted through cost reduction, which leads to minimizing prices as the main factor in consumer demand. Goods are promoted through improved service, packaging, delivery conditions and other marketing factors.
Improving sales is based on improving the service that accompanies the sales process and after-sale customer service. This includes advertising, improving trade, creating benefits for customers after purchasing goods.
In this case, the unique properties of the product, its quality characteristics, technical reliability, etc. come to the fore. It is these factors that make it possible to attract new customers. This suggests that non-price competition has a creative focus, in contrast to price, which is more characteristic of a destructive nature.
To maintain their place in the market, they often use tools such as price, delivery time , payment terms , warranty periods, advertising, quality and volume of service, and other events.
With the improvement of consumer properties of the product and maintaining sales prices, competent advertising helps to create the effect of “hidden discounts” from the price, which causes a positive reaction of the consumer.
Non-price competition is also used to penetrate the market with new branded goods or to supplant competitors with similar goods. In the world, the success of such competition is confirmed by certification, the 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, maintaining the original price, or even sell goods more expensive.
At the same time, non-price competition also creates a number of market problems. This is an intersectoral mechanism of profits, excess capacity, the influence of non-price factors on sales, competitiveness, consumption costs, consumer preferences. There is also a risk that consumers will not consider the seller’s offer as more attractive than their competitors, but rather prefer to buy cheaper products that they consider similar to more expensive ones.
Non-price competition methods include the following. These are methods of providing benefits by changing consumer characteristics, methods of sales promotion and methods of advertising and PR.