Non-price competition

Non-price competition is "a selling strategy in which one firm tries to distinguish its product or service from all competing products on the basis of attributes like design and workmanship" (McConnell-Brue, p. 437-438). It is the opposite of price competition, where one company tries to distinguish its product or service from all competing products on the basis of cheap products. Oligopolies usually engage in non-price competition, involving advertising and brand promotion.

Firms will engage in non-price competition to avoid damaging price wars, the competition involves the use of free gifts, coupons and other special offers. These kind of offers are much profitable than lowering prices.

See also

• Product differentiation

Sources

• Brue, Stanley L., and McConnell, Campbell R. Economics–Principles, Problems and Policies (15th edition). Boston: Irvin/McGraw-Hill, 2002.