NON PRICE COMPETITION

NON PRICE COMPETITION

Subject : Economics

Context : Data privacy can take the form of non-price competition and abuse of dominance can lower privacy protection, a study by the Competition Commission of India (CCI) has said.

Concept :

• The study also made observations about other non-price factors such as quality of service (QoS), data speeds and bundled offerings, which are likely to be the new drivers of competitive rivalry between service providers in telecom sector in addition to just price

Non price competition

• 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”.
• It often occurs in imperfectly competitive markets because it exists between two or more producers that sell goods and services at the same prices but compete to increase their respective market shares through non-price measures such as marketing schemes and greater quality.
• It is a form of competition that requires firms to focus on product differentiation instead of pricing strategies among competitors.
• Such differentiation measures allowing for firms to distinguish themselves, and their products from competitors, may include, offering superb quality of service, extensive distribution, customer focus, or any sustainable competitive advantage other than price.
• It can be contrasted with price competition, which is where a company tries to distinguish its product or service from competing products on the basis of low price.
• Non-price competition typically involves promotional expenditures (such as advertising, selling staff, the locations convenience, sales promotions, coupons, special orders, or free gifts), marketing research, new product development, and brand management costs.