what is it, its types and methods

It is optimal to use non-price competition in cases where:

1. It is impossible to reduce the cost of products. This situation may arise due to a cartel agreement or restrictions from government supervisory authorities.
2. Consumer demand exceeds the possible volume of goods or services offered. This enables the firm to use non-price competition to earn good profits.
3. Production, promotion and sale of goods or services require large investments. In this case, the price reduction will become unprofitable for the company.
4. High margins, which allows you to make good profits without reducing prices. This makes it possible to invest part of the funds in business development.

Selling differentiated products from different brands that differ in packaging, design, quality and durability is an ideal opportunity for non-price competition.

If business activity is based on the production and sale of luxury goods, clothing, and premium accessories, then competition through price regulation is practically impossible.

However, such a business can be quite successful. A financially secure consumer focuses on the brand, exclusivity of the product, quality of material and workmanship.

This technique depending on the type of strategy and how it is applied, it can have both pros and cons.

The advantages are characterized by the following factors:

1. The ability to attract and retain consumers through the sale of differentiated products without resorting to lower prices.
2. Market tools available to entrepreneurs to compete.
3. The opportunity to use this strategy to win customer loyalty, increase profits and expand business boundaries.

In addition to positive factors, the characteristics of non-price competition also contain some disadvantages:

1. Refusal to reduce prices leads to the loss of a group of buyers for whom the cost of a product or service is primarily important.
2. To correctly implement market methods, you may need the services of experienced professionals.
3. A flexible pricing strategy usually causes strong opposition from competitors. There is a need to use additional resources and financial investments.

There are several types of non-price market instruments. At the same time, the methods of such a strategy for higher business productivity are most often used not individually, but in an integrated manner.

This marketplace tool helps improve your customer experience. To meet their needs, it is necessary to competently organize dispatch service/technical support and free delivery of goods.

Read on topic:

How to stop unhealthy competition between managers

Grocery

This strategy is to expand the range to attract and retain consumers. For this purpose, the production of differentiated products or the purchase of goods is increased.

Such a tool of non-price competition involves expanding the range of additional services that do not relate to the company’s main field of activity. For example, you can install in a sales area:

• newspaper vending machines,
• magazines,
• sweets,
• baking,
• carbonated/hot drinks,
• copying equipment, bank terminals.

Non-price competition of this type is characterized by the rapid implementation of advanced technologies. The strategy provides the opportunity to get advice or order food delivery online. Special mobile applications are used for this.

An effective market tool in retail trade helps to increase the number of sales, while you need to establish contact with customers and try to find your own approach to each.

The main objective of this strategy is the production and sale of original goods that differ in size, shape, packaging, and positive characteristics.

In this case, effective marketing techniques come to the aid of non-price competition. A properly organized advertising campaign allows the consumer to choose the best product for him.

The non-price strategy is built in 2 directions, which in practice are used separately or in combination. The first vector is competition in the field of commodity markets, and the second is the struggle for a niche in the sphere of sales of services and sales of products.

Thanks to the policy of non-price competition, every entrepreneur tries to produce a product that will have improved or unique characteristics.

For a business to be successful, much attention is paid to organizing logistics and the sales system. Key areas of non-price competition are important strategic milestones that should be targeted.

There are 2 key branches of the non-price market mechanism. In practice, both are most often used not separately, but simultaneously, mutually complementing each other.

Existing methods of applying non-price competition include the following provisions:

• improving the quality characteristics of products by expanding the range and its differentiation;
• competent sale of goods and services with accompanying activities. For this purpose, loyalty programs are being introduced, promotions, lotteries, games, and free trial copies of products are being organized;
• proper organization of marketing, advertising events, communications with the public. To do this, presentations of goods and services are held and productive cooperation is established with other companies for new developments or redesign of an existing product and expansion of the target audience.

The most common methods of implementing a market strategy are carried out using different tools. These include:

1. Loyalty programs – used to attract and retain consumers. To do this, business owners launch the issuance and sale of discount (club) cards, providing customers or clients with the opportunity to receive a discount.
2. Specialized retail outlets — the organization of such pavilions is aimed at attracting a wide range of target audience through unique functionality. Stylish design, a large assortment, and good selection of personnel contribute to the effective operation of the business.
3. Presentations — organizing such events attracts the attention of the target audience and makes it possible to earn the trust of buyers and clients. This technique allows you to generate positive reviews that stimulate other consumers.
4. Service — such company activities certainly increase the loyalty of the target audience. In addition, compliance with warranty conditions allows a business to successfully compete with other market participants.

An effective market strategy is stimulated in several ways:

1. Price regulation is a tool for influencing the formation of non-price competition. This strategy allows business owners to monitor the situation and create their own policies for promoting goods and services, taking into account key market factors.
2. Treaties, acts, cartel agreements — the conclusion of any transaction involves the purchase or sale of a product within the established price. Pre-negotiated and documented terms of the contract make it possible to regulate the volume of purchases/sales of products and set the price level. Given the impossibility of influencing market factors by other methods, this method stimulates the introduction of non-price competition.
3. Cooperation with other companies — interaction with competing companies not only stimulates the competitive spirit, but also contributes to the creation of mutually beneficial conditions for both parties.

This is an integral part of market relations that create favorable conditions for the use of available resources. Legislation governing antitrust law does not create barriers to the use of such a strategy if it does not conflict with established norms.

Read on topic:

A competitor uses illegal methods of pressure: how to protect your business

Otherwise, the implementation of antimonopoly rules is governed by the following actions:

• the production and sale of interchangeable products is encouraged;
• full support is provided to small and medium-sized businesses;
• The creation of joint ventures is encouraged, including with the attraction of investments.

In addition, the organization of activities to expand and improve the quality of the assortment is financed. This technique allows you to change the position of the dominant subject within market relations.

The policy of non-price competition provides ample opportunities for entrepreneurs to successfully develop their business using optimal market instruments. To do this, it is not necessary to resort to reducing the cost of the product. A competent organization of work, ensuring the production and supply to the market of a wide range of differentiated goods/services, will win over a significant part of the target audience.

Cover photo: Freepik