Question

10. List at least four of the ways a firm can differentiate a product (also called nonprice competition). Then give an example for each.

Answer 1

Introduction- Nonprice competition (marketing strategy) refers to the competition between the firms to differentiate their service and the products. It attracts custom and increases sales by different methods other than price. It tries to increases market share by decreasing their prices. It includes expenditure such as special orders, free gifts, staff, and sales promotion.

Four ways of nonprice competition are:-

Distinctive selling points- In last years, the concentration of companies is mainly on differentiated products which mainly depend on customer demands. Let's take an example, food companies are providing a variety of products.3D printing is now more prefered for its specific size, colour and length. Mass production becomes outdated.

Loyalty Card- Many big companies are now interested in loyalty cards i.e cashback to customers. For example, Airmiles is used by Airlines. Supermarket use Tesco points.

Brand loyalty- Companies spend plenty of money on advertising which attracts the customer to trust in their brands. The high brand creates barriers to enter into it. For example, many company tried to start a business with cola but failed because of the high brand loyalty of Pepsi and Coca-Cola.

Offering various types of products- This encourages people to try new products and it makes a huge profit. For example, I buy a phone with a type C port. Therefore to transfer files from pendrive to mobile I have to buy a type C otg. Thus it forces people to buy new products.