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Difference between Price and Non-price Competition


i. Price Competition:

Exists when marketers complete on the basis of price. In price competition, the marketers develop different price strategies to beat the competition.

They generally set a same or low price of a product than that of the competitors to gain the market share.

Generally, the prices are changed to cover the costs or increase the demand. For instance, Coca-Cola and Pepsi are close competitors, thus, they often engage in price wars. The major disadvantage of price competition is that the competitors have flexibility to change the prices of products.

ii. Non-price Competition:


Focuses on the factors other than the price of the product. In non-price competition, customers cannot be easily lured by lower prices as their preferences are focused on various factors, such as features, quality, service, and promotion.

Thus, the marketers focus on these factors to increase the sale of products. For instance, customers prefer buying expensive luxury products for gaining status in the society. The demand for these products does not shift even if their prices increase.

Thus, in case of non-price competition, the marketers try to promote the product by exhibiting its distinguishing features. However, a marketer who is competing on non-price basis cannot ignore the prices set by the competitors as price remains a significant marketing element.

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