Non-Price Competition

Non- price competition occurs when businesses compete with each other in ways other than price. Examples of this include:

• Providing a better service than a competitor, such as, home delivery, after-sales care and opening for longer hours.
• Selling a wider range of products than a competitor.
• Offering free gifts with purchases, for example, petrol stations sometimes offer free gifts when you spend a certain amount on petrol.
• Rewarding customers for their loyalty - reward cards are a common way of doing this.

What many customers do not realise is that they will be paying a higher price for these extra services. Businesses hope that customers will not mind paying a higher price in return for a service that is better than their competitors.