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Non - price competition


One purpose of marketing is to reduce the impact of price on purchasing decisions by differentiating the firms' products from that of the competition. This will only be possible if customers genuinely believe that there is a difference worth paying a premium price for.

These other factors are called non-price factors and are usually referred to as non-price competition.

If a firm can get customers to base their purchase decision on non-price factors then there is an opportunity to increase prices without losing many customers, because demand is price inelastic.

The firm may establish competitive advantage by focusing on a Unique Selling Proposition such as superior quality, image, function or any other factor which differentiates their product from their closest rivals.