Non price competition
Definition. Non price competition refers to firms competing for market share through means other than lowering price, such as advertising, branding, product differentiation, after sales service, and quality improvements. It is common in oligopoly, where price cutting risks triggering damaging price wars between mutually interdependent rivals.
By relying on non price methods, oligopolists can attract customers and build brand loyalty while keeping prices relatively stable, avoiding the uncertainty of retaliatory price reductions.
This term belongs to Oligopoly in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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