non price competition

Question 1

An oligopolistic market tends to have a ​lot of non-price competition due to

Answer 1

prices are relatively stable

Question 2

types

Answer 2

• advertising
• loyalty cards
• branding
• quality
• customer service
• product development

Question 3

Advertising

Answer 3

• This creates an awareness of the company/product and can persuade a customer to purchase the product.
• If advertising is successful, it can increase sales and market share for a business which in the long run can increase profits.
• Advertising can also make the demand for a product/service more inelastic.

Question 4

Loyalty cards

Answer 4

​- These encourage repeat purchases by rewarding customers for their loyalty.
- They also provide firms with lots of data on consumers’ buying habits, which the firm can use to increase sales.

Question 5

Branding:

Answer 5

• A successful brand can help increase loyalty and repeat purchases for a business.
• People will trust the brand and the quality it represents so will more likely keep buying from them.
• An established brand should find it easier to release new products

Question 6

quality:

Answer 6

• A firm that is known for good quality may be able to charge higher prices, and is likely to have strong brand loyalty.
• They are likely to have good reputation and benefit from positive recommendations

Question 7

Customer service:

Answer 7

This will encourage loyalty amongst customers and give the business a more positive reputation.

Question 8

problem with non price competition:

Answer 8

• expensive, so firms need the money before they are able to undertake the competition.
• no guarantee of success

Question 9

likely to be

Answer 9

dynamically efficient