Answer to Question #125924 in Microeconomics for K. M Mulalo

Question

Explain the concept of non‐price competition in the context of the cinema industry
using examples to illustrate your answer.

Answer 1

Non-price competition is a method of competition, which is not based on price superiority over competitors, but on the achievement of a higher quality, technical level, technological perfection.

Non-price competition is based on the offer of goods of higher quality, with greater reliability, longer service life and other more advanced consumer properties. A significant role in non-price competition is played by: design, packaging, subsequent maintenance, advertising.

Hidden price competition should be distinguished from non-price competition, by which firms introduce a new product with significantly improved consumer properties, and raise the price disproportionately.

American cinema (Hollywood and independent cinema) has significant

impact on the content and technology of world cinema, on economic and cultural

aspects of the film process. The main advantages of the USA are the accumulated experience in expertise in the selection of films, developed film production and distribution infrastructure (although the growth of movie theater chains has slowed significantly), as well as a large number of movie stars world-wide.

Since almost all the largest film companies in the world are striving to improve the quality of their production using the above mentioned means, then we are talking about non-price competition.