Answer to Question #129430 in Microeconomics for mathakha

Question

Explain the concept of non‐price competition in the context of the cinema industry

Answer 1

Non-pricing is a competition strategy used by firms, with the focus being on adopting measures that attract customers without the need of altering the price of products or services. Examples of non-pricing measures are; improving product quality, and good workmanship. Below is an example of how the concept of non-pricing in the context of the cinema industry.

Cinema A and B are competitors in the cinema industry both enjoying a considerable number of customer reach. However, in quest of having a competitive edge, Cinema A has started rewarding its clients with popcorns on every ticket purchased. Despite the cinemas charging the same, Cinema A is likely to have a competitive edge to Cinema B.