Economic crisis due to Covid Pandemic has made most of the firms to focus on price to compete with rival firms, non-price competitive methods have become insignificant”. Discuss.
There are a number of reasons why firms have focused on price during the pandemic. First, consumers are more price-sensitive during economic downturns, as they are looking to save money wherever possible. Second, the pandemic has led to increased supply chain disruptions, which has made it more difficult for firms to differentiate their products on the basis of quality or features. Third, the pandemic has led to a decline in marketing and advertising budgets, which has made it more difficult for firms to compete on non-price factors.
As a result of these factors, non-price competitive methods have become less effective during the pandemic. For example, firms that have traditionally competed on the basis of customer service have found it more difficult to provide the same level of service during the pandemic, as their employees are working from home or with reduced hours. Similarly, firms that have traditionally competed on the basis of innovation have found it more difficult to develop new products and services, as their research and development teams have been disrupted by the pandemic.
While the focus on price is understandable during an economic crisis, it is important for firms to remember that non-price competitive methods can still be effective. For example, firms can still compete on the basis of quality, features, or customer service. Additionally, firms can use marketing and advertising to create a positive brand image, even if they have a limited budget.
In the long term, it is likely that the focus on price will decline as the economy recovers. However, the pandemic has highlighted the importance of non-price competitive methods, and firms that can effectively compete on these factors will be well-positioned for success in the future.
Here are some examples of non-price competitive methods that firms can use:
Quality: Sell high-quality products/services that meet or exceed customer expectations.
Features: Offer products or services with unique features that set them apart from the competition.
Customer service: Provide excellent customer service that goes above and beyond what is expected.
Brand image: Create a positive brand image that customers will be drawn to.
Innovation: Develop new products or services that meet the needs of customers.
By focusing on these non-price competitive methods, firms can still compete effectively in a price-sensitive environment.
