Which of the following is a form of nonprice competition?

• A. Offering discounts on products
• B. Advertising and product differentiation
• C. Price matching with competitors
• D. Lowering the market price

Answer: (B)

Verified step by step guidance

1. Understand the concept of nonprice competition: it refers to strategies that firms use to attract customers without changing the price of the product.
2. Identify examples of nonprice competition, such as advertising, product differentiation, improving product quality, customer service, and brand loyalty efforts.
3. Recognize that offering discounts, price matching, and lowering the market price are all forms of price competition because they involve changing the price to attract customers.
4. Note that advertising and product differentiation do not involve changing the price but instead focus on making the product more attractive or unique to consumers.
5. Conclude that among the options given, 'Advertising and product differentiation' is the correct example of nonprice competition.