A non-tariff strategy is a marketing tactic where a company does not adjust its price to influence consumers but uses other methods like advertising to attract customers. This strategy is effective in oligopolistic markets and justifies higher costs by offering better quality or service. Advertising is the top producer of sales with this strategy, and it works best when there are few competitors. Consumers value quality over cost, making this strategy effective if the product or service truly offers quality.
A non-tariff strategy is a marketing strategy in which a business does not adjust its price to influence consumers but uses other methods to earn more sales. This usually comes down to advertising and most companies that use this tactic will boldly say their product or service costs more because they offer better service or quality. The non-tariff strategy occurs in many markets but tends to be more common in an oligopolistic market, or one with few competitors. This strategy tends to justify higher costs and has proven to be very effective if the product or service is good enough to meet consumers’ needs.
Most businesses compete with a pricing strategy, which involves adjusting and changing the price to get more sales. This is commonly done through discounts, coupons, and similar measures, and advertising will typically claim that the product is one of the cheapest on the market. With a no-price strategy, the price remains intact, forcing companies to use other methods to attract consumers.
With pricing unused, advertising is generally considered to be the top producer of sales with a no pricing strategy. Advertising is usually quite smart in this arena, because the company generally cannot win on the pricing battlefield and, therefore, needs strong advertising to get sales. Instead of focusing so much on price via advertising — though it may be brought up from time to time — the company will focus more on how its product is superior and why spending more on it will be a better investment.
There is nothing to stop you from using a non-tariff strategy in any market. At the same time, it is most commonly used when there are few competitors. When there are many competitors, it may be more difficult to win on quality alone, especially if there are similar products that sell for much less. If the business is able to distinguish itself from its many competitors with superior quality and advertising, this makes the strategy even more viable in a large market.
The non-tariff strategy can be quite effective in gaining sales, because many consumers value quality over cost, especially if the product or service truly offers quality. A company normally doesn’t have to worry about its products costing more if its advertising and product are effective enough. If the product is inferior, this strategy may be ineffective, as consumers generally expect a better product or service when they pay more money.
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