To compete effectively, need to be the lowest cost producer. Must be willing and able to change the price frequently. Need to respond quickly and aggressively. Competitors can also respond quickly to your initiatives. Customers adopt brand switching to use the lowest priced brand.
Sellers move along the demand curve by raising and lowering prices.
Non-Price Competition Emphasize product features, service, quality etc. Can build customer loyalty towards the brand. Must be able to distinguish brand through unique product features. Customer must be able to perceive the differences in brands and view them as desirable. Must promote the distinguishing features to create customer awareness.