The Role of Price

What is price? Price is the value exchanged for products in a marketing transaction. Trading of products, or what is called barter, is the oldest form of exchange. Goods and services were exchanged among one another for other goods and or services. Barter still happens to this day and there are many people who service others for something in return, could be fresh fruit and vegetables rather then money. I actually worked on a vegetable farm one summer and the owner got certain tools and or equipment and in return the other person got fresh vegetable whenever they wanted.
Price competition is when a marketer emphasizes price as an issue and matches or beats the prices of competitors. This happens with most business because they are all trying to make sales and beat out the other companies. I work for Target and one of our major competitors is Wal-mart. They sell pretty much the same things as Target does but for a cheaper price. They send people into our store to check out our prices and in return we do the same. If all firms producing the same product charge the same price, the firm with the lowest costs is the most profitable. If all companies charged the same amount and had the same sales then it wouldn't matter what store you shopped at. A seller competing on price may change prices frequently or at least must be willing to do so and both Target and Wal-mart and other companies are willing to do so if they want to survive.
Nonprice competition occurs when a seller decides not to focus on price and instead emphasizes distinctive product features, service, product quality, promotion, packaging, or other factors to distinguish its product from competing brands. Thus this allows a company to increase brand's unit sales besides changing the price of the brand. Nonprice competition is effective under certain conditions. A company must be able to distinguish its brand through different product features, higher product quality, promotion, packaging or even great customer service. At Target we try to help every customer we can and focus a lot on customer service. The last place I want to shop is at a store where no one offers to help you. It's important for companies to focus on both nonprice competition and price competition.

Do you think most companies keep an eye on price competition and nonprice competition? We know Target and Wal-Mart watch eachothers product prices and compete for customers but what about other businesses? Especially with our current economic condition, do you think more companies are becoming or are price conscious?