When a consumer selects a product which satisfies his or her need, the decision has undergone many comparison procedures in the mind. All the factors influencing a product like the reputation of the brand, quality of service, promotion and advertising, the pricing and many more. Nevertheless, high competition in the market gives the consumer high choices which can affect both in positive and negative manner. The markets where domestic products are promoted have only limited competition which gives the consumer less choices.
Studies show that the products which have stronger advertising and promotion activities tend to have increased ability to be selected by the prospective consumers. The behavior of the consumer in the market is highly dependent on the advertising activities they go through in their normal life. The products from the small enterprises are adversely affected the comparative competition existing in present markets. They go for less promotional activities than the companies. Thus, the consumer will be either less or not familiar with those products. Perhaps, the quality of the product will be higher than that of the leading products by large enterprises.
However, competition in the market benefits the consumers in different ways. Some of them are noted below:
- Better pricing
The consumer gets more choices in highly competitive market. These force the companies to go for competitive pricing.
- Innovation and New products
Since there will be similar products from different producers, it is strategically to make improvements in the existing product or bring a new product with advanced features that could outweigh the competitions. The changes can be brought in packing styles, pricing, offers etc.
How the consumers respond to the competition varies from products to products and market to market. However, the market researchers can help to find out the possible effects.