What are major pricing and non-pricing strategies for an oligopoly?

Pricing Strategies in Oligopoly:

1. Predatory Pricing : Some of the oligopolists may adopt predatory pricing in order to force the rivals out of the market. Predatory Pricing strategy involves keeping the prices of the good artificially low, and sometimes even below the cost of production.

2. Entry Forestall Pricing: In order to prevent new entrants in the market, sometimes oligopolists tend to impose limit pricing strategies.

3. Collusion: The few sellers in the market may come together and form collusion in the market and decide in favour of raising the price of the product. This may however make the new entrant enter the market and offer more lucrative prices to the customer.

4. Cost Plus Pricing : It is a straightforward pricing method in which the firms set the price of the product by adding a certain fixed mark up to the average production costs.

Non Pricing Strategies:

1. Improving the product quality and after sale customer services.

2. Aggressive spending on advertisements to attract more customer base. Using other advertising methods like hidden advertisements and sponsorships.

3. Using sales promotion tactics such as offering heavy discount on products, using buy one get one free approach, or offering additional services on purchase of a good.

4. Loyalty schemes which offers additional product discount to regular customers, or giving them bonus points on each purchase, or providing them with scratch cards or lucky coupons which provide additional purchase opportunities to customers.