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- DictionaryLoss-lead·er/ˈlôs ˌlēdər/
noun
- 1. a product sold at a loss to attract customers.
Pricing strategy
- Definition of Loss Leader A loss leader is a pricing strategy where a product is sold at a price below its market cost to stimulate other profitable sales.
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Apr 29, 2024 · Definition of Loss Leader. A loss leader is a pricing strategy where a product is sold at a price below its market cost to stimulate other profitable sales. It’s a deliberate attempt by retailers to attract customers with the hope that they will purchase other items at normal or even high markups, which compensates for the loss incurred on ...
Jan 26, 2024 · What is a loss leader? “Loss leader” refers to products sold (or manufactured)* at a loss in the short-term to turn greater profits in the long-term. Loss leader products achieve this by (i) attracting new customers who would otherwise shop elsewhere, and (ii) tempting them into buying other products priced at a relative premium.
Learning Objectives. Define loss leader. A loss leader (also leader) is a pricing strategy where a product is sold at a price at or below its market cost to stimulate other sales of more profitable goods or services. “Loss lead” describes the concept that an item is offered for sale at a reduced price and is intended to “lead” to the ...
- What Is Loss Leader Pricing?
- Loss Leader Pricing Examples
- What Are Cherry Pickers?
- How to Use Loss Leader Pricing in Your Business
Loss leader pricing and strategy is a marketing approach where a product is intentionally sold at a loss or minimal profit to attract customers. The marketing strategyis to entice shoppers with the discounted item, hoping they will make additional purchases of higher-margin products.
A loss leader strategy can be used to attract customers and gain market share using numerous methods across a range of industries. Here are some common loss leader examples.
Retailers using loss leader pricing may run into trouble with a set of customers known as "cherry pickers." Cherry pickers are customers who only buy the loss leaders, securing the best deals and leave without buying anything else. These customers are an issue for retailers because they don't buy other full-price items while in the store. So the st...
While loss leader pricing is most often used in retail settings, it can also be effective for an online store or ecommerce business. Here are some ideas for using a loss leader pricing strategy in your business. 1. Excess inventory: If you've overestimated demand for a product, consider reducing it to market cost or below and using it as a loss lea...
May 10, 2022 · A loss leader (also leader) is a pricing strategy where a product is sold at a price at or below its market cost to stimulate other sales of more profitable goods or services. “Loss lead” describes the concept that an item is offered for sale at a reduced price and is intended to “lead” to the subsequent sale of other services or items ...
Aug 7, 2023 · A loss leader or loss leader pricing is a pricing strategy where a business sells an offering at a loss to lure more customers and sell them additional profitable offerings. Take the example of a grocery store to understand this strategy better.
Apr 29, 2022 · Loss leader pricing is a strategy predicated on selling a product at a loss in hopes of attracting customers who can be upsold and cross-sold products with healthier margins. Ultimately, loss leader pricing can be an effective way to: Introduce a new product. Foster brand loyalty. Move stale inventory. Imagine …
