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Loss leader. A loss leader (also leader) [1] is a pricing strategy where a product is sold at a price below its market cost [2] to stimulate other sales of more profitable goods or services. With this sales promotion / marketing strategy, a "leader" is any popular article, i.e., sold at a low price to attract customers. [3]
A loss leader or leader is a product sold at a low price (i.e. at cost or below cost) to stimulate other profitable sales. This would help the companies to expand its market share as a whole.
A loss leader is a product that has a price set below the operating margin. Loss leading is widely used in supermarkets and budget-priced retail outlets where the store as a means of generating store traffic.
How Prime Video Went From Loss Leader to Key Subscription Driver in Spain: A Conversation With Executives Ricardo Cabornero and Maria José Rodríguez (EXCLUSIVE) Jamie Lang July 10, 2024 at 7:23 AM
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Predatory pricing is a commercial pricing strategy which involves the use of large scale undercutting to eliminate competition. This is where an industry dominant firm with sizable market power will deliberately reduce the prices of a product or service to loss-making levels to attract all consumers and create a monopoly. [ 1]
Similar to Bait pricing, retailers use leader pricing to entice customers to come into the stores by advertising items, the loss leaders, at a low price. When they arrive at the stores aiming for the promoted products, they often end up buying additional products at their full prices.