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Loss Leader A loss leader or leader is a product sold at a low price (at cost or below cost) to stimulate other, profitable sales. OR A business strategy in which a business offers a product or service at a price that is not profitable for the sake of offering another product/service at a greater profit or to attract new customers. This is a common practice when a business first enters a market; a loss leader introduces new customers to a service or product in the hope of building a customer base and securing future recurring revenue.

A loss leader or leader is a product sold at a low price (at cost or below cost) to stimulate other, profitable sales.

OR

A business strategy in which a business offers a product or service at a price that is not profitable for the sake of offering another product/service at a greater profit or to attract new customers. This is a common practice when a business first enters a market; a loss leader introduces new customers to a service or product in the hope of building a customer base and securing future recurring revenue.

Brings customers into the shop to buy the products.

Brings customers into the shop to buy the products.

Customers then buy other products which are normally priced.

Customers then buy other products which are normally priced.

Profits are made on the whole amount a customer purchases

Profits are made on the whole amount a customer purchases

Creates customer loyalty as customers don’t go to competitors shops.

Creates customer loyalty as customers don’t go to competitors shops.

Can be used in a marketing campaign.

Can be used in a marketing campaign.