Why use loss leaders? Higher Business Management Visit:  www.mrmcgowan.blogspot.com
Loss Leader <ul><li>A loss leader or leader is a product sold at a low price (at cost or below cost) to stimulate other, p...
<ul><li>Brings customers into the shop to buy the products. </li></ul>
<ul><li>Customers then buy other products which are normally priced. </li></ul>
<ul><li>Profits are made on  the whole amount a  customer purchases </li></ul>
<ul><li>Creates customer loyalty as customers don’t go to competitors shops. </li></ul>
<ul><li>Can be used in a marketing campaign. </li></ul>
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Why Use Loss Leaders - Higher Business Management - Marketing

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Why do companies sell certain products at a loss?

This is a marketing strategy and one that you need to know for Higher Business Management!

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Why Use Loss Leaders - Higher Business Management - Marketing

  1. 1. Why use loss leaders? Higher Business Management Visit: www.mrmcgowan.blogspot.com
  2. 2. Loss Leader <ul><li>A loss leader or leader is a product sold at a low price (at cost or below cost) to stimulate other, profitable sales. </li></ul><ul><li>OR </li></ul><ul><li>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.  </li></ul>
  3. 3. <ul><li>Brings customers into the shop to buy the products. </li></ul>
  4. 4. <ul><li>Customers then buy other products which are normally priced. </li></ul>
  5. 5. <ul><li>Profits are made on the whole amount a customer purchases </li></ul>
  6. 6. <ul><li>Creates customer loyalty as customers don’t go to competitors shops. </li></ul>
  7. 7. <ul><li>Can be used in a marketing campaign. </li></ul>

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