Investor Glossary-loss leaderInvestor Glossary-loss leaderInvestor Glossary-loss leaderInvestor Glossary-loss leaderInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Loss Leader

The HTML to link to this page
 

In marketing, a loss leader is an item priced not for profit, but to attract customers. If effective, the loss leader stimulates sales of other goods. In a retail context, the purpose of a loss leader is to drive traffic into the store, in the hope that once the customer is there, additional goods besides the loss leader will be bought. Examples of the retail loss leader strategy include fast food chains that offer "dollar menu" items and groceries stores that sell basic staples such as milk for below cost. Free software, or freeware is sometimes distributed as a loss leader with the intention of convincing a user to upgrade to a more advanced, paid version of the software. Conceptually, the loss leader technique can also be applied to services. For instance, an accountant might offer to do the personal tax returns of any business owner for free, with this loss leader designed to build a personal relationship aimed toward winning the corporation as a client. In some jurisdictions, the loss leader technique might be considered illegal dumping.



Rate this loss leader definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: irrevocable trust, minority interest, Zero Cost Collar, 144a, open position, EBITDA, 1035 exchange, annual return, FICO score, phantom income, in escrow, diluted share, deferred revenue, real GDP, deferred tax, current ratio, FTSE, 1031 exchange, dividends payable, margin rate, stock market close, limit order, VIX, retained earnings, per diem, debt service coverage, class C shares, stock split, average price per share, ex-dividend, command economy, ex-dividend date, reverse mortgage, liquidity ratio, option premium, risk management, quality assurance, 401a, required rate of return, cancelled check, implied volatility, covered put, LIBOR, Key Rate Duration, labor relations, wholly-owned subsidiary, APR, balance sheet, inflation


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use