   
|
|
|
|
Loss Leader
|
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...
|
|
Where is the market headed? The answer may surprise you. Find out
right now with the exclusive & Barron's recommended charts of Chart of the Day.
|
Popular Terms: LIBOR, inflation, 401a, real GDP, EBITDA, command economy, 144a, deferred tax, per diem, liquidity ratio, margin rate, deferred revenue, required rate of return, net book value, cancelled check, forward PE, minority interest, average price per share, retained earnings, wholly-owned subsidiary, trailing PE, diluted share, FICO score, debt service coverage, 1031 exchange, arm's length transaction, option premium, COO, commodity, 1035 exchange, Zero Cost Collar, reverse mortgage, dividends payable, current ratio, labor relations, phantom income, balance sheet, net income, assets under management, covered put, class C shares, Key Rate Duration, APR, equities, VIX, quant, FTSE, stock market close, commercial paper
|
|
|
|
