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


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | 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