Leader pricing
Leader pricing is a pricing strategy where a company offers a product or service at a lower price compared to its competitors in order to attract customers and increase sales. This strategy is often used by retailers to drive traffic to their stores and increase brand loyalty.
One example of leader pricing is when a supermarket offers a popular item such as milk or bread at a discounted price to encourage customers to come into the store. Once in the store, customers are likely to purchase other items at regular prices, increasing the overall sales for the retailer.
While leader pricing can be effective in attracting customers, it is important for companies to carefully consider the long-term implications of this strategy. Offering products at a discounted price can erode profit margins and potentially devalue the brand in the eyes of consumers.
Overall, leader pricing can be a useful tool for companies looking to increase sales and attract new customers, but it should be used judiciously and in conjunction with other pricing strategies.
Examples of leader pricing:
- Black Friday sales: Many retailers offer deep discounts on popular items during the Black Friday shopping holiday to attract customers to their stores.
- Loss leaders: Some companies offer products at a loss in order to drive traffic to their stores and increase sales of other items.
For more information on leader pricing, you can visit the Wikipedia page.