Loss Leader Strategy

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Loss Leader Strategy

A business strategy whereby a company sells a product at a loss in order to sell the customer associated products for a profit. This is common when a company is new and wishes to build brand loyalty and other goodwill. For example, a grocery store may sell its bread for a loss and advertise its low price for bread in order to attract customers, who will likely then buy that same store's milk, eggs, and cheese. A loss leader strategy can be very profitable if executed properly. See also: Pricing strategy.
References in periodicals archive ?
One expert said: "Supermarkets used to use bread, milk and beans as loss leaders to tempt shoppers in.
OPERATION Transformation yesterday called on the next generation of weight loss leaders to step up to the plate.
Superstores have loss leaders, why can't either bus company run a bus that actually passes the cemetery, especially at the weekend?
With supermarkets using Easter eggs as loss leaders to get customers through the door, it's now cheaper than ever to stock up on sweet treats not just for the kids, but for the whole family.
There's a real uptick after sales were in the doldrums for months, but the loss leaders may not last.
Proprietary school loans viewed as loss leaders to keep federal aid flowing, attractive to investors, harm students
They are quite prepared to come in as loss leaders in order to get a foot hold in the city.
Due to the volumes it's hardly comparable to, for example, Safeway's loss leaders.
A plethora of special offers, loss leaders and promotions disguises the truth of constrained competition.
Handy has been selling its choice cuts for around $10 per pound, using them as loss leaders to build customer traffic.
RSD can boast nearly 40 years of providing a continuous, consistent and quality employment agency service, no loss leaders, no 'Trojan Horse' tactics but a genuine service unequalled by any agency.
When it comes to domestic arrangements, blacks are America's perennial loss leaders.