loss leader pricing

Definition

Reasons to use this method

• Move overstock
• Brand awarness
• Increased traffic

Avantages

• Brings in new customers
• Brings back former customers
• Impossible to resist
• small loss initialy can lead to a big profit
• Increases brand awarness

Disadvantages

• Must ensure there is enough product
• If you price it too low you may never regain profit
• You cant give away your product for nothing
• Customers may not return

EXAMPLES