Which pricing strategy involves pricing items well below their normal price to attract customers?

Which pricing strategy involves pricing items well below their normal price to attract customers?

• A. Price inflation
• B. Theme pricing
• C. Leader pricing
• D. Operating expenses

Answer: (C)

Leader pricing is a strategy that tempts shoppers by putting certain items well below their normal price to draw them into the store. The idea is simple: lure customers with an attractive deal on a popular item, then encourage them to buy other, higher-margin products while they’re there. This approach can boost overall sales even if the deeply discounted item isn’t highly profitable on its own. In contrast, price inflation means raising prices, which doesn’t attract bargain-seeking customers. Theme pricing arranges prices around a concept or category for perception, not necessarily for deep discounts. Operating expenses refer to the costs of running the business, not a marketing-pricing method.

Leader pricing is a strategy that tempts shoppers by putting certain items well below their normal price to draw them into the store. The idea is simple: lure customers with an attractive deal on a popular item, then encourage them to buy other, higher-margin products while they’re there. This approach can boost overall sales even if the deeply discounted item isn’t highly profitable on its own.

In contrast, price inflation means raising prices, which doesn’t attract bargain-seeking customers. Theme pricing arranges prices around a concept or category for perception, not necessarily for deep discounts. Operating expenses refer to the costs of running the business, not a marketing-pricing method.