A business strategy in which a business offers a product or service at a price that is not profitable for the sake of offering another product/service at a greater profit or to attract new customers. This is a common practice when a business first enters a market; a loss-leader introduces new customers to a service or product in the hope of building a customer base and securing future recurring revenue.
Example :
One of the heaviest users of loss leader pricing is grocery stores, which routinely advertise low prices on selected items. This practice is also used by the manufacturers of ink jet printers, as well as a variety of stores just before Christmas when they advertise deep discounts for early-morning shoppers.
