What does a loss leader strategy entail?

A loss leader strategy entails pricing products low to attract customers. The primary goal of this strategy is to draw shoppers into a store or onto a website by offering specific items at a significantly reduced price, even if that means selling the items at a loss. Once customers are attracted by the lower-priced products, they are likely to purchase additional items that may have higher profit margins. This approach helps increase overall sales volume and can lead to greater customer loyalty as shoppers return for the bargains they initially sought.

The other options, while they may involve strategies related to increasing customer engagement or sales, do not specifically define a loss leader strategy. Rewards programs focus on customer retention and incentivizing loyalty, free samples aim to increase product awareness and trial, and product bundling encourages higher sales through perceived savings, but they don’t involve the strategy of deliberately pricing below cost to draw in consumers.