What Is Leader Pricing?

Leader pricing can be defined as selling the selected products in a product family at less than their profit margins in order to introduce a new brand. Leader pricing can also be introduced to stimulate the interest of consumers in a product. As a result of the leader pricing the company may not yield the maximum profit on particular goods. The companies intentionally practice leader pricing and the leader pricing in which the prices gets lower than the cost incurred by the company is known as loss leader pricing. It is an aggressive pricing strategy which is usually adopted to increase the traffic on the stores.