Which pricing strategy places certain items at prices well below their normal price to attract customers to buy other items?

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

Answer: (D)

Leader pricing uses very low prices on select items to draw customers into the store, with the idea that once they're there, they’ll buy other products that have higher profit margins. In a garden center, for example, deeply discounted seeds or soil can attract shoppers who then purchase plants, fertilizers, and larger tools, boosting overall sales. These low-priced items are often loss leaders, meant to increase traffic and cross-sell other merchandise. This differs from price inflation (raising prices overall), theme pricing (prices set to fit a theme or category rather than to attract traffic), or simply accounting for operating expenses (the costs of running the business, not a pricing tactic).