When Wal-Mart entered the German grocery market, it had to compete against several well-established stores. To attract German consumers, the store sold staples such as flour, milk, butter, and cooking oil below costs. In other words, the retailer used:
A) a single-price strategy
B) cost-plus pricing
C) price lining
D) leader pricing
E) penetration pricing

Question

Quizplus · Accepted Answer

Leader pricing is a strategy where a retailer sells selected items at below cost to draw customers in, hoping they will buy other items at regular prices. Wal-Mart used this approach by selling staples like flour, milk, butter, and cooking oil at prices below their cost.

When Wal-Mart Entered the German Grocery Market, It Had to Compete