Bait pricing is a tactic employed by marketers to lure a customer to the place where the product is being sold. Usually bait prices are those that are unrealistically low when compared to similar offerings in the market.
There are few scenarios when companies resort to bait pricing. One of them is when the product is being introduced for the first time and the priority is to get the customer to try out the product once. It is done in cases where the customer will need to dispose the product after using it a few times e.g. disposable razors. Bait pricing is also done when the market is extremely difficult because of the presence of many competitors. This helps the company clear its stock and also hurt the margins of the competition. But there are regulations in place to prevent a company from bringing down the price to artificially low levels. Sometime companies will offer a low price with conditions attached. In order to know those conditions and avail of the special price the customer will have to visit the store.
There are few scenarios when companies resort to bait pricing. One of them is when the product is being introduced for the first time and the priority is to get the customer to try out the product once. It is done in cases where the customer will need to dispose the product after using it a few times e.g. disposable razors. Bait pricing is also done when the market is extremely difficult because of the presence of many competitors. This helps the company clear its stock and also hurt the margins of the competition. But there are regulations in place to prevent a company from bringing down the price to artificially low levels. Sometime companies will offer a low price with conditions attached. In order to know those conditions and avail of the special price the customer will have to visit the store.
