Loss Leaders


Mercedes loses money on every $15,000 Smart Car they build, and the new $375,000 LFA super car will be a money pit for Lexus.

Both examples break away from each company’s traditional mold, which causes:
– increased media coverage
– a viral factor and industry controversy
– entirely new segments of the population that hadn’t considered the brand (in this case, opposite ends of the income spectrum)

All of this leads to a BROADER REACH for each brand. More people coming in the door to check out the Smart Car drive away in a Mercedes C-Class, and people that considered Lexus too bland become impressed by its crazy exotic and buy an LS sedan.

This works in any company.  Use fringe products as marketing tools to broaden your reach and sell more bread & butter.

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