Definition : Hi-Lo pricing policy

Hi-Lo pricing policy is a marketing strategy used by businesses to attract customers by offering both high-priced and low-priced products or services. This approach involves setting the initial prices of certain items at a higher level, while simultaneously offering discounts or promotions on other items to entice customers to make a purchase. The goal of a Hi-Lo pricing policy is to create a perception of value and savings for customers, while also maximizing profits for the business. This strategy is commonly used in retail and hospitality industries, where customers are drawn in by the promise of a good deal and are more likely to make additional purchases. However, it can also be seen in other industries such as airlines, where the base fare may be low, but additional fees and charges are added on for extra services. Hi-Lo pricing policy requires careful planning and execution to strike a balance between attracting customers and maintaining profitability.

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