Loss Leader

A marketing strategy that involves offering one product really inexpensively (to the point of losing money) with the hopes that customers will make up the loss in buying other products. McDonald's 29cent hamburgers are an example. See FreeLunch.

If you sell a software product at a reduced cost in order to build an installed base, would this strategy be equivalent to a hardware LossLeader strategy?

In the absence of contradictory evidence I would answer, "No." The LossLeader is targeted at the person obtaining the bargain, i.e. they are there to buy the discounted hamburger and they buy a drink for themselves and another meal for the person they came with. The reason that one wants a sizeable installed base is that marketshare has value, specifically to "other" purchasers. -- tl

I don't mind loss leaders - I just wish that management would tell you when the project is a loss leader.