Jerry saw an ad in the newspaper that showed a new four-door sedan on sale for $12,999, When Jerry arrived at the dealership, he was told the last sales model was just sold but that identical models were available for $14,999. What is this sales strategy better known as?
A. Commission-based selling
B. Bait and switch
C. Push money
D. Hook and loop
The correct answer and explanation is:
The correct answer is B. Bait and switch.
This sales strategy involves attracting customers by advertising a product at a low price (the “bait”) but then pressuring them to purchase a more expensive product once they arrive (the “switch”). In Jerry’s case, the ad showed a four-door sedan for $12,999, enticing him to visit the dealership. However, once he arrived, he was told that the last unit at the advertised price had already been sold and was offered identical models for $14,999 instead. This creates a situation where customers are lured in with an attractive deal but are ultimately steered toward higher-priced alternatives.
The bait and switch strategy is often criticized as unethical because it manipulates customers and takes advantage of their time and interest. It exploits the psychological principle of scarcity, where people are more likely to act when they believe that the opportunity is limited. The dealership’s goal is to create a sense of urgency and frustration, hoping that customers will settle for a higher-priced product rather than leave empty-handed.
This strategy can be illegal in some places if it is proven to be misleading or deceptive, as it goes against consumer protection laws. Businesses that use bait and switch tactics often face fines, lawsuits, and damage to their reputation. Consumers are encouraged to be cautious when faced with such sales tactics and to verify the availability and pricing of products before making decisions.