Jerry saw an ad in the newspaper for a sale on a new four-door sedan for a price of $12,999. When he arrived at the dealership, he was told that they just sold the last one of the sale models but that they have identical models for $14,999. What is this sales strategy better known as?
A Bait and switch
B. Push money
C. Commission-based selling
D. Hook and loop
The correct answer and explanation is:
The correct answer is A. Bait and switch.
In this scenario, Jerry was initially attracted by the advertised price of \$12,999 for a new four-door sedan, but upon arriving at the dealership, he was informed that the sale model had already been sold, and the only available cars were priced at \$14,999. This is a classic example of the bait and switch sales tactic.
Bait and switch is a deceptive marketing strategy where a seller advertises a product at an attractive price (the “bait”) to draw customers in. However, when the customers arrive, the advertised product is no longer available or is presented as a limited-time offer. The seller then attempts to “switch” the customer to a higher-priced or different product.
The tactic is misleading because it takes advantage of consumer interest in a low-priced deal, only to disappoint them when the offer is no longer available. The salesperson may try to convince the customer to buy a more expensive item or may offer them alternatives with higher prices.
This practice is generally considered unethical and is illegal in many jurisdictions. Regulatory bodies, such as the Federal Trade Commission (FTC) in the U.S., monitor and take action against bait-and-switch tactics, ensuring that businesses advertise their products truthfully and fairly. Consumers who fall victim to such tactics are often left feeling frustrated and deceived, which can damage a company’s reputation in the long run.
Other sales strategies, such as push money (B), involve incentivizing salespeople with bonuses for selling certain products, but these do not involve deceptive advertising. Commission-based selling (C) is simply a compensation model for salespeople, and hook and loop (D) is unrelated to sales strategies.