A dealer persuades a customer to buy a new car by reducing the price to well below that of his competitors. Once the customer has agreed to buy the car, the dealer lowers the value of the trade-in and requires the purchase of expensive extra equipment. Now the car costs well above the current market rate. This is an example of the ________ procedure.

Question

Quizplus · Accepted Answer

The lowball technique involves initially offering a product at a lower price than competitors to attract the customer, and then increasing the price by adding costs once the customer has agreed to the purchase. This is exactly what the dealer does by first lowering the car's price to attract the customer and then increasing the overall cost through the lower trade-in value and the requirement of purchasing expensive extra equipment.

A Dealer Persuades a Customer to Buy a New Car