Premium Brands- Prestige, Value and Quality
What is the common between brands like Hugo Boss, Louis Vuitton, Gucci, Fendi, Rolex etc. These are premium brands. Premium is defined in the dictionary as an adjective meaning exceptional quality or amount. Premium products are frequently related to prestige and quality. In order for the customer to identify any product as premium, he should be convinced about the exclusivity of the brand. Premium brands do not command premium because of their high quality but because the exclusivity that the product assures the customer. The branding strategy of most of the premium brands is based on aligning their brand proposition to the self image of the consumer.
The consumer behavior for premium and non premium brands depends on the socio economic structure and based on perceived value.
- Perceived Conspicuous Value: The consumption of prestige brands is viewed as a signal of status and wealth, and whose price, expensive by normal standards, enhances the value of such a signal.
- Perceived Unique Value: If virtually everyone owns a particular brand it is by definition not prestigious.
- Perceived Social Value: The role-playing aspects and the social value of prestige brands can be instrumental in the decision to buy.
- Perceived emotional satisfaction that premium brand provides to customer seeking brand prestige. It also provides them with subjective intangible benefits such as aesthetic appeal.
- Perceived Quality Value: Prestige is derived partly from the technical superiority and the extreme care that takes place during the production process. For instance, a Rolex Sea-dweller works 1,220 meters underwater and is hand-crafted.
Most people chasing premium brands are aspire to have an image that will set them apart from rest of the crowd. Mostly these are elite group of people wanting to associate themselves with brands that are beyond the reach of the normal consumers and premium brands cater to this need. How can the product be beyond the limit of average citizens? This can be achieved by making price very high and limiting the production numbers with quality of highest order. In economic terms, premium products are those who can consistently command and justify a higher price than products with comparable functions and similar quality. In marketing terms, these are products which can deliver emotional benefits which are hard to match by comparable products.
Most of the high premium brands goal is to create a high perception of value in turn creating more sales. The biggest question that brands should ask themselves is ‘Why will consumer be willing to pay more for a product when there are others that provide the same service or function at a lesser price?
Managing a premium brand is one of the most difficult challenges in premium niche marketing. Like all business, they must pursue growth strategies. However, unlike many mainstream businesses, premium brands must do so in a way that doesn't dilute the brand's image or the user's sense exclusivity and pride. At times, brand managers may have to forgo short term growth opportunities in order to maintain long term health of the brand.
Consider an example of blackberry which used to be premium brand at one point of time. But as the increased competition in that segment forced them to reduce their prices and launch products which are aimed at mass market making it no longer a premium brand.
The communication message for premium brands has become more complex with the complex nature of market dynamics. There are people who want to shop at Big Bazzar wanting to buy cheapest trousers, cheapest sneakers but still want coffee at barista and ipod.
Brand Managers must know that premium products branding is an art that goes deep into the psychology of the consumer to satisfy their inherent needs.
