What's up brand builder Stephen Houraghan here at brandmasteracademy.com and in this video you're
going to learn how to create a premium pricing strategy to build a prestige brand so you can
effectively target customers who want more and build your prestige brand reputation as you do it
now if you're new to the channel and you want to build brands that go beyond the
visuals using strategy psychology and creative thinking and you're in the right place hit that
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now i recently created a video on how premium pricing strategy works with some of the best
examples from brands such as apple and nespresso now if you haven't seen that video make sure you
check it out i'll leave a link in the description below but essentially premium pricing strategy or
prestige pricing strategy as it's also known is a strategy used by businesses and brands
to elevate the perception of the brand and increase their profit margins by pricing
products higher than their competitors higher prices are associated with higher quality so
simply by association the price perception alone impacts how your target market sees your brand so
why use premium pricing well premium pricing isn't always an applicable strategy in some cases it may
very well be the wrong strategy depending on the target market and the desired position premium
pricing may be used in the following scenarios the first is disassociation or depositioning
some markets are saturated with budget options that ignore market segments who don't want bottom
drawer prices now these segments are prepared to or in some cases are looking to pay more for a
better option so higher prices disassociate from these budget options and depositions the brand
from those competitors next is luxury association brands that want to establish a sense of prestige
and luxury will most likely leverage a premium pricing strategy with higher prices compared
to their closest competitors next is first mover advantage so brands with first mover advantage or
early introduction of a new product or approach can set the benchmark with premium pricing in that
category in this case there are no lower priced options putting the brand in a real position of
power next is exclusivity so where production is limited for example they can only produce
a set number of units per year or they can only work with a certain number of clients per year
brands can set premium pricing to establish a sense of exclusivity next is a patented process
brands that are able to protect their unique processes with patents can establish a competitive
advantage and set premium prices without the fear of being undercut by a similar offer
next is high barriers for entry so when a business has access to extensive funds they have an
opportunity to create products with high quality that competitors will struggle to compete with
in this case the cost is passed on to the consumer though a premium margin is also expected next is a
unique experience so many brands pride themselves on the experience and the high attention to detail
that they offer their customers and where brands offer a distinctly unique experience from their
competitors a premium pricing strategy should be considered now implementing a premium or prestige
strategy is not simply a case of slapping a high price on your products or services and expecting
your customers to pony up if you're going to ask your customers to pay more for your products or
services than they would your competitors you'd better be sending the right signals
so let's take a look at exactly how to do that but before we do if you do have any questions
drop me a comment below and of course if you like this video hit the subscribe and the like
and the notification bell will let you know when i release new videos just like this the first way to
establish your premium prices to align your value with your price point though there are some market
segments that expect to pay more for better no one likes to have the wall pulled over their eyes to
be duped or to feel stupid so if you're setting your prices at a premium then you'd better have
a compelling reason that your customers value to justify that extra spend now this can come
in the form of many different things including ingredients materials taste nutrition experience
design reliability performance etc next up is premium visual identity so if you want to play the
part you would better look the part with a visual identity that speaks to your premium positioning
the category that you're playing in and the market segment that you're targeting
will be instrumental in determining the look and feel of your brand though it's essential that
your identity communicates the right message visually next is your unique user experience
so as i mentioned earlier the path to purchase for prestige price products is typically longer
depending on the category so this means the more touch points that are required in each touch point
must be aligned to provide a seamless experience so for example if your website user experience
or your in-store design looks templated cookie cutter or void of customization or uniqueness
it will work against the prestige that your price suggests next up is taylor brand messaging now
all brands should understand who their audience is and exactly how to speak to them through tailored
messaging but this point is especially relevant when it comes to premium positioning while some
brands in certain categories may survive with broad-based messaging to mass markets prestige
positioning requires delicacy and finesse with targeted messaging speaking to the personality to
the class and to the desires of the audience next up is to create exclusivity now customers rightly
expect higher quality to match the higher prices that's pretty much a no-brainer but in most cases
it's not just the quality that they're after but the exclusivity that comes with the purchase
so although mercedes-benz buyers expect prestige design and superior engineering exclusive social
status is also a factor in their buying decision another way to establish premium positioning is to
leverage brand attributes so consumers want to see themselves in the brands that they buy which is
especially true when it comes to premium purchases we all have aspirations to be the best version of
ourselves and prestige brands must communicate to their audience that they are the person that they
aspire to be brand attributes communicated through visual identity through messaging and storytelling
and experience aligns the brand with the aspirations of their target market
and finally avoid promotions premium positioning is not a price and strategy that you use today you
drop tomorrow and then you pick up again next week if your niche market is after exclusivity as much
as quality then you give away that exclusivity by dropping your prices with promotions promotions
also erode the prestige associations that you build up and over time that erosion becomes
irreversible now as i mentioned earlier premium pricing is just one pricing strategy among many
although many brand leaders aspire to build brands with prestige to build luxury brands or prestige
brands with aspirational attributes and high profit margins it's not what the brand leader
wants that matters as with anything in branding all decisions must consider who the target market
is what they want and how to give them what they want in a way that's effective and efficient for
the business if your market desires exclusivity prestige high quality or all the above and if they
have the budget to pay for it then a premium price point may just be the pricing strategy that you
need now defining your pricing strategy is just one consideration when it comes to developing your
position in the market if you want to understand how to create a position for your brand then this
video will help you out until next time brand like a master and i'll see you in the next video