All You Should Know about a Premium Product
In the simplest form, a premium product is the one believed to offer more value than competitors and so it comes at a higher price. A premium product is head and shoulders above the rest in many ways. Some products are premium because they were manufactured by a premium brand. For instance. Apple is a premium brand, so any product manufactured by Apple is already a premium product.
Here are some of the qualities of a premium product and if you intend to fashion your product as a premium product, you should work on the features.
They offer fewer choices
Many premium brands give their customers fewer choices. Whether it is iPhone 8 or iPhone X, their prices are close and they offer the same values. Unlike Samsung that has low end, midrange and high end devices, Apple has only high end phones. Most people buy Samsung devices because of its superior functionalities while most people buy iPhones because it is owned by Apple. Their functionalities are the secondary reason people opt for them.
Premium products are much more expensive than their competitors and that is why the few that can afford them go for them. You know some people prefer to buy products that is way out of the reach of the mid or lower class. In other words, premium products are ostentatious products that people buy to show off their wealth.
Raising the price of a product ahead of others gives certain belief that the product offers higher value than others. While this is true in some products, it is far from the truth in others. Take Rolex for instance. What value does Rolex watches offer that no other wrist watch offers? Before the advent of Apple iwatches, there used to be only two categories of wrist watches – Rolex and others. You must have heard statements like “it is not just a wristwatch, it is a Rolex”. That is exactly how people perceive most premium products.
They have class distinction
Premium products have class distinction because they are usually not for everybody. The producers have a certain small number of people in mind. Using Rolex as example again, the watch is said to offer an esoteric value. In reality, this value is imaginary. It is just a touch of class.
Some products are premium because they offer unique and superior product design. In terms of alcohol or beer, you may think taste is more important than packaging. Well, Absolut has proved you wrong. Most people go for it because of the design of its bottle. In fact, some people make a collection of the bottles after exhausting its liquid content. That shows that packaging and design also matter.
Some premium brands offer technology that is far ahead of others. For instance, no company can match NVidia when it comes to graphics in video games. So, game app developers that want to develop game apps with stunning graphics have to use Nvidia.
This is the most difficult one. Brands that have positioned themselves as premium brands need to consistently produce what their target market appreciates. Premium brands must always deliver. Apple is a good example. Virtually all Apple products are successful.
However, in spite of the huge profits that premium brands rake in, they also face serious challenges. Here are some of the challenges faced by premium brands.
Premium brands and premium products have face serious counterfeitings. Some criminals will produce replicas of the products and sell to some unsuspecting customers. Viagra is arguably the most effective, the most popular, and the highest selling drug for erectile dysfunction and it is also the most counterfeited drug.
So, premium companies have to spend huge sum of money to educate their customers on how to differentiate their products from imitations. Unfortunately, this has to be a continuous battle as counterfeiters will continue to make imitations.
Since premium products are usually priced for the wealthy, Sales are relatively lower because customers of such products are very few. To make matters worse, the numbers of customers increases at a very slow rate. This is why they have to price the products to cover necessary overheads.
Higher inventory cost
Since the sales of such products are relatively lower, they remain in the inventory longer than other products. So, manufacturers have to pay more on inventory and also produce the products in smaller quantities
Difficult to market
Premium products are usually difficult to market because most prospects will rather compare on price and premium products do not compete with prices. So, marketers of these products have to make extra effort to let the buyers know that quality and durability make premium products much cheaper in the long run because they last longer.
While premium brands do not face competition from cheaper brands, they still get to compete with other premium brands. In terms of mobile devices, Apple does not compete with other lower brands but they still face stiff competition from Samsung.
Tips on how to sell premium brands
Here are some important tips on how to sell premium products. Since most people buy premium products to show class, you should always take advantage of this in your market copies. You can include statements like this – Do you want to join the same bandwagon with everyone or you want to stand out from the rest? This is all about ego psychology.
Don’t advertise to just anyone. Premium products are better advertised to the few that can afford it. So, you need to assess your prospect before marketing your premium products or you will advertising beer to a teetotaler.
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