How to grow via premiumisation
This article is part of a series of articles on premiumisation. Read more.
Need to know
- Premiumisation is a way to grow, particularly in mature categories where growth from penetration is constrained.
- Launching a premium brand is one of several ways to capitalise on premiumisation.
- A premium brand or offering needs to acquire new customers, so it needs to build mental and physical availability.
- Buyers of premium brands are not necessarily different to buyers of mainstream brands, so avoid narrow targeting.
- There is no evidence that broad distribution hurts a premium brand.
- Price promotions can be counterproductive to the premium brand. Cutting prices and margins makes little sense in a growing price tier. Evidence shows simple price cuts don’t attract new buyers. There are far better alternatives, such as advertising, activities aimed at inducing trial, and increasing availability.
- Communicating to channel partners about the revenue opportunities from premiumisation is key.