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.