Explores the myths of premiumisation, adding evidence to the topic by identifying the appropriate growth strategy, as well as how to manage pricing and price promotions for the premium offer.
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.
Within a particular product format, opportunities can be found using the classic “good, better, best” approach based on price per volume. Here the products are similar in type, and fulfil the same consumption occasion. The strategy involves creating discernible differences between price points, that will be recognized by consumers as important. Examples of these differences include:
A version of this strategy is creating gifting or seasonal offers with a minor modification to make the product more suitable for specific occasions; with a corresponding price premium. These examples illustrate that launching a premium brand is just one of many options to apply a premiumisation strategy.