Premiumisation is especially well-suited to mature categories with little room to grow through penetration and middle-market brands. There are many different ways to execute premiumisation. Whichever is chosen, offerings need to pay attention to the details of product, packaging and messaging to satisfy premium consumer expectations, and focus on driving mental and physical availability at the intended price point

Definition

Premiumisation is a growth strategy where some category volume is converted to a higher value by persuading consumers to pay more for it.

Key insights

1. Premium launches should focus on mental and physical availability at the intended price point

Launching a premium brand is one way to execute premiumisation but there are other alternatives such as investing in existing categories with a more premium business model or using disruptive innovation to command a higher price on existing mainstream brands. 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 and aim for broad distribution. Price promotions are not a good way to attract new buyers. There are far better alternatives, such as advertising, better physical availability or sampling.