Premium pricing: Understanding the value of premium

Changing consumer perceptions of luxury are complicating the process by which consumers decide whether or not paying for premium branded goods and services is worth it. This study indicates that consumer behaviour is reflected in changing market conditions and that factors such as personal interest in the spending category are very important in determining whether consumers will pay more. This underlines the importance for companies and organisations of understanding trends in consumer behaviour and lifestyle. The study also explores how the expansion of the price spectrum in specific brands and markets is allowing consumers to shop at the price point which suits them, which creates more entry points for luxury shopping and satisfies demand for low prices. It also suggests that long–term shifts in consumer attitudes are behind the proliferation of intangible attributes that consumers associate with ‘premiumness’.