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Don’t Confuse Luxury With Premium: 8 Key Differences
We pay a premium for luxury, but luxury isn’t always premium.
We pay a premium for luxury, but luxury isn’t always premium.
We often assume that by paying for a luxury item we’re paying for a premium product that will last longer than a lesser-priced alternative. However, this isn’t always the case.
Although the terms are often used interchangeably, subtle differences exist between a luxury brand and a premium brand.
Before we get into this comparison of luxury and premium brands, I have a couple of questions. Do you think BMW is a premium brand or a luxury brand? What about Rolex watches?
What is a Premium Brand?
Premium brands have a higher price than most of their alternatives on the market.
These brands are typically defined by their high price-to-quality ratio, high quality, unique features or benefits, or another competitive advantage.
Premium brands rarely receive significant discounts or stock clearances because this dilutes their value in the minds of consumers. To justify their purchase, customers must see value in the higher cost of premium-priced products.
