What Is a Premium Brand?
A premium brand is an individual, company, product, or service generally perceived to have exceptional value in the target market's mind.
POST UPDATED:
May 1, 2025
Have you ever bought something because of how it made you feel?
I have.
Ray-Ban sunglasses are an example.
I’m not sure what it was about Ray-Ban that got my attention. Maybe those publicity shots of Dean Martin sporting a pair of Wayfarers throughout the 1950s had something to do with it. Or it could have been when the Blues Brothers made them part of their trademark look in 1980, or when Tom Cruise made Aviators famous six years later.
It doesn’t matter. I’m a lifer. I like them for several reasons. But most of all, I like the way I feel when I wear them.
Now, I know wearing a pair of Ray-Bans won’t make me as cool as Dean Martin or Tom Cruise, but…
My affinity for Ray-Bans is the essence of the premium brand.
So how do certain products and services actually make us feel something when we buy them?
And what can you learn from these brands that will help you build a unique brand of your own?
In this post, you'll learn:
What makes a brand "premium"
The secret behind premium products and services that makes us want them
Three layers of benefits premium brands offer
How to implement a premium brand strategy
What makes a brand “premium?"
Defining what a premium brand is can be difficult. Each individual has their own definition. Thus, what matters to one person may not matter to another. A premium brand is an individual, company, product, or service generally perceived to have better quality and exceptional value in the target market’s mind.
Premium brands offer a combination of supreme quality, value, purpose, and exceptional experience.
When asked, most people associate "premium" with a higher price compared to other brands. But the high price is not the only characteristic of a premium brand.
Here are some others:
- They outsell competitors on a per-unit basis (sales volume, profit margins)
- Higher customer satisfaction ratings (i.e., 5-star reviews)
- Higher customer retention rates and repeat buyers
- A customer base that promotes the brand (also called brand loyalty)
Brands with premium status share specific characteristics and traits that make them appear superior. Since it's tricky to articulate exactly what a premium brand is, I’ll use an example to illustrate.
In the United States, water is a commodity. (Sadly, this isn’t the case everywhere.)
Almost anyone in America can walk over to the kitchen sink, turn on the faucet, and get their fill. Yet, the demand for premium H2O continues to grow in the United States and abroad.
When they first came to market, premium water brands claimed bottled water was safer to drink. But no one could agree. So, rather than leverage “safety” as a value proposition, the water brands promoted other reasons to buy.
Convenience became a primary selling point. For instance, bottled water is easier to carry and store. Place of origin has become another popular quality marker for bottled water. There is a theory that water harvested from particular locations is cleaner and tastes better. But, of course, there is no way to prove or disprove this theory.
Water brands found yet another way to create higher value. Market research revealed that a specific segment would pay more for particular health benefits. So, premium water brands claimed their product provided those benefits and targeted the consumers that wanted them.
The irony of it all?
Most people didn’t know the health benefits of premium water until the water brands told them. At that point, bottled water became much more than just water—it became something more.
Want proof?
Believe it or not, a company produces bottled water that sells for as much as $60,000.
I doubt either of us will pay thousands for a bottle of water any time soon. But we have likely both paid a few bucks for one at a local convenience store.
A premium brand is not a luxury brand
Though there are some similarities, there are differences between a premium brand and a luxury brand. While luxury consumers prioritize the status associated with a particular brand name over the function of the product itself, premium consumers seek a quality brand that offers the best value and performs at a high level. They expect the product to function at a high level and will pay the additional cost for the quality it provides. However, premium brands can’t become luxury brands simply by raising their prices.
Broadening Appeal
Premium brands strive to reach a larger audience by focusing on the quality and value aspects of their offerings. They target a wide range of consumers who are willing to invest in superior quality without the exclusivity of luxury pricing. This approach ensures a broader market reach, capturing those who want more than just a basic product but aren't necessarily looking for the prestige associated with luxury items.
Value-Driven Marketing
Marketing strategies for premium brands emphasize the balance between cost and quality. By highlighting this price-for-value proposition, these brands effectively communicate their benefits to a diverse audience interested in upgrading from basic versions of products. This messaging resonates with consumers who prioritize performance and durability over mere brand prestige.
In essence, premium brands differentiate themselves by delivering high-quality products at a justified price point, appealing to a larger and more varied consumer base than luxury brands.
Why we will pay more
Looking back over the premium water example, we can see the elite H2O brands became successful by:
- Promoting certain benefit claims valued by a specific target audience
- Making claims of product superiority while providing evidence to support those claims
- Demonstrating how their water harvesting process is superior to others
- Teaching consumers how to compare bottled water brands while promoting their brand as the standard for comparison
These companies also did something many of us would think impossible—they sold water at a higher price to an audience with plenty of water.
They tapped into their audience’s desire to be smart and healthy. Of course, status played a role as well. Starbucks has followed a similar model using coffee.
Premium brands position their products or services in a way that makes them more valuable. People want to feel competent, desired, even envied by others. If a product or service can help them experience these feelings, they will value it more—and pay more for it.
But how do these brands convey this value to a wider audience? Unlike luxury brands, which often focus on exclusivity, premium brands aim to reach a broader spectrum of consumers. They target anyone who is willing to pay a bit more for an upgrade from the value version of a product.
Key Strategies in Premium Brand Marketing:
- Price for Value: Premium brands emphasize the quality and benefits of their products, positioning them as worth the extra cost. This approach taps into the consumer's desire for quality and reliability.
- Inclusive Messaging: Their marketing campaigns are designed to be inclusive, delivering messages that resonate with everyone interested in their product category. This strategy ensures that their appeal isn't limited to a niche market but extends to a larger audience.
By combining perceived personal benefits with strategic market positioning, premium brands effectively bridge the gap between exclusivity and accessibility, creating a compelling narrative that invites more consumers to experience the elevated value they offer.
To drive the point home, let's look at an industry-specific example.
What Are Examples of Premium Clothing Brands?
Premium clothing brands often stand out for their exceptional quality, stylish designs, and brand prestige. Here are some prominent examples:
- Chic Streetwear Labels: Delivering urban flair with a sleek edge, these brands combine comfort with high fashion.
- Luxury Sportswear Innovators: Known for pushing the boundaries of athletic apparel, they merge functionality with modern aesthetics.
- Timeless Classics: These brands embrace tradition, offering elegant designs that never go out of style.
- Fashion-forward Icons: With a finger on the pulse of the latest trends, these labels continually set the standard for contemporary fashion.
Each of these categories reflects a commitment to craftsmanship and a distinct style ethos, making them revered names in the fashion industry.
What segments of the brand pyramid do premium brand often occupy?
Premium brands typically find their place within specific tiers of the fashion pyramid, primarily occupying the bridge and diffusion segments. These levels are distinguished by offering high-quality products that remain accessible to a broad audience without being mass-market.
Bridge Segment:
These brands offer fashion-forward designs with a more affordable price point compared to luxury labels. They strike a balance between luxury and accessibility.
Diffusion Segment:
As a step below main designer lines, diffusion provides designs from famed designers at a reduced cost, appealing to fashion enthusiasts seeking style without the premium price tag.
While premium brands are nestled here, some manage to extend their reach into the mass market by balancing quality with broad appeal. This expands their customer base while maintaining their identity as premium options.
Attributes of a premium brand
For a brand to become “premium,” it must possess specific characteristics. These traits make it superior in the target market’s eyes.
Let’s look at each one.
Quality
Quality itself is subjective. People don’t always agree on how to define it. So, it isn’t enough for a brand to claim superiority—they must prove it.
Most consumers assess the quality of a physical product based on its performance, exceptional features, and reliability. Better material, ingredients, and innovative manufacturing processes are examples of traits used to create a premium brand perception.
For service industries, assessing quality is a much different process. Expertise is the primary quality marker for service providers.
If people believe you are among the best at what you do, they're more likely to pay your price. Service providers can demonstrate their expertise through content, such as blogs, books, and courses. Building authority, while time-consuming, is an effective way for service providers to earn trust.
Price
Ironically, consumers use price as an indicator of quality.
In their minds, there is a correlation between the quality of a product or service and its price. Likewise, if the price doesn’t align with their view of premium, they will see the item or service as too expensive.
For example, the price of a new Mercedes S-Class Sedan is around $94,000. But if someone offered to sell you a new Mercedes S-Class for $30,000, you better make sure it isn’t stolen. It makes no sense that you could buy a new Mercedes for less than half its market price.
The psychology here is that if it is too good to be true, it probably is.
Value
Everyone wants the biggest bang for the buck.
To charge more, customers must believe the value they are getting exceeds what they pay. But like quality, value is often debatable.
For example, one person may buy a car for its safety features. Another may buy it because it is American made. Both people bought the same car but valued it for different reasons.
Many businesses assume they know why customers value their products and services. But a premium brand invests time and resources to understand what their customers want and expect. Then, they use this information to deliver multiple layers of benefits, not just a few.
The premium trifecta
Product or service benefits are one trait that separates premium brands from all the others. But many companies, and even individual consultants and freelancers, struggle to establish unique benefits that set them apart from the competition.
Many businesses sell promises, such as “we have great customer service” and “we’re good at what we do.”
But those claims won’t convince anyone to buy because every company makes the same promises.
A premium brand digs deeper to deliver three specific types of benefits: functional, technical, and emotional.
Functional benefits refer to a product’s or service’s ability to meet a need. For example, a car’s function is to get someone from one place to another. An accountant’s function is to help people file their taxes.
Technical benefits relate to features and performance. These benefits show customers why one choice is better than another, such as consistent delivery or long-lasting.
An excellent way to communicate technical benefits is to educate your audience on what matters in your industry. For example, remember the water brands in the section above? They helped their target market understand the technical benefits of bottled water and why they should care.
Educating your audience builds authority, too.
Finally, a premium brand delivers emotional benefits. Emotion is the driving force behind purchasing decisions, not logic. As a result, people buy the transformation that your product or service will help them make.
As you build emotional benefits, deliver them over the short- and long-term. Total transformations take a long time. Most people won’t be willing to wait. If they think it will take too long to achieve the change, they may not buy.
Delivering a short-term benefit will reinforce their decision to move forward. This time frame could be days or weeks, but should be no more than a few months.
Premium brands are on a mission
Most businesses have a “mission and vision” on their website, but few know how to create a narrative around it. Developing a brand story is a powerful way to connect with your customers.
Most business owners keep their passion and vision to themselves. But customers are more interested in what you can do for them than your business’s mission—at first.
While they may not care about why you’re in business, they care about your business’s purpose. Recent research shows that people are at least four times more likely to buy from mission-driven companies.
To develop an engaging brand story, connect your customers’ desires to your business’s mission. Then, create a narrative that makes your customers part of the journey.
A brand narrative is ongoing. Use it to share experiences that will build interest in your organization. For example, tell your audience about the innovative processes you have developed and share customer successes.
Let them in on the obstacles you face and how you are overcoming them. They will appreciate your willingness to show them you are human, too. Often, they will rally around you as you fight the good fight.
Premium brands create a memorable experience
Brand experience describes the sensations, feelings, cognitions, and behavioral responses people have while interacting with a brand.
In other words, it is what people feel before, during, and after the sale.
For many businesses, the relationship with the customer starts with the sale. But a premium brand begins the process much sooner, long before a customer buys their product. They use multiple touchpoints to communicate with customers in each phase of the buying journey. The goal is to lead them through the customer journey.
The customer journey is an ongoing process that never ends.
Exceeding customer expectations is also part of the brand experience. Everyone makes promises—only a few follow through. A premium brand creates an experience based on what their customers want, and they deliver it consistently.
Build a premium brand with The Brand Auditors
Premium brands don’t happen by accident. They have the desire, boldness, and discipline to stand apart from the crowd. But, most of all, they have a plan.
Do you want to attract customers who appreciate the value you offer and increase profit?
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- Increase ROI on lead generation and sales conversions.
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