We know the meaning of luxury brands. However most of the time we tend to confuse luxury brands with premium brands. Both the words are similar, both are expensive and yet, there’s a difference. How do you differentiate between the two ?
Some of the examples of luxury brands can be Dior, Mont Blanc, Hermes, Balenciaga, Versace, Cartier, Rolex, Salvatore Ferragamo and it goes on. Premium brands on the other hand include brands like Nike, Adidas, Louis Philippe, Zara, Tommy Hilfiger, Calvin Klein, etc.
Luxury brands provide exactly what the name sounds like. They give you luxury and not benefits. They know their audience is not looking for benefits or advantages, they are looking at the name and prestige that comes with it. It’s not about the practicality, it’s more about the looks. Luxury does not satisfy a need or provide a solution to a problem. Luxury shoppers are more interested in a brand’s history, status, and distinctiveness than in its competitive advantage. Products of luxury brands are extravagant displays of riches based on strong social cues including social elevation, a perception of timelessness, valuable experiences, and a strong hedonistic urge.
Recently, Adidas and Gucci collaborated and launched an umbrella. It’s part of the adidasxGucci collection. The red and green umbrella is being sold for $1,644 which is 1,27,566.18 Indian Rupees. This is not the surprising part, the shocking part is the fact that this umbrella doesn’t fill the basic requirements of an umbrella. Yes you heard it right, this umbrella doesn’t protect you from the rain. It’s not waterproof. The umbrella has been made in Italy and comprises carved birch-wood handle, green and red web and G-shaped handle. Gucci further states, “Please note, this item is not waterproof and is meant for sun protection or decorative use.” The truth is even with it not serving any benefits, there are loyal customers that will buy their products no matter what. There is hardly anything in the world that’ll stop them from buying luxury products. They trust the brand and are loyal to it. This is because of the image that the brand has built over the years.
Premium brands provide you with the finest features at the best price. Premium brands are also expensive. However they are priced a little lesser as compared to luxury brands. They have an almost one-to-one functionality-to-price ratio. As a result, people are willing to pay a high price for the finest features and quality. They believe it is worthwhile. The items are priced depending on its purpose and quality. For example, if H&M chose to produce a line that used higher-quality materials than normal and paid a higher price for it, it would be considered a premium brand. In other words, you get more for spending more.
There are a differences between the two .
- Price :
It is obvious that luxury brands are more expensive, but it’s not true always. The difference is luxury brands charge for the name whereas premium brands, even though a bit pricey, they offer products that is worth for the price they charge.
Premium brands strive to provide the highest value to their consumers as well as to themselves. They are extremely sensitive to market competition.
- Features :
Luxury brands don’t think too much on the features they provide. They can sell even the most futile and impractical products and people would still buy them.
Premium brands on the other hand set the benchmark for quality, usefulness and excellence in the market.
- Audience :
Luxury products are not for those who are price sensitive. The target audience of these companies are people who don’t think twice while buying something.
Premium brands have an audience who push themselves to afford their products. These companies motivate their consumers to pay a price that is higher than the price of an average brand.
- Advertising :
Have you ever seen advertisements of Gucci or Rolex ? I guess not. The truth is luxury brands don’t advertise themselves in a commercial manner. They know that their customers do the advertisement for them.
Premium brands however have to think in a unique manner in order to advertise themselves. Premium brands account for a significant portion of the advertising industry. Their charges are proportional to how much advertising they perform. These companies are also the ones who are always innovating and pushing the advertising industry ahead.
- Manufacturing:
Since luxury brands are for the top 0.1% of brands, they rarely mass produce their products. They make their products on order which adds to their exclusivity factor.
Premium brands definitely don’t mass produce as much as average brands but they do produce quite a lot.
