Premiumizing A Product

How do you look at premiumizing a product? Changing the perception around a brand or a product, to move up the price ladder? How do you look to do that with a brand? You can use Beam or any other product, as an example.

There are some universal truths. This is not easy. The first thing, I think, if you have conditioned consumers to believe that they can find you on a discount, they’re going to wait to find you on a discount. That’s very common practice, across many categories. You have to be very careful on how you use discounts and promotions, over the years. Secondly, the only way to command a premium is through brand equity, unless there’s a supply and demand issue. Right now, toilet paper can command a premium. This is a unique moment in the world, right now. That said, in spirits, supply and demand matters, because there is a scarcity that can absolutely dictate the price that people are willing to pay.

We should recognize that as a real thing and that’s true in airline ticket availability and ride share availability. In many things, supply and demand will certainly dictate the marketplace, to a degree. But in answering your question more specifically, on brand building, the ability to command a premium and sustain that premium, over time, and to have people choose you when there is a less expensive alternative, will come down to how important your brand is to them. What it means to them, why they are choosing it. They believe you are better; they’ll advocate for you. That is one of the strongest positions you can be in, but it takes time, it takes consistency and it takes delivering on that brand promise, every single time. So they believe, when they buy you, when they pay a premium for you, that you are worth it.