People often conflate higher costs with higher quality. The two concepts seem intrinsically linked. We have a natural inclination to believe, “Well, that company must be charging that much for that product for a reason.”
That mentality — that instinct that often leads us to believe expensive means better — is the basis for a pricing strategy known as prestige pricing. It’s a tactic businesses leverage to shape premium brand perception by charging premium prices.
Here, we’ll review the strategy in-depth, touch on what it takes to leverage it, and look at some prominent examples of the technique in practice.
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