Premium VS Luxury: All You Need To Know
Often many people confuse premium with luxury. There is a difference between these two terms. First, let’s define each one.
Premium Brand
What is a premium brand? Loosely defined, a premium brand produces quality products that are not necessarily expensive. Nonetheless, the products are top-notch and of good quality.
For example, BMW is a premium brand, and the quality of its cars attests to this. The engineering of BMW cars is premium. Although recently, BMW began playing in the luxury segment with the unveiling of the BMW X7.
Luxury Brand
On the other hand, a luxury brand is also of good quality but is exclusive. It targets a particular class of people who have taste for exclusivity. They do not do all-comers affairs. For example, let us review two auto brands: BMW and Rolls-Royce.
Rolls-Royce is a quality brand that is bespoke. It is tailored to suit the taste of those who can afford it. Rolls-Royce gives its clients the rare opportunity to build a car to their taste, the way they like and desire it. Often, no two Rolls-Royce cars are the same because each one is custom-built. Hence, it is rare to see anyone driving the same kind of Rolls-Royce because it is exclusive to each client. This exclusivity distinguishes a luxury brand from a premium brand and makes those who are not in the luxury class want to belong.
Exclusivity Is the Word for Luxury
Luxury brands are about exclusivity; therefore, luxury brands manufacture limited editions of their products to limit the demand for them. Brands deliberately limit supply so only a small fraction of the affluent can access it. That is why there is a curated waiting list of people who are deemed qualified, either because they are known collectors, previous owners or long-standing associate of the brand. Luxury is about belonging to a privileged class and fulfilling dreams.
Exclusivity, however, comes at a price. Therefore, you cannot compare the price of a Rolls-Royce to that of a BMW. The high price of a Rolls-Royce covers the cost of artisanship, time spent on the design and engineering, and the rarity. A luxury brand is usually ‘spoken for’ by the customer unlike premium brands, otherwise called Masstige (mass prestige) brands. ‘Spoken for’ gave birth to the term ‘bespoke’ which means the product is spoken for by the client; it was made to the taste and specification of the client.