on 04 Feb 2020 7:17 PM
  • #marketing
  • #positioning
  • #premiumization
  • #design

“Premiumization” does not exist in the Thesaurus, yet it has been on every marketer lips for as long I can remember. If “Premiumization” is about adding features and bling to your packaging, it will end up as rubbish - not exactly what you want in these times of environmental consciousness. However, behind this idea, lies the desire to “improve value” and this requires giving meaning to your Brand. This, is what we call going "Beyond Premiumization".

About Brand Margins: in its simplest definition (Wikipedia knows…) Premiumization is the “move towards more expensive premium products”. If this is your strategy, this means delivering higher margins by increasing a selling price faster than the cost of goods. Without going into price elasticity considerations (*), premiumization works when it reinforces a brand proposition and is brilliantly expressed in every design touch point.

About Brand Proposition: you will always find a faster PC than a Mac, but there is an idea that Apple transmits than goes beyond technical power. This “idea” is the brand proposition, which is supported by a set of values, character and - of course – a product performance. Simply put, the higher the overlap between a Brand value set and its Target Audience value set, the more relevant the brand message becomes. Why? Because as social animals, humans enjoy the company of those they agree with, including brands.

The frameworks to build this relevance find their roots in psychology and behavioural science, which observe that brands play a role in social facilitation. Therefore, understanding a social occasion requirements helps identify a Brand Proposition. For instance, an expensive whisky will command respect and consideration in a business situation, whereas a cheap vodka will send more casual party signals.

About Brand Touch Points: once a Brand Proposition has been defined - or clarified, it needs to be brought to life in every aspect. For the packaging part, this is the job of designers, who transform a positioning into touchpoints. As the name suggests, “touchpoints” are all the contact opportunities of a pack. This goes beyond the obvious “looks” because the way we perceive and assess things, relies on implicit associations (**), i.e. the sometimes unaware references our brain makes with established benchmarks (cultural, education, experiences…).

For instance, a brand symbol on top of a brand name will suggest more lightness than the opposite because our brains associate the idea of elevation to escaping from gravity, and therefore lightness. To come back to the idea of “Premiumization”, it has been proven that heavier packs are associated with higher quality – which incidentally pauses a challenge in terms of environmental conscious design.

Shapes can be easy to associate with characters. For instance, a bottle with a square shape or broad shoulders will ooze masculinity. Cultural associations also matter: for instance, “Vintage” is in fashion, but a graphic territory in the 1940’s (effort and industry) will trigger different ideas than the 1970’s (flower power…). Also, the way one interacts with a product expresses a positioning : the way one grips a bottle closure can show power or skills, and that in turn should be aligned with the brand positioning. Last, “pricing” is also an element which builds premiumization as a higher price creates higher performance expectation, but this element is not controlled by designers!

In conclusion, if you wish to “premiumise” your brand, don’t add “bling” as it may not be relevant to your Target Audience. Instead, go beyond, ask yourself how your brand can enhance your consumer social occasions because emotional attachment drives relevance and empathy. Next, be clear in your design brief about what you want to transmit and work with designers who know how to bring meaning in touchpoints.

The following article is based on the speech delivered at the first Port Design Award Ceremony organised by BA Vidros and Amorim Top Series in January 2020.

(*) For more on Pricing Strategy and Management, see our introductory articles.

(**) If the topic of “Implicit Associations” interests you, have a look at “Decoded” by Phil Warden (Wiley).