Dillco Support

Premiumisation

… Premiumization can be understood similar to brand equity. If brand equity is the commercial
value that is derived from customer perception, then premiumization is the vehicle from which
that value is achieved. At the heart of premiumization is the understanding of how customers
perceive and assign value. Merely tracking awareness and intention measures is not enough to
inform actionable business decisions. Instead, focusing on what drives price premiums in a
category allows strategic and actionable paths to move the commercial needle. Based on an
extensive review of the behavioral science literature we have identified 6 key pathways to
command premium prices from a customer. The paths are not just rational product attributes or
functional benefits, but the deep social, psychological and emotional reasons customers pay
premium prices for products.

Source: ​https://greenbookblog.org/brand-impact/premiumization-the-key-to-brand-growth/

We have summarised our top 5 tips for addressing premiumisation today:

1) Build desire – Using powerful creative thinking to identify and drive real difference, creating a
new future definition, language and space that does more than keeping up with the Joneses and
truly builds new expressions of desire.

2) Create new occasions – It’s about adding new meaning, value and occasions but in an
authentic way that connects back to the core of the brand – creating value but not valuing the
brand out of its own market.

3) Reach different audiences – Luxury is no longer defined by clichéd expressions and instead
leads on imagination and originality to assert its status in new ways, allowing brands to open
themselves up to new audiences.

4) Build long-term kudos – Premiumisation needs to come from the heart of the brand. It’s about
staying true to that and finding ways to build on and heighten that specialness.
5) Surprise us! – Those looking to master premiumisation ultimately need to be influenced by
the luxury approach – returning to its quintessential beliefs to create happiness and pleasure
through ever more unique and individual future expressions.

We will always aspire to a better quality of life. Luxury makes us feel special because it is
special. Premiumness, as with luxury, establishes difference – our difference – but at a price we
can afford and in ways that we can incorporate into our daily lives. If brands can develop a truly
resonant understanding of what premiumisation means for them they can use it masterfully to
take their brand to a new level, communicating desire through unique and truly special new
expressions.

Source: ​https://www.pearlfisher.com/perspectives/what-is-premiumisation/

Niche Marketing

Niche marketing is defined as channeling all marketing efforts towards one well-defined
segment of the population. There is one important thing to understand that ‘niche’ does not
exist, but is created by smart marketing techniques and identifying what the customer wants.

Niche marketing is a marketing tactic deployed to target a specific market segment which is
unique. Niche market is often created by identifying what a customer wants and this can be
done if the company knows what the customer needs and then tries to deliver a better solution
to a problem which was not presented by other firms. A niche market does not mean a small
market, but it involves a specific target audience with a specialized offering. By doing so, the
company becomes a market leader and it becomes possible for other firms to enter that
particular segment. For example, there are various cinema halls across India, but there are few
which have recliner seats to offer. Not everybody wants to watch a movie by paying 5x-6x times
the cost of a normal ticket. Hence, the target audience is very different and the hall is also only
open at places where the company feels that it would be able to tap into target audience
especially in posh areas.

There are various advantages of niche marketing. One of the benefits of niche market is that
there is no or little competition under that segment. The company is virtually the market leader
and enjoys price monopoly. Another benefit is the strong relationship with the customers
because of the fact that the company operates in a small segment, the relationship between the
company and the brand becomes stronger which is also a key to customer loyalty. Niche
businesses are often high margin businesses. Customers do not mind paying a little extra
because they are only able to get that service in that company or under its brand.

Source: ​https://economictimes.indiatimes.com/definition/niche-marketing
Luxury Marketing

The first step is to understand that in the so-called luxury market, there are three possible
strategies, which I named in my book as luxury, fashion and premium. The difference between
these three strategies is huge. It does not change much in the eyes of most basic consumers, at
least in the short-term. But when one has to​ ​manage a brand​, the difference is pivotal. In fact, if
you decide to implement a fashion or a premium strategy, the classical marketing styles works
pretty well. But if you decide to implement a luxury strategy, you need to reconsider all the
aspects of your marketing management.

A. The ​luxury​ strategy aims at creating the highest brand value and pricing power by leveraging
all intangible elements of singularity- i.e. time, heritage, country of origin, craftsmanship,
man-made, small series, prestigious clients, etc.

B. The ​fashion​ strategy is a totally different business model: here, heritage, time, are not
important; fashion sells by being fashionable, which is to say, a very perishable value.

C. The ​premium​ strategy can be summarized as “pay more, get more.” Here the goal is to
prove -through comparisons and benchmarking- that this is the best value within its category.
Quality/price ratio is the motto. This strategy is, by essence, comparative.

The luxury strategy was originally developed for the broadly defined luxury market, and it is
there that you can find it the most today as well– in fact, it’s the most efficient strategy in this
market. It is seldom met on other markets, even though it can be very successful there, as
brands like Apple and Nespresso have demonstrated. There are 24 anti-laws (see the full list
below); thereafter, I analyze four that require an in-depth treatment.

The 24 anti-laws of marketing

1. Forget about positioning; luxury is not comparative.
2. Does your product have enough flaws to give it soul?
3. Don’t pander to your customers’ wishes.
4. Keep non-enthusiasts out.
5. Don’t respond to rising demand.
6. Dominate the client.
7. Make it difficult for clients to buy.
8. Protect clients from non-clients, the big from the small.
9. The role of advertising is not to sell.
10. Communicate to those whom you are not targeting.
11. The presumed price should always seem higher than the actual price.
12. Luxury sets the price; price does not set luxury.
13. Raise your prices as time goes on, in order to increase demand.
14. Keep raising the average price of the product range.
15. Do not sell.
16. Keep stars out of your advertising.
17. Cultivate closeness to the arts for initiate.
18. Do not relocate your factories.
19. Do not hire consultants.
20. Do not test.
21. Do not look for consensus.
22. Do not look after group synergies.
23. Do not look for cost reduction.
24. Do not sell openly on the Internet.