Prestige pricing

Definition

Prestige pricing is a strategy where businesses set higher prices for their products or services to signal superior quality or luxury status, aiming to attract customers who associate higher prices with higher value. This approach relies on the perception that high-priced goods are inherently more desirable or valuable.

Related terms

Price Skimming: A strategy where a company charges the highest initial price that customers will pay for a new product and then lowers it over time as demand decreases.

Market Penetration Pricing: A strategy involving setting lower prices for new products to attract a larger customer base quickly and gain market share.

Value: Based Pricing - A strategy where product prices are based on the perceived value to the customer rather than on the cost of production or market competition rates