Pricing
Tactic
Don’t Discount Premium Products
Discounts can tarnish a luxury brand. Emphasize the quality of your product instead.
Overview
Luxury discounts are usually harmful:
- Weaker Brand. Customers buy luxury brands to boost their status. Discounts weaken this status because the brand is more accessible to a wider audience.
- Price Sensitivity. Customers focus on price, rather than quality. And luxury products don't win on price.
- More Likely to Wait. Customers are more likely to wait for the next discount, especially for premium products (Wathieu, Muthukrishnan, & Bronnenberg, 2004).
- Wathieu, L., Muthukrishnan, A. V., & Bronnenberg, B. J. (2004). The asymmetric effect of discount retraction on subsequent choice. Journal of Consumer Research, 31(3), 652-657.