Luxury, Prestige, Premium: All are words that seem interchangeable, but actually have different meanings. Nonetheless, they all relate to a market that is by far today’s hottest.

Does Premium mean “better?” Does Luxury describe “quality and style?” Does Prestige connote “status?”

What are the nuances of these terms, and how does the consumer relate to them?

The dictionary definition of Premium is “something of greater or superior quality.” A brand is considered Premium only when we believe it is worth the price. We are willing to pay more for a product when it has that X-plus factor that makes it unique.

A Premium brand is built upon specific tangible and intangible attributes that give it a sense of worth:

Sensual: It arouses our senses and feels indulgent. It is an experience. We want to touch it; we enjoy looking at it. (Think about Steve Jobs’ obsession as to how an iPhone should feel in your hand.)

Mysterious: It draws us in more deeply and reveals more to us over time. We are intrigued to learn its backstory. (Witness how Land Rover cultivates its image as a global trekker to set it apart from the herd of grocery-hauling SUVs.)

Rare: It represents a discerning choice, intriguing because it is uncommon. (Audi has cultivated this particularly well—the thinking person’s alternative to BMW and Mercedes.)

Confident: It projects a feeling of intrinsic worth. (Burberry didn’t ask permission to transcend its classic trench coat. It confidently asserted its plaid onto a wide portfolio of products and dared us to question its right to do so.)

Authentic:  It knows its “true worth” and remains committed to this ideal. (Ritz Carlton’s premium experience is a direct result of its mission statement: “Ladies and gentlemen serving ladies and gentlemen.” With this simple ethic, the hotel’s employees know exactly the business they are in and how they should serve customers.

Quality: It is consistent and shows obsessive attention to detail. (Tiffany understands the premium cues conveyed by a detail as simple as a white bow on a blue box.)

Buying An Experience

“When we buy experiences, those purchases make us happier than when we buy things,” says writer and consultant Joseph Pine, citing a 2014 Boston Consulting Group report which reveals that of the $1.8 trillion spent on “luxuries” in 2013, nearly $1 trillion, or 55%, was spent on luxury experiences. “Some large part of that trillion is luxury transformations—people looking to recharge, revitalize or to improve well-being in some way,” says Pine.

Marketing a Premium brand demands that we think through every facet of the brand experience. It’s the “three P’s” that Revlon founder and my first boss, Charles Revson, taught me: A brand’s success depends upon the right packaging, product and promotion.

The experiential quality of both seeing and touching a fragrance bottle or lipstick tube can create a sensual bond between the product and the consumer. I call it “tactile communications.” It’s the subliminal quality that speaks to the taste, style and aspirations of the customer.

Packaging matters. The right fragrance bottle, makeup or skin care containers that connote Premium matter; the choice of colors, materials and lighting in the store matter; attentive customer service matters. And within the company itself, culture matters. Culture is often the alpha and omega of successful brands—particularly in the case of Premium brands.

What is the definition of Premium? A special recipe: A pinch of Luxury, a tablespoon of Prestige and a lot of style.

About the author:
Marc Rosen is a world-renowned packaging designer, the winner of 7 FiFi Awards and the principal of Marc Rosen Associates. He is a member of Beauty Packaging’s Board of Advisors.