Prestige products

Prestige products are goods that are perceived as being very high quality. The purchaser therefore is willing to pay more as he/she suspects that they have higher added value.

In fact prestige products not always have increased quality. The prestige sometimes comes from good marketing and that how other people see those products. For example, people buy prestige cars because they are prestige cars, and not because of high technical quality. In most cases it is possible to find similar functions in cheaper cars. That what is really important for those buyers is to show off.

For producer it is convenient to have prestige products, as then he can earn more. The margin is much higher, as buyer doesn't buy only the product, but also the prestige, which is virtual.

For example, an Audi is seen as prestige product, while Skoda as normal product. However, many parts used in both cars are identical (both are manufactured by Volkswagen) and functions are similar. But the prestige related to Audi is higher than to Skoda or Volkswagen.

References

At work.png

This is an article stub.
If you are able to help improve this article, please feel free to edit it.