Prestige pricing, also called premium pricing or image pricing, is a strategy where products are priced significantly higher than competitors to create a perception of superior quality, exclusivity, or luxury. Unlike cost-based pricing, prestige pricing is driven by brand positioning and target customer aspirations.
This strategy works because consumers often use price as a quality indicator—especially when they cannot easily evaluate product quality before purchase. A $200 face cream is assumed to be more effective than a $20 alternative, even when ingredients may be similar. The high price becomes part of the product's value proposition.
Prestige pricing requires consistent brand execution across all touchpoints. Brands employing this strategy typically avoid discounting, maintain selective distribution, invest in premium packaging and marketing, and carefully control brand imagery. Frequent sales or discount codes can undermine prestige positioning by training customers to wait for deals.