What is Prestige Pricing?

Definition: Prestige pricing is a marketing strategy that involves keeping a high price for a product or service to communicate high quality or luxury. It is a technique often employed for high-end products since low prices can be translated into low quality by target consumers.

What Does Prestige Pricing Mean?

Price is an element that works both ways depending on the target market. A low price might be appealing to a corporate buyer or a person with a tight budget but a high price can also be attractive to a person with certain quality demands or a high social status. This is where prestige pricing, also known as premium pricing, comes into play. Companies that target customers with a taste for luxurious products or just looking for those with the highest quality use prestige pricing as a method to transmit those attributes.

In order for this strategy to work, companies must actually have a high quality product to offer or at least one that is perceived as such. If quality perception is low, the strategy will fail. On the other hand, marketing expenses for such products are much more higher than those of regular ones, since there has to be a amplified effort to build the brand’s image to create the premium perception in the consumer’s mind.


All Star Airlines is a commercial airline that flies to many destinations within Europe. Its headquarters are located in London and the company targets top executives and business people since they offer high quality airplanes with less seats than usual ones to provide more seat space to this exclusive type of passengers. The company also promotes an in-flight business networking environment since passengers have shared spaces where they can chat and know each other. Since most of the passengers are experienced businessmen and women this service is very popular among the business community.

A regular flight ticket with All Start Airlines is priced at almost 200% more than one from a regular airline. Nevertheless, executives recognize the airline as a top quality one and they enjoy paying a higher tariff to benefit from the comfort of flying with them. The company uses prestige pricing as one of the methods to keep the service exclusive and the quality perception high enough to attract its target audience effectively.