There is a difference between a luxury brand and a premium brand. The key difference is that a luxury brand, to remain luxurious, must set limits on sales volume. By its nature, it cannot be accessible to everyone. Premium, on the other hand, can still enjoy high sales figures at above-average rates. A brand cannot become Premium simply by claiming to be so; Premium must be justified. Customers will pay a premium because the quality is better, or the materials, or the service, or the process. Luxury is much more about perception and trust, or rather, belief.
Luxury does not compare itself to the competition. Each brand has its own luxury status; it is its own glorious entity. Comparing with competitors places it in competition, while nothing can compete. These brands do not explain why they are desirable; they have no need to define themselves or what makes them special. Luxury is desirable because it is luxury. In this way, price becomes part of the appeal. The higher price that luxury brands command limits availability to the few, thereby only increasing the desire of the many.
When developing a new product or refining a brand, it is important to consider which camp you fall into. Creating a luxury brand is no easy task; it requires creating the perception of luxury alongside developing a quality product. It requires customers to take a leap of faith, which is often only possible when they can see that others have taken the leap before them. Creating or elevating a brand to premium level similarly requires work to create a consistent, reliable, and above-average quality product with a solid reputation for both the product and customer service, along with a clear brand message and synergy across all marketing to create a recognizable, clearly defined brand image. This is more quantifiable and therefore more achievable, but requires well-managed delivery across the entire range to succeed and cannot command the high price tag associated with luxury. But hey, these things are achievable.
