well because premium pricing is for luxury products, people will like the fact that they are having a luxury product or service, so will be willing to pay more for it. Say the company were to add some value to it, and really go all out to make it a very good product or service, then the person would be willing to pay more. In this way, the luxurious aspect tot he product will get it more sales for whatever price the company wants. The disadvantage is that competitors (if your product/service does well) will see a desire for your product or service in their market audience, so will either offer that same enterprise for the same price as you but with added value to attract customers, or they will offer the same as you but for a lower, more affordable price, which will also attract your customers AND customers from lower down socio-economic groups that could not have afforded your product or service at the price that you were offering.
Hope this helps :) x
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glen
potato.