Prestige Pricing Tool
Calibrate pricing for luxury goods. Visualize the 'Veblen Effect' where higher prices actually increase demand by signaling status and exclusivity.
Luxury Drivers
Demand Curve (Price vs Desire)
Luxury Assessment
Standard Goods Market
Curve Shape
Your curve slopes down. Standard economics apply.
Recommended Strategy
Focus on value for money and efficiency.
Snob Value
Your intangible brand assets are adding approx 50% to the potential price ceiling.
Execution Steps
Enter your Base Cost (COGS).
Rate your 'Prestige Drivers': Exclusivity, Brand Story, and Aesthetic Quality.
The chart simulates the Veblen Demand Curve.
If your Prestige Score is high, look for the 'Snob Peak' where high price maximizes desirability.
Pro Strategy
- Do NOT use charm pricing (.99) for prestige goods. Use round numbers ($500) or precise numbers ($4850).
- Never discount. Destroy inventory rather than lowering the price to protect the brand value (Burberry strategy).
- The gap between Price and Utility Value is your 'Brand Equity'. You must invest heavily in brand marketing to sustain this gap.
Core Concepts
Veblen Good
A good for which demand increases as the price increases, because of its exclusive nature and appeal as a status symbol.
Signaling Theory
Consumers use price as a shortcut to judge quality. In ambiguous categories (wine, jewelry, consulting), a higher price signals superior quality.
The Snob Effect
The desire to own unique or exclusive products. If everyone can afford it (low price), the snob value drops to zero.
What is Prestige Pricing Tool?
This simulator models the interaction between two demand forces: 'Functional Utility' (which decreases with price) and 'Signaling Utility' (which increases with price). The combination creates the Veblen Curve, which may have an upward slope at higher price points for luxury brands.
Best For
- • Pricing luxury fashion, art, or jewelry.
- • Launching a high-end consulting mastermind.
- • Deciding between a volume strategy vs a margin strategy.
Limitations
- • Theoretical simulation. Real world Veblen curves are hard to measure without live testing.
- • Assumes the market is aware of the high price (visibility is key to status).
Alternative Methods
Van Westendorp
Finds the 'Too Expensive' point (which you might want to exceed for luxury).
Perceived Value
Scoring the attributes that drive prestige.
Industry Applications
See how this methodology generates real revenue uplift in different sectors.
Swiss Watchmaker
Sales dropping at $2,000 price point.
Rebranded and raised price to $8,000.
Supreme Clothing
Selling t-shirts.
Artificial scarcity + High Price + Collabs.
Enterprise Security
Losing deals to Microsoft.
Raised price 3x to match 'Enterprise Grade' expectation.