The premium business model is the concept of offering high end products and services appealing to discriminating consumers. Brand image is an important factor in the premium business model, as quality is often a subjective matter. This business model seeks a higher
profit margin
Profit margin is a measure of profitability. It is calculated by finding the profit as a percentage of the revenue.
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There are 3 types of profit margins: gross profit margin, operating profit margin and net profit margin.
* Gross Pro ...
on a lower sales volume.
Examples of this model include
Rolls-Royce
Rolls-Royce (always hyphenated) may refer to:
* Rolls-Royce Limited, a British manufacturer of cars and later aero engines, founded in 1906, now defunct
Automobiles
* Rolls-Royce Motor Cars, the current car manufacturing company incorporated in ...
,
BMW and
Mercedes-Benz
Mercedes-Benz (), commonly referred to as Mercedes and sometimes as Benz, is a German luxury and commercial vehicle automotive brand established in 1926. Mercedes-Benz AG (a Mercedes-Benz Group subsidiary established in 2019) is headquartere ...
in the auto industry,
Gucci
Gucci (, ; ) is an Italian high-end luxury fashion house based in Florence, Italy. Its product lines include handbags, ready-to-wear, footwear, accessories, and home decoration; and it licenses its name and branding to Coty, Inc. for fragran ...
bags and
Rolex
Rolex SA () is a British-founded Swiss watch designer and manufacturer based in Geneva, Switzerland. Founded in 1905 as ''Wilsdorf and Davis'' by Hans Wilsdorf and Alfred Davis in London, the company registered ''Rolex'' as the brand name of ...
watches in the luxury accessories industry, and elite personal services such as using a
chauffeur.
Business models
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