Marketers need to monitor price premiums as early indicators of competitive pricing strategies.
Changes in price premiums can also be signs of product shortages, excess inventories, or other changes in the relationships between supply and demand.
In a survey of nearly 200 senior marketing managers, 54 percent responded that they found the "price premium" metric very useful.
By comparing a brand's price with a market average, managers can gain valuable insight into its strength, especially if they view these findings in the context of volume and market share changes.
[1] Fully 63% of firms report the relative prices of their products to their boards, according to a recent survey conducted in the US, UK, Germany, Japan, and France.