Premium Badge vs Mainstream Brand

Premium Badge vs Mainstream Brand

by Manish Singh

Is it money well spent?

The trio of Japanese premium brands are well-known in the USA and today, there are many Lexus, Infiniti, and Acura car models on sale. However, many people only really started to take note when Infiniti and Lexus launched in 1989 – while Acura precedes them by a full three years. The Acura Integra hatchback and the Legend luxury sedan and coupe models were the first Acuras on the US market in 1986. They were very favorably received and Acura sold 52,868 cars in the US in 1986.

Having observed Acura’s success, Lexus and Infiniti launched luxury sedans under new premium brand names as well in 1989 – the LS400 and Infiniti Q45 respectively. But the question must be asked why they went to all the trouble if they could just have launched luxury models with their mainstream badges on them as Volkswagen did with the Phaeton. Well, it’s because that doesn’t work; the Phaeton was a superb car but a commercial flop. People don’t want a Honda Plus, they want an Acura. The brand matters, even if it’s the same car underneath.

Most Acuras share their platforms with mainstream Hondas:

  • The Acura ILX compact sedan is based on the 9th-generation Honda Civic
  • The Acura RDX compact crossover is based on the Honda CR-V
  • The Acura MDX mid-size crossover is based on the Honda Pilot
  • The Acura NSX is little more than a rebadged Honda NSX

What Makes A Brand Premium?

One would imagine that, to most people, how much they spend on things is important and that they would rather spend less and save money if they can. But this has been soundly disproven by Starbucks selling coffee at a premium in exchange for little more than a cool room where you can hang out with your laptop. The phenomenon of choosing premium products over generic ones is a result of a conscious recalculation of the concept of “value” in your mind to justify the purchase.

To most of us, the definition of a premium product would be one with one or more of the following characteristics:

  • It is more expensive than a generic product
  • It is of higher quality than a generic product
  • Has a rarity value
  • Any other qualities that are perceived to justify the higher price tag

Why Do We Buy Premium Brands?

The problem with our Acura analogy is that there are mainstream Honda vehicles that offer similar horsepower figures, engine choices, performance, and even luxury and safety features to Acuras, but at a significantly lower price point. Similarly, a Ford Explorer starts at an MSRP of around $33,000 and ends at around $53,000. A Lincoln Aviator, which is based on the Explorer, only starts at around $51,000 and commands as much as $88,000 for the flagship. Do the unique styling, more power, additional features, and premium finishes justify buying one flagship Navigator for the price of two and a half base model Explorers?

Yes, many people would gladly spend the extra, and here are only a few of the reasons:

  • We don’t necessarily act rationally: As mentioned before, we tend to rationalize the reason for buying a premium product despite it offering little additional utility value.
  • The quality argument: Quality is hard to pin down but if it is the soft molding of an Acura’s dashboard or the plush leather on the seats, this will count in favor of quality. If it’s about reliability and dependability, this is often no better – or sometimes worse – than the base article the product is based on. In fact, an Acura RDX’s overall J.D. Power score is 75 and that of the Honda CR-V on which it is based is 81.
  • The image component: People with money buy nice things and if we like to flaunt our ability to buy expensive things without having to say it out loud – by buying premium brands normal people cannot afford. The purchase makes us feel good.
  • Exclusivity: Adding to the previous point, having something that is rarer and more expensive as a result contributes to its unattainability for normal people. It’s the best reward for some people. We are empowered by the ability to purchase exclusivity.


It is fair to say that the extra money you spend on a premium brand cannot be justified rationally. This is borne out by the fact that makers of premium products tend to make more profit on these articles. This is especially true in the case of cars, where a reskin and restyle of a normal brand with plusher finishes inside can command double the price in comparison to the mainstream car it is based on. It might not be worth it in rational terms, but what price can you put on the right badge on the hood and the emotion it evokes that you can afford it? The allure is often simply too hard to resist.

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