The buyers in the markets owing to the asymmetric information provide extra incentive to sellers for consistent supply of high quality products or services. Undoubtedly, improved quality is at an expense of higher economic cost. The incentive in the form of price differential that truly substantiates the worth or value of improved quality is referred to as price premium. Lately, the application of price premium had been on the rise. Sellers had been charging price premium because of both tangible and intangible benefits offered by them. With the increase in purchasing power of the people, buyers do not mind paying price differential for the products perceived to have differentiating value. The paper is an effort to synthesise various research studies published on price premium from a marketing perspective. The review is selective rather than exhaustive in terms of the topics covered. The review concludes 11 independent factors that influence price premium.
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