What makes premium pricing psychological?

Premium pricing is one of the widely used pricing schemes to earn greater profits. It has all to do with setting an image in customers' minds that the product offered at such high rates must have something extraordinary.

Take the example of all the BIG brands around you. Aren't their prices higher? Still, you buy from them? Why? Because it is a common perception that wearing brands is a status symbol. You see, the mind game is involved strongly. Also, the main goal behind premium pricing is to earn high profits.