Market actors often consider higher-priced products as premium segments. Although previous literature has confirmed that product innovation triggers premium segment emergence, and vice versa, it lacks a comprehensive model and identification of the underlying mechanisms. To address this gap, this study employs a cognitive model of technology trajectories and examines an empirical case, the Japanese rice cooker market, using mixed methods. Content analyses of newspaper articles and firms’ press releases show the emergence of a premium segment in the Japanese rice cooker market and a simultaneous change in technology trajectories. Qualitative case analyses subsequently reveal the mechanisms that link premium segment emergence and technology trajectory changes; market actors’ technological frames and interpretation processes mediate the mutual shaping of a premium segment and product innovations. This study provides a comprehensive explanation of the linkage between premium segments and product innovations and helps practitioners develop their innovation strategies.