Why retailers can charge more for products marketed at women

19/01/2016 By James Myring

A recent investigation by The Times suggested that products marketed at women are sometimes more expensive than “equivalent” items marketed at men. The 'pink tax', as the media has defined it, has caused much outcry on social media and even been debated in parliament. So are retailers sexist in their pricing?

Prices are, of course, set by supply and demand.  To fully understand pricing we therefore need to look at the price that people are prepared to pay (the demand).

To get to the bottom of how perceptions of brand value (and therefore the price that people are prepared to pay) can differ by gender we have analysed Brand Margin® data collected over the last three years.

Brand Margin® is an innovative methodology developed by BVA BDRC which investigates consumer perceptions of brand value using a wisdom of crowds approach.  Brand Margin® quantifies the perceived value that a brand name adds to the intrinsic value of a product or service.  

Looking in detail at the luxury sector where branding is absolutely crucial we found that women clearly value the key brands more highly than men.  The Brand Margin®  figures below are the percentage premium that the brand adds on top of the intrinsic product value.

Brand Margin Gender Luxury

However this gender impact was not limited to luxury brands.  A consistent finding across many sectors (not just those that may traditionally be seen as more female oriented) is that women perceive more value in branded products than men.

Brand Margin gender difference

The reasons for this gender divide are likely to be varied, and can be open to debate (we will be reporting more on this shortly).

Whatever the cause, it does highlight that the perceived value of branded products can vary by gender.  Given the crucial role of demand in setting prices it seems very likely that this could have a significant impact on the prices that retailers can charge for products marketed at men compared to those marketed at women.

But, and there is always a but…

Brands do not always charge more for “equivalent” products that are marketed at women.   It sometimes goes the other way…

…A (well groomed, male, very anonymous) colleague of mine reliably informs me that he takes care to “avoid using male hair dyes such as Just For Men as it’s considerably more expensive than many of the female hair dye products that do just as good a job!”

And on a final note, how many men ever get into nightclubs for free?