A very good female friend wrote to me, “Well Dr. Stiving…. Read this article. I am angry! Blog about this one!”
Well OK. Stop whining about pricing.
The Marie Claire article provides many examples where women pay more for items than men: dry-cleaning, bank loans, cars, health insurance, deodorant and even government tariffs. With the exception of government tariffs, each one of these has rational economic explanations. They are not about gender discrimination, they are about economics and free markets.
Although I’m a huge proponent of price segmentation, it is bad for companies to segment based on race, religion, or GENDER alone. Yes, I’ve seen some horrendous examples, but the ones in this article are not examples of discrimination based on gender alone. Let’s take them one at a time.
It costs dry cleaners much less to launder and press a man’s dress shirt than a woman’s. Think about it this way. Most office-working males wear the same style dress shirt (boring). Dry-cleaners see thousands of these a week. They have equipment and processes to service them efficiently. Women, on the other hand, wear many different clothing styles to work. It is not as easy for a dry-cleaner to invest in the processes or gain the expertise for every type of blouse.
Women, here are two things you can do. 1. Start wearing men’s shirts. If they charge you more to launder that shirt, I will line up with you and scream discrimination. 2. Search for a laundromat that charges the same for men’s shirts and women’s blouses. Tell your local cleaner you will only go there if they don’t price discriminate. Please let me know if you find one.
Bank loans and Cars
This has nothing to do with gender, and everything to do with your willingness to negotiate. Some women are very tough negotiators and I’m sure they get better deals than most men. However, on average it appears that men are more willing to haggle for a better price on these items, so they end up with better prices.
I recently bought a new car. The negotiating tactic I used could have been used by anyone, of any gender. After some Internet research I decided what price I wanted that the dealer might accept. I called the local dealer and made them the offer. They said no and made a counter-offer of $500 higher. My reply, “I will accept your price if no other dealers in the area will accept my offer.” He quickly called me back and accepted my offer. It was very simple and had absolutely nothing to do with gender. (Regardless how good the deal was, some women have probably gotten even better deals from this dealer.)
Women, are you willing to negotiate or not? Are you willing to learn to negotiate? This isn’t gender discrimination, it’s segmentation based on who is willing and able to negotiate. Learn to negotiate and you will get a better price, regardless of what other women do.
Insurance companies have more statisticians than WalMart has smiley faces. These guys know the probability of you getting a hangnail on Tuesday if you’re wearing red. If one of them thought they could profitably charge less to women and win more customers, they would do it. This is not collusion between insurance companies to cheat women, it’s statistically driven pricing based on the expected cost to care for you.
On this one I understand how you feel. When I was in my twenties I thought it was UNFAIR that my car insurance rates were higher than for women of the same age. That’s gender discrimination! But of course it’s not. Male teens on average are more reckless drivers than female teens. We cause more insurance claims so insurance companies charge us more.
Insurance companies like to make money and win customers. They price to cover their expected costs with a reasonable profit. If they tried to charged some group, like women, a higher price to make a larger profit, another insurance company would be willing to step up and take the business away at the smaller profit. Competition is what keeps our prices down.
In the article, the woman’s version of deodorant that’s essentially the same as the man’s version sells for 30 cents more. This is a good example of what I teach companies to do. Find segments (in this case women) who are willing to pay more for an item, and then create a special item just for them and charge them more.
I picture a woman standing in front of the deodorant aisle, carefully selecting the best one for her. Then I picture a man, walking up, grabbing one and saying, “this one’s fine”. Which one is more likely to use low price as a major factor in their decision? The man.
Women, you have recourse. Buy the man’s deodorant, after all it’s essentially the same. Complain to the manufacturer, they may lower their prices. Shop around. Maybe on average your deodorant is 30 cents more, but if you continually buy the lower priced ones, manufacturers and retailers will provide you lower priced products. If you are buying one of the most expensive deodorants on the shelf, you’re telling the deodorant companies that you like what they’re doing.
Groceries – a counter example
Although this was not covered in the Marie Claire article, I’ll bet women pay less for groceries than men. As a man, should I complain? In fact, I’ll bet married women pay less than single women. Why? It’s simple, stay at home moms are more likely to clip and use coupons. It’s not discrimination, it’s free market economics.
Nobody wants to gouge women. Nobody can. Companies simply look at how much people are willing to pay for their goods and try to price accordingly. If you want to get your products and services for lower prices, all you have to do is act price sensitive. When you see good, better, best offerings, buy “good”. Learn to negotiate and negotiate for everything. Don’t be picky about gender based versions of items. And like you, if I want better prices at the grocery store, I need to spend some time clipping coupons (not gonna happen).
Feel free to share your thoughts or rants.
Mark Stiving, Ph.D. – Pricing Expert, Speaker, Author
Photo by joeywan
Sign up for the Pricing Perspective to get a monthly recap of these blogs plus more insights on pricing.