Hey Women – Quit Whining about Pricing
A very good female friend wrote to me, “Well Dr. Stiving…. Read this article. I am angry! Blog about this one!”
www.marieclaire.com/world-reports/why-do-women-pay-more
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.
Dry Cleaning
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.
Health insurance
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.
Deodorant
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
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There you go, Mark, making sense again. When are you going to stop it!?!?
Just kidding, of course – well done. ;-]
A “shy” friend of mine emailed: “I agree that there isn’t gender pricing. As a matter of fact I’ve helped numerous people purchase cars over the past few years at really good prices. I think if people are going to complain, it should be about Kenny Pricing. I have access to unfair advantage pricing on an ongoing basis, as I always get a better deal than everybody else, just by asking in the right way! It has nothing to do with gender.”
hmmmmm – while I may agree car and bank loans tend to be based on negotiation skills – and groceries are a fixed price thus extra effort may be needed to reduce the over all price – I will argue on dry cleaners and any product geared towards women.
I also believe the issue is larger than just the average cost – verse what women get paid – yes a whole other ball of wax.
As a woman we tend to get the shorter end of the stick in several areas – such as cost for items and yes it may come down to fair exchange marketing (as you so pointed out in the deodorant example), equal fair wages (bull-crap we still get 0.79 on the dollar), equal amounts of home responsibilities, orgasms … need I say more – because I can
However Ladies fear not, the tides are changing – as women are now responsible for this nations GNP and also are predicted to take the role of leadership in many of these companies listed above (Catalyst 2006 – demonstrates how in just a few short years women will hold 59% of the leadership positions in the US). The shoe will be on the other foot. See women can wear men’s deodorant – however will men wear women’s – I think not.
Look at Viagra – just a short while ago managed care paid for it … not anymore.
Are we complaining or increasing awareness- I vote awareness – So buckle up!
Lauran Star
Mark,
I have spent a day thinking about what to say about your blog. I too believe in the free market and pricing according to what the market will pay. However, it is hard not to notice that you are not a female and therefore, may only rationally connect to this topic. As a female business professional who specializes in financial psychology, I can’t help but see gender pricing can be discrimination and is often not recognized as there is a belief that women no longer discriminated against. This feels very similar to how people who are fat or larger in physical size are constantly discriminated against by healthcare companies and the airlines. This is called fattism and along with gender discrimination is one of the last remaining areas where many men (and women) feel it is the individual person’s fault as opposed to beliving that all people no matter what shape, size or gender deserves to be treated well.
Is it my fault that I was born with more medical needs than men because of my physical body? Is it fair that I have to pay out of pocket for a mammogram if something suspicious is found in the initial test (yes, just paid $250 out of pocket to care for my health despite having what I am told is “good health insurance.”) and my husband’s healthcare costs are pretty much covered? Is it fair that when I bring a shirt to the drycleaners that is identical to a man’s shirt except for the buttons being on the opposite side of the shirt that I am charged over double to clean it? I really don’t think so.
Let’s just talk about drycleaners as it is a simple example. I like your argument about how men’s shirts are easier to clean than women’s. However, it is flawed in that many women’s shirts fit into a certain type of shirt. So while we may have 3 variation of shirts that need to dry clean, the sheer numbers of women going to dry clean these shirts makes it possible for these folks to develop systems and processes to laundered each type of female shirt efficiently as well. The only reason this has not happened is drycleaners – I am assuming owned by a majority of men and a male dominated field, know they can make more money on their best customers, women, because they don’t know better.
Yes, women need help negotiating and being aware that what is happening in the auto industry, healthcare industry and dry-cleaning arena is wrong. But just because some women – or even many women are misinformed does not mean that this practice is right and ethical. It just means that once again we are being taken advantage of based on our gender.
Women’s rights is relatively new (only 40 – 50 years old)and I think we just hit upon the new frontier of what needs to change in the world if we are truly going to have equal rights for both sexes.
I look forward to your thoughts and those of others. I also hope the article and your blog raise awareness among women to ask corporation some difficult questions. The main one being, “Why is it that I am your best, most economically powerful customer and you continue to treat me so badly?”
Whenever someone starts an article with the words “women” and “whining” in the same sentence – I get annoyed! I need to clear up a few things.
1. Dry Cleaning
We can do two things. One is start wearing men’s shirts you say? More annoyed. I’m on my way to the dry cleaner now to see if my local dry cleaner has a fair business practice. (Sent Mark the evidence)
2. Bank loans and cars.
I agree with Mark totally. It has nothing to do with gender. I have lost the battle with my husband on the last two Toyota Prius’s because he was so impatient. He just had to drive the car home and would not negotiate. Personally a few years ago, I went and bought a Mini Cooper convertible by myself, and I negotiated a damn good deal. It has nothing to do with gender. And yes, many women are tough negotiators.
3. Health insurance.
I’ve been taken to the cleaners on health insurance because of some “pre existing conditions”. I don’t know if it’s because I’m a woman or not, but they have quoted me prices then when the written quote came in, it was almost 200 percent more. Can’t decide if gender is involved there or it’s just our awful insurance options for the self-employed.
4. Deodorant.
I’m not even getting in this discussion. No, I don’t want to wear men’s deodorant and I buy deodorant that is the same price anyway. Jeeze.
5. Groceries.
Nobody can gouge women. Yes, that is so true. Women like better products, and there are times that even us full time working entrepreneur business women want to get a good deal and will bring in a coupon. I hate to buy at CVS if I haven’t gotten a coupon back, and that goes the same for groceries. With men in my experience, that is not going to happen. I look at it as a respect for money.
I appreciate that you heightened my awareness again to this subject—but don’t ever say that women are whiners.
@Lauran Star
Lauran, I love the concept of increasing awareness. Companies only do what is in their best interest. If more women shop as a block, making it more lucrative to serve them, then companies will.
Also, increasing awareness may motivate women to learn to negotiate (or care).
I’m all for people, including women, doing what is in their own best interest.
btw, I’m reluctant to admit I didn’t understand the orgasm comment, but it did grab my attention.
@Kathleen Burns Kingsbury
Kathleen, thank you for such thoughtful comments. You make two points I’d like to discuss. “Is it my fault that I was born with more medical needs than men because of my physical body?” No, it isn’t your fault. But it isn’t mine either. Is it my fault I’m not 6’11″ and can’t play in the NBA? Is it my fault I wasn’t born to rich parents? From my perspective we are all given positives and negatives and we must do the best we can with what we have.
The second point was about dry cleaners. If the costs to launder a blouse are the same as the costs to launder a shirt, then a smart dry cleaner will make it very inexpensive to clean and press blouses. Then they can slightly raise prices on everything else. If it’s the only dry cleaner that does this, all the women in the area will flock there, massively increasing his business. His profits will skyrocket. The fact that we don’t see a single dry cleaner do this gives me confidence that it really is more expensive to launder a blouse. (Maybe we will find out why some day soon.)
One thing I know about men, businessmen in particular, we will do almost anything to make more money, even if it means charging fair prices to women.
Finally, what do you think of male teens paying more for car insurance? Fair?
@Wendy Hanson
Wendy, and all women.
I’m sorry I called you whiners. Most women are not whiners and I believe men probably whine more than women.
However, had I not used such a controversial word we probably wouldn’t be having these wonderful conversations. Feel free to keep me in line. I’ll do my best to remain respectful.
Kathleen and Wendy, way to thoughtfully weigh in. Mark, thanks for raising our attention to pricing issues. I’m going to do some local research about women and wine prices… Wine is much more appealing to me than “whine”.
Mark,
I appreciate your comment. In fact,-I am enjoying this so much that I have put out a “Dry Cleaning Challenge” on Facebook/WendyHansonConnects and I hope your readers will collect more data.
Yes—men can whine more than women. Notice, I don’t generalize.
Thanks for the good-natured controversy.
Mark,
I guess you misunderstood my comment about healthcare. Something is wrong when women pay so much more than men to stay healthy. I think morally we just need support women’s health as well as men’s health. And the healthcare industry is so messed up re: many areas that it is hard to distinguish which are practices that discriminate against women and which just discriminate against any patient who happens to have the misfortune of being sick.
Love Wendy’s Challenge and maybe she can find out the real truth. I would love a drycleaner to become female friendly and charge an equal amount for men and women’s blouses. If men need to pay more so be it. You make more on average than women per hour so you can afford it. I have a great relationship with my drycleaning and will chat with him next time I am in. And if women flocked to his business I would be happy for him and for his clients. BTW most women are bringing the men’s stuff in too!
Re: male teens being charged more. Right or wrong, I don’t think too much about it. Probaby because I am not a guy and I am not a mother of teen and it does not impact my life directly. Maybe too honest but I think it makes the point, that you like a lot of men, can’t connect to all the ways in which we pay more just to live our lives and get paid less to do the same work.
Nice blog btw!
Ok … Did the Wendy Challanger yesterday … Yup I pay more then men…. Not shocking …. And 90% of there customers are women … even if the difference is where the buttons are … Here’s the kicker – there response … It is what the market demands-as far as pricing. Hmmmm well the market demands I go else where – and did
Thanks Mark for the blog
Absolutely Excellent!
You explained so clearly how price segmentation was applied on each situation that I’m surprised.
Good Job. Thanks for the great Article.