Forbes India 15th Anniversary Special

Why are products marketed to women sometimes more expensive?

A new study upends popular assumptions about the "pink tax"

Published: Aug 30, 2023 12:34:52 PM IST
Updated: Aug 30, 2023 12:46:53 PM IST

Why are products marketed to women sometimes more expensive?While it’s true that women’s deodorants often cost more than ones targeted to men, the women’s version likely has different ingredients. Image: Shutterstock

Have you ever noticed that the deodorants marketed to women are just a bit pricier than the deodorants “for him”?

The notion that women pay a “pink tax” for products seemingly identical to those marketed to men has led to several new and proposed laws aimed at ending the perceived price discrimination.

But the legislation and outcry assume that so-called men’s and women’s products are, indeed, the same. New research reveals no significant price differences between comparable products aimed at women and men, explains Anna Tuchman, a professor of marketing at the Kellogg School. She coauthored the study with Sarah Moshary at the University of California, Berkeley, and Natasha Bhatia of Cornerstone Research.

“Comparable” is the key word, Tuchman explains. The researchers focused on personal-care products, a category in which gender targeting and segmentation are pervasive. “We find that when firms sell products targeted to men and women, they’re rarely identical products that are sold in different colored packaging,” she says. “The prices charged for products targeted to men and women differ, but it seems to be driven by the fact that the products themselves are different.”

In other words, while it’s true that women’s deodorants often cost more than ones targeted to men, the women’s version likely has different ingredients. (Moisturizers are particularly a common distinguishing characteristic of women’s products, Tuchman says.)

It was a surprising discovery for Tuchman and her coauthors. Given the legislative action and media outcry around the issue, “we thought we were going to find strong evidence” of a pink tax, she says. “But once our results started coming back, it led us to a different conclusion.”

Comparing apples to apples

The researchers started by gathering price information from Nielsen for nine types of personal-care products that are marketed to both women and men: bar soap, body wash, deodorant, hair dye, razor blades, razors, shampoo, and shaving cream. They ultimately amassed three years of data from nearly 40,000 stores across the U.S.

To figure out which products were aimed at women and men, the researchers used several approaches, which included analyzing the manufacturer’s product descriptions and label design. They also chose one store, Walgreens, to see how items were categorized on its website. Then, they used a product-ingredient database to compare the similarity of the offerings.

Delving into the ingredients of each product revealed meaningful differences between what’s sold to men and women. That’s a significant discovery, because proposed federal pink-tax legislation targets “substantially similar” products.

Among the relatively small number of products that were truly comparable, “we don’t find big price differences,” Tuchman says. In some categories, there were slight price differences between men’s and women’s products, but not always to the disadvantage of women. Ultimately, the small differences “wash out across categories.”

In fact, the study found, the average household would save less than 1 percent by switching to comparable products targeted to a different gender. The proposed savings would be larger—close to 10 percent—if households switched to products with different gender targeting that also have different formulations, but it’s not clear consumers actually want to do that. After all, nothing prevents women from buying the cheaper, less-moisturizing blue deodorants today—yet many aren’t.

In other words, Tuchman says, “there’s not a lot of money being left on the table if people truly do prefer the product formulations that they’re choosing.”

Also read: Gender equality still a far cry: report

No pink tax—just a bigger pink basket

Just because there’s no evidence for the tax doesn’t mean women consumers are necessarily in the pink.

For starters, the pink tax studied here is different from the debate over whether feminine hygiene products should be subject to sales tax—also sometimes called a pink tax—which many advocates consider unfair. And a combination of marketing and culture all but demands that women buy a much broader range of personal care products in order to conform to social norms.

“The basket of goods is just larger for women,” Tuchman says. “Within the basket, individual items may have the same price, but it’s a bigger basket.” While some may see that as unfair, it’s a problem that legislation can’t, on its own, easily solve.

Understanding why companies create products with different formulations for men and women is the focus of the researchers’ next paper. Why do so many women’s products contain added moisturizer—because women want it or because marketers have created the expectation?

“I don’t have the answers to those questions yet,” Tuchman says, “but I think it’s super interesting.”

[This article has been republished, with permission, from Kellogg Insight, the faculty research & ideas magazine of Kellogg School of Management at Northwestern University]