case W04C92
July 25, 2016
Aradhna Krishna
Pink Tax: Gender and Other Price Discrimination Factors
Diana Kelly, who received her MBA from a top-tier school in 2009, had recently been promoted to brand
manager at a consumer goods firm selling foot care products. She was currently in charge of a new product
launch of a nail brightening cream that helped create brighter, shinier nails. The product would be available
in all leading stores in the USA (e.g., Target, Walmart, CVS, and Walgreens). As of early 2016, no comparable
products existed in the market. Nonetheless, the product had to be launched soon to capitalize on the
seasonality of the category, because more foot care products were sold in late spring and summer than the
rest of the year put together.
Based on market research, Kelly was convinced that there was a true need for the product, and that the
launch would generate a lot of consumer excitement as well as invigorate the foot care category, which was
generally perceived as boring. The concept tests showed that the product would increase consumer traffic to
the foot care aisle, and Kelly was sure that this would be a very strong reason for distributors to carry the
product without high slotting fees.
Kelly was, however, stuck on the topic of pricing: How should her company price the product?
Pricing Variations Among Similar Products
While she was conducting her research, Kelly came across many differing instances of price variation.
Browsing a variety of products in drugstores as well as online, she found that the price of even the same
product could vary. In one case, the same pain medicine – with the same active ingredients, and in the same
exact quantity, but with different packaging and symptom associations – had different pricing (see Exhibit
1). Excedrin Extra Strength had 250 mg each of acetaminophen and aspirin and 60 mg of caffeine, as did
Excedrin Migraine. But, from the same retailer, 24 caplets of Excedrin Extra Strength were priced at $6.26,
whereas 24 caplets of Excedrin Migraine were priced at $8.95.
Likewise, the same pregnancy test kit was sold at different prices with different packaging (see Exhibit
2). Both kits were made by Quidel Corporation. One kit, called RapidVue, was priced at $6.99 and was sold in
Published by WDI Publishing, a division of the William Davidson Institute (WDI) at the University of Michigan.
©2016 Aradhna Krishna. This case was developed by Aradhna Krishna (Dwight F. Benton Professor of Marketing) at the University of
Michigan’s Ross School of Business, with assistance from graduate student Preetha Lakshmi Narayanan. This case was designed for
academic purposes to simulate a scenario that could occur in the business world and does not portray an actual company, protagonist,
or event.
This document is authorized for use only in Steven SEGGIE's _Marketing Management_ at ESSEC Business School from Feb 2023 to Mar 2023.
Pink Tax: Gender and Other Price Discrimination Factors
W04C92
the same store area as pregnancy prevention products (e.g., condoms). The other kit, babystart, was priced
at $9.99, and sold with other pregnancy enhancing products (e.g., ovulation kits).
In Australia, Kelly had seen two different flavors of the same cough drop being sold at different prices
within one store: A peppermint cough drop manufactured in India was $2.85 for 20 drops (14.25 cents each)
while and a burst-of-mint cough drop manufactured in Germany was $3.95 for 22 drops (17.95 cents each).
That this occurred in Australia showed that price discrimination was not limited to the United States. She
knew that prices for the same products could be very different in-store versus online because of lower costs
online. She wondered if similar differences in the cost of ingredients, packaging, and even transportation
could account for these within-store price disparities.
Gender-based Price Differences
Her curiosity aroused now, Kelly started looking for other factors associated with price differences. Her
search yielded an unexpected result. She found that many products targeted toward female consumers were
priced higher than the same products targeted toward male consumers or gender-neutral. She could not think
of any good reason why a pink stool softener would cost 15% more than its blue counterpart (Exhibit 3a),
or why pink earplugs would be priced higher than blue ones (Exhibit 3b).
Further research on gender-based price differences led Kelly to a study by the New York City Department
of Consumer Affairs, From Cradle to Cane. The report found overwhelming evidence for what it termed a “pink
tax” – female consumers were paying a higher price for comparable products throughout all their life stages
(e.g., childhood, teen, young adult, adult, middle age, elderly) compared to their male counterparts. (A
summary and examples from the study can be found in Exhibit 4.)
The study compared 794 individual products (across more than 90 brands) that had clear male and female
versions. The agency sampled female and male products that had a similar composition. The researchers
determined that, across the sampling, women’s products were priced higher than men’s 42% of the time
while men’s products were priced higher 18% of the time; and the products were equally priced 40% of the
time. Overall, across the 794 products, women paid 7% more than men.
The price difference varied depending on the product category. For example, personal care products
targeting women were priced 13% more than personal care products for men; toys and accessories aimed
at women were priced 7% more than those for men; and clothing for girls cost 4% more than clothing for
boys. In particular, girls’ shirts were 13% higher than boys’ shirts (a difference of $1.87). Extraordinarily,
a pink Radio Flyer scooter was priced at $49.99 whereas a red one was $24.99 (a difference of $25 and
approximately 100%). Note, of course, that both boys and girls were free to choose blue, red, or pink toys,
but they lacked a similar choice opportunity involving clothing; shirts, for example, button on different sides
depending on gender.
Adult clothing in the study showed a price difference of 8%, with (for example) Levis 501s being priced
at $68 for men and $88 for women; personal care products had a price difference of 13%, with Schick
razor cartridges being $14.99 for men and $18.49 for women; and home health care products had an 8%
difference, with even personal urinals (a 21% difference) and rib supports ($22.47 for men and $26.99 for
women) priced differently by gender.
People were noticing the disparities, Kelly learned. She saw a CNN Money report on February 3, 2016,
that said: “Women around the world are up in arms about the issue, accusing retailers of ‘sexist pricing.’
2
This document is authorized for use only in Steven SEGGIE's _Marketing Management_ at ESSEC Business School from Feb 2023 to Mar 2023.
Pink Tax: Gender and Other Price Discrimination Factors
W04C92
British pharmacy chain Boots was forced to cut prices of some items this week after an online campaign
called on the company to stop the unfair pricing. … The protests are gathering momentum. Gender-based
pricing was debated in the British parliament on Tuesday, with one MP calling the practice ‘exploitation.’
‘Women are paid less and are expected to spend more on products and services ... they are charged more
simply for being women,’ Paula Sherriff, a Labor Party MP, said during the debate.”
Potential Paths to Pricing the Nail Brightening Cream
Kelly wondered if her new product should be priced by gender. After all, she mused, while both men
and women would like brighter nails, perhaps women would want them more. Should her company charge
a higher price to women? She looked at her product’s simplified cost structure. The product material (male
or female) cost 84 cents per unit. To create gender-specific packaging, the color schemes and packaging
materials could be obtained most cheaply from different sources. The female-centric packaging material
could be sourced most cheaply from Mexico while the male-centric packaging material could be sourced most
cheaply from Spain. The cost of the female-centric packaging material was $0.21 per unit in Mexico, and it
cost another $0.13 to ship to the USA; the cost of the male-centric packaging material was $0.24 per unit
in Spain, and it cost another $0.11 to ship to the USA.
Kelly looked at her laptop screen, contemplating how to price the nail brightening cream. Would price
discrimination work for her product? What lines of reasoning would support price discrimination? Would it
help her company maximize profits? Were there other factors she had to consider? Was price discrimination
ethical?
3
This document is authorized for use only in Steven SEGGIE's _Marketing Management_ at ESSEC Business School from Feb 2023 to Mar 2023.
Pink Tax: Gender and Other Price Discrimination Factors
W04C92
Exhibit 1
Pain Medicine
Sources: Accessed 14 June 2016. <https://www.amazon.com/Excedrin-Strength-Reliever-Caplets-caplets/dp/B00F2ZPEZY/
ref=sr_1_1_a_it?ie=UTF8&qid=1465958692&sr=8-1&keywords=excedrin+extra+strength+24>;
<https://www.amazon.com/Excedrin-Migraine-Contains-Acetaminophen-Caffeine/dp/B01CAXJE6U/ref=sr_1_7_a_
it?ie=UTF8&qid=1465958648&sr=8-7&keywords=excedrin+migraine+24>.
4
This document is authorized for use only in Steven SEGGIE's _Marketing Management_ at ESSEC Business School from Feb 2023 to Mar 2023.
Pink Tax: Gender and Other Price Discrimination Factors
W04C92
Exhibit 2
Pregnancy Test Kits from Quidel
Exhibit 2a: $6.99; shelved near condoms
Exhibit 2b: $9.99; shelved near ovulation kits
Source: Dawar, Niraj. “Expect the Unexpected.” Nothing But Marketing blog. 22 May 2011. Accessed 16 June 2016. <http://
nothingbutmarketing.blogspot.com/2011/05/expect-unexpected.html>.
5
This document is authorized for use only in Steven SEGGIE's _Marketing Management_ at ESSEC Business School from Feb 2023 to Mar 2023.
Pink Tax: Gender and Other Price Discrimination Factors
W04C92
Exhibit 3
Gender-Based Discriminatory Pricing
Exhibit 3a: Stool Softener
Sources: Accessed 16 June 2016. <http://www.cvs.com/shop/health-medicine/digestive-health/fiber-laxatives/dulcoease-pink-stool-softener-softgels-prodid927369?skuId=927369>;
<http://www.cvs.com/shop/health-medicine/digestive-health/fiber-laxatives/dulcolax-stool-softener-prodid-1011850>.
6
This document is authorized for use only in Steven SEGGIE's _Marketing Management_ at ESSEC Business School from Feb 2023 to Mar 2023.
Pink Tax: Gender and Other Price Discrimination Factors
W04C92
Exhibit 3b: Ear Plugs
Source: Photographs of products in a CVS store at 483 Route 79, Morganville, NJ 07751, at 2 p.m. on 16 June 2016.
7
This document is authorized for use only in Steven SEGGIE's _Marketing Management_ at ESSEC Business School from Feb 2023 to Mar 2023.
Pink Tax: Gender and Other Price Discrimination Factors
W04C92
Exhibit 4
Summary of From Cradle to Cane
The study From Cradle to Cane: The Cost of Being a Female Consumer was conducted by the Department
of Consumer Affairs, New York City, in December 2015.
The full report may be found at:
<http://www1.nyc.gov/assets/dca/downloads/pdf/partners/Study-of-Gender-Pricing-in-NYC.pdf>. (In
the examples below, some new images of products have been added.)
Executive Summary
•
Comparison of nearly 800 products with clear male and female
versions but close in branding, ingredients, and appearance
•
Over 90 brands – both online and in-store
•
Women’s products cost an average of 7% more than men’s, including:
−−
Toys and accessories
7%
−−
Children’s clothing
4%
−−
Adults’ clothing
8%
−−
Personal care products
13%
−−
Senior/home health care
8%
8
This document is authorized for use only in Steven SEGGIE's _Marketing Management_ at ESSEC Business School from Feb 2023 to Mar 2023.
Pink Tax: Gender and Other Price Discrimination Factors
W04C92
Detailed Industry Findings
Toys and Accessories
Number of
Products
Girls’
Average
Boys’
Average
Price
Difference
Percent
Difference
Bikes and scooters
22
$86.72
$81.90
$4.82
6%
General toys
20
$29.49
$26.49
$3.00
11%
Backpacks
20
$25.99
$25.79
$0.20
0.8%
Preschool toys
14
$21.65
$19.85
$1.80
9%
Helmets and pads
20
$25.79
$22.89
$2.90
13%
Arts and crafts
10
$32.79
$30.59
$2.20
7%
106
$222.43
$207.51
$14.92
7%
Products
Total
Source: New York City Department of Consumer Affairs. From Cradle to Cane: The Cost of Being a Female Consumer. December 2015.<http://www1.nyc.gov/assets/dca/downloads/
pdf/partners/Study-of-Gender-Pricing-in-NYC.pdf>.
9
This document is authorized for use only in Steven SEGGIE's _Marketing Management_ at ESSEC Business School from Feb 2023 to Mar 2023.
Pink Tax: Gender and Other Price Discrimination Factors
W04C92
Detailed Industry Findings
Children’s Clothing
Products
Number of
Products
Girls’
Average
Boys’
Average
Price
Difference
Percent
Difference
Children’s shirts
20
$15.82
$13.95
$1.87
13%
Children’s jeans
20
$24.63
$22.83
$1.80
8%
Baby pants
20
$18.33
$16.77
$1.56
9%
Onesies
20
$20.91
$20.07
$0.84
4%
Baby sweaters
20
$24.87
$23.39
$1.48
6%
Baby shirts
20
$12.58
$12.38
$0.20
2%
Baby shoes
20
$20.69
$20.07
$0.62
3%
Children’s underwear
20
$17.67
$18.17
($0.50)
3%
8
$28.85
$29.60
($0.75)
3%
168
$184.35
$177.23
$7.12
4%
Toddler shoes
Total
Sources: Accessed 16 June 2016. <http://www.childrensplace.com/shop/us/p/Girls-Short-Sleeve-Basic-Polo-2062771-6B>; <http://www.childrensplace.com/shop/us/p/BoysUniform-Short-Sleeve-Pique-Polo-2062131-1027>..
10
This document is authorized for use only in Steven SEGGIE's _Marketing Management_ at ESSEC Business School from Feb 2023 to Mar 2023.
Pink Tax: Gender and Other Price Discrimination Factors
W04C92
Detailed Industry Findings
Adults’ Clothing
Products
Number of
Products
Women’s
Average
Men’s
Average
Price
Difference
Percent
Difference
Dress pants
40
$75.66
$71.71
$3.95
6%
Dress shirts
40
$58.11
$51.46
$6.65
13%
Sweaters
42
$63.19
$59.45
$3.74
6%
Jeans
50
$62.75
$57.09
$5.66
10%
Shirts
40
$29.23
$25.51
$3.72
15%
Socks
40
$9.98
$9.73
$0.25
3%
Underwear
Total
40
$8.46
$10.90
($2.44)
29%
292
$307.38
$285.85
$21.53
8%
Source: New York City Department of Consumer Affairs. From Cradle to Cane: The Cost of Being a Female Consumer. December 2015.<http://www1.nyc.gov/assets/dca/downloads/
pdf/partners/Study-of-Gender-Pricing-in-NYC.pdf>.
11
This document is authorized for use only in Steven SEGGIE's _Marketing Management_ at ESSEC Business School from Feb 2023 to Mar 2023.
Pink Tax: Gender and Other Price Discrimination Factors
W04C92
Detailed Industry Findings
Personal Care Products
Products
Number of
Products
Women’s
Average
Men’s
Average
Price
Difference
Percent
Difference
Shampoo and conditioner
(hair care)
16
$8.39
$5.68
$2.71
48%
Razor cartridges
18
$17.30
$15.61
$1.69
11%
Razors
20
$8.90
$7.99
$0.91
11%
Lotion
10
$8.25
$7.43
$0.82
11%
Deodorant
20
$4.91
$4.75
$0.16
3%
Body wash
18
$5.70
$5.40
$0.30
6%
Shaving cream
20
$3.73
$3.89
($0.16)
4%
Total
122
$57.18
$50.75
$6.43
13%
Source: New York City Department of Consumer Affairs. From Cradle to Cane: The Cost of Being a Female Consumer. December 2015. <http://www1.nyc.gov/assets/dca/downloads/
pdf/partners/Study-of-Gender-Pricing-in-NYC.pdf>.
12
This document is authorized for use only in Steven SEGGIE's _Marketing Management_ at ESSEC Business School from Feb 2023 to Mar 2023.
Pink Tax: Gender and Other Price Discrimination Factors
W04C92
Detailed Industry Findings
Senior/Home Health Care Products
Products
Supports and braces
Canes
Number of
Products
Women’s
Average
Men’s
Average
Price
Difference
Percent
Difference
22
$37.17
$32.43
$4.74
15%
6
$21.99
$19.66
$2.33
12%
Compression socks
24
$27.86
$26.77
$1.09
4%
Adult diapers
22
$32.71
$32.06
$0.65
2%
Personal urinals
12
$11.32
$9.32
$2.00
21%
Digestive health
20
$9.41
$9.84
($0.43)
5%
106
$140.46
$130.08
$10.38
8%
Total
Sources: Accessed 16 June 2016. <http://www.walgreens.com/store/c/ita-med-rib-support-for-women-white/ID=prod6127922-product>; <http://www.walgreens.com/store/c/
ita-med-rib-support-for-men-white/ID=prod6127914-product>.
13
This document is authorized for use only in Steven SEGGIE's _Marketing Management_ at ESSEC Business School from Feb 2023 to Mar 2023.
Pink Tax: Gender and Other Price Discrimination Factors
W04C92
Notes
14
This document is authorized for use only in Steven SEGGIE's _Marketing Management_ at ESSEC Business School from Feb 2023 to Mar 2023.
Pink Tax: Gender and Other Price Discrimination Factors
W04C92
Notes
15
This document is authorized for use only in Steven SEGGIE's _Marketing Management_ at ESSEC Business School from Feb 2023 to Mar 2023.
Established at the University of Michigan in 1992, the William Davidson Institute
(WDI) is an independent, non-profit research and educational organization focused on
providing private-sector solutions in emerging markets. Through a unique structure
that integrates research, field-based collaborations, education/training, publishing,
and University of Michigan student opportunities, WDI creates long-term value for
academic institutions, partner organizations, and donor agencies active in emerging
markets. WDI also provides a forum for academics, policy makers, business leaders, and
development experts to enhance their understanding of these economies. WDI is one
of the few institutions of higher learning in the United States that is fully dedicated to
understanding, testing, and implementing actionable, private-sector business models
addressing the challenges and opportunities in emerging markets.
This document is authorized for use only in Steven SEGGIE's _Marketing Management_ at ESSEC Business School from Feb 2023 to Mar 2023.