Pink Tax: Gender and Other Price Discrimination Factors

by: Aradhna Krishna

Publication Date: July 25, 2016
Length: 8 pages
Product ID#: 1-430-492

Core Disciplines: Marketing/Sales, Strategy & Management

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Description

Diana Kelly is the brand manager for a company that has a new cream that gives consumers brighter, shinier nails. It will be sold in major retail outlets like Target, Walmart, CVS, and Walgreens. As Kelly conducts research to develop a pricing strategy, she discovers examples of price discrimination for products sold to women. In fact, women’s products were priced higher than men’s 42% of the time. Kelly considers having separate packaging for men and women and price the firm’s product higher for women. Will this help the company maximize profits? Is price discrimination ethical? Students are asked to explore mechanisms for price discrimination and gender-based pricing.

Teaching Objectives

After reading and discussing the material, students should:

  • Explain various mechanisms for consumer segmentation and price discrimination.
  • Contrast cost-plus versus willingness-to-pay pricing.
  • Debate the “pink tax” and gender-based pricing.
  • Discuss ethical issues in pricing.