Introduction

I am here to discuss about “pink tax” which is the more expensive condition of
the products for women/female by answering the questions relating to pink bicycle
helmet case study.
Should the firm charge $20 more for the pink helmet?
I would like to answer this as “NO”. We should not charge extra 20 dollars for the
same product with the same quality as the color is favorable for female. This gender-
based pricing is an iniquitous form of discrimination. It is also a form of sexual or
gender discrimination and a kind of violation of human rights. It is not fair for the
consumer to pay extra charges because she is a female customer, and she favors baby
colors.
Although gender-based pricing is legal in this case study, it is illegal in certain
countries like US. Gender-based pricing is against the US Public Accommodation Act.
According to the law, it is prohibited to treat people unequally based on, among other
things, sex, sexual orientation, and gender identity. If a violation is found, a fine with
not more than 1000$ penalty can be charged for each violation of Act and another $
10000 can be charged by Human Rights Commission. Therefore, it is better to avoid
gender-based pricing culture in the organization/firm. Furthermore, those kind of laws
can be stated in the near future as the consumers are requesting to state the laws to
punish retailers and manufacturers that charge higher prices for women’s versions of
products when there is no cost-based justification.
This gender-based pricing is not a minor inconvenience. According to the study
conducted by California State, women have to pay approximately 2200$ per year more
than men due to gender-based pricing. So, in the lifetime of a woman, she may have to
pay a gender tax or “pink tax” of tens of thousands of dollars more for the same products
and services as men. Without a pink tax, the firm could get a huge volume of female
customers. Moreover, consumer activists are also publicly shaming brands that charge
higher prices for certain population segments. To maintain the brand image and
reputation, the firm should charge the same price for both sexes for the same product
with the same quality and production cost.
Value-based pricing and gender-based pricing
In this case study, we are dealing about gender-based pricing issue. It is about
charging more for female related products although the product’s quality and features
are the same. Gender-based pricing is not an example of value-based pricing. In value-
based pricing the product may be the same but there are usually some differences in
quality, services or features to support for lower or higher prices. It is also the method of
pricing basing on buyer’s perception of value rather than on the seller’s cost. Value-
based pricing can be said if a high-end product is made with second grade quality and
features for the fair price (meaning lower than the high-end price) to be able to give a
taste of high-end product among customers. It can also be referred as value-based
pricing when more features and better quality are added to a product (like iPhone
generations) to be sold in higher price tags. However, in this case study, there is no
value-added quality/features changes between pink and blue helmet instead there is
only color difference. So, we cannot say that the higher price on the pink helmet makes
sense because it is not an example of value-based pricing. Moreover, we cannot
encourage a consumer to buy a cheaper blue one instead of more expensive pink one
which is her favorite color. Instead of this, we would eventually lose that customer and
her loyalty to the brand if we continue this gender-based pricing.