Women and Marketing
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Nearly 80% of all purchasing decisions are made by women. Women make the
choice of which holiday 92% of the time, which bank account 89% of the time, in
DIY 80%. Even the purchase of the family car is decided solely or mainly by
women in 60% of cases. Women's wealth continues to grow. Between 1970 and 1998
men's median income rose by 0.6 percent whilst women's rose by 63%.
The importance of developing products and services that meet women's needs
cannot be overstated. When buying financial products and services, wealthy women
have certain needs and concerns which are different to those of men.
Understanding why and how women create wealth, where they invest and why is
critical to those who wish to sell financial service products to this
potentially huge and poorly catered for group.
In 1998 the average male millionaire in the UK was worth £2.7 m (US$5.42m),
while the average female millionaire owned just £1.28 m (US$2.56m). By 2006,
women had caught up considerably, with the average female millionaire worth
£1.97 (US$3.94m) compared with £2.96 m (US$5.92m) for men.
The increase in female wealth has not been limited to developed countries. In
2006, the female paper tycoon Zhang Yin was listed by the Hunan Report as the
wealthiest person in China with an estimated US$3.4 bn.
So how are women creating this wealth? The traditional sources of wealth for
women have been inheritance from their parents or their deceased husbands or
financial gain from the divorce of a wealthy husband. Whilst these methods for
achieving wealth are still evident, an increasing number of women have created
their wealth through their job or through the ownership of a business.
Whilst men's major motivation for starting a business is financial gain,
women tend to cite flexibility, freedom (from corporate structures and politics)
and financial gain as the main reasons for setting up on their own. Holly
Sargent, Senior Associate Dean for Advancement and Senior Director for
University Women's Studies at Harvard University points out that when women
start a business it often does not have the sole purpose of generating wealth.
"The businesses are more likely to be family orientated, less commercial and
more socially or more 'gap in the market based'....A lot of innovative products
are created around female-oriented gaps in the market."
Income from investments has become an important source of wealth for wealthy
women. Up to 38% high net worth women in Asia cited income from investments as
one of their three most important sources of wealth. In Europe, this was lower
at 24% with 64.6% stating income from their job as one of the three most
important sources of income. Independent of their husband or family, women are
creating their own wealth through investments, ownership of a business or
through a well paid job.
Motivations for amassing and protecting wealth are almost identical for men
and women. Financial security in retirement is seen as the main priority
followed by a better personal lifestyle and enjoyment of the finer things in
life. In other words the goals appear to be neatly divided between spending on
the present and saving for the future. More intangible factors such as status
and the sheer enjoyment of making money, come much further down the list.
Women want wealth to enjoy a better lifestyle. They spend their leisure time
and disposable income on holidays and home improvements, just like men. The only
significant difference in spending is that men are likely to spend a greater
proportion of their disposable income on cars and gadgets whilst women focus on
clothes, jewellery and watches ' so far the cliché holds true.
However, women do invest quite differently to men. Women are far less likely
to take risks with their money, whether in their personal finance or business
affairs. Research suggests that more men than women invest in financial products
that are considered to be at the riskier end of the financial spectrum such as
hedge funds, private equity, structured products and derivates.
Women take longer to come to a decision about what to invest in and are less
likely to go to a third party for advice than men. Men are more likely to
consult tax specialists, accountants, private banks, brokers and the media. The
only source of advice that is more widely used by women than men is the high
This does not mean they are less successful or able investors than men. In
Tom Peters book ReImagine! he quotes the National Association of Investors on
the returns of investment clubs. Whilst men only clubs delivered 15.6 percent,
women only clubs delivered 17 percent returns.9 percent.
Wealthy men are more likely to use personal trainers, chauffeurs, chefs,
alternative health practitioners, property search agencies, lawyers and private
banks than women. However, wealthy women are more likely to use what may be
considered 'lifestyle' services such as personal concierge and shopping
services, life coaches, personal stylists, bodyguards and private doctors.
Women tend to invest to reach a particular goal, for instance, a college
fund, retirement, a major holiday. Once the investment goal has been reached,
women are more likely to 'protect' the fund rather than put it at risk through
So what are the conclusions that can be drawn about marketing financial
products and services to high net worth women:
1. Whilst products do not have to be marketed as a 'women only' product, they
do need to provide clear, comprehensive information from which the individual
can make an informed choice. As many of the women will be making investment
choices without the benefit of advice from independent advisors or tax
specialists, everything produced must be jargon free and in plain English.
Provide well researched information and help via an on line help desk or
2. Build a relationship through education. Educate women about financial
matters that may concern them depending on their age or lifestyle.
3. Develop products 'themed' around issues such as 'wedding', 'college fund',
'retirement' Encourage continuing investment in multiple closed end funds
4. Women do hire personal trainers and are prepared to pay for the personal
touch. A 'financial coach' may be the incentive a woman needs to invest in a
particular product or organisation.
Copyright (c) 2007 Chiswick Consulting Limited
About the Author
Pam Kennett and Crispin White are Founders of Chiswick Consulting Limited.
Together they have over 50 years of experience working with FTSE 100 companies
and leading strategy firms. Contact them at
firstname.lastname@example.org or visit
http://www.chiswickconsulting.com for more information.
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