SUMMARY: Throughout the world, the economic power of women is growing. As education levels are rising, incomes are following. Broadly defined, the global middle class will at least double in the next two decades and much of that growth will be spurred by two-income families as women enter the labor force in greater numbers throughout the less-developed world. While women in the more developed world will continue to find opportunities, developing nations will have the largest impact.

Over the next five years, the Boston Consulting Group (BCG) estimates that the global incomes of women will grow from $13 trillion to $18 trillion. That incremental $5 trillion is nearly twice the growth in GDP expected from China ($4.4 to $6.6 trillion) and India ($1.2 trillion to $1.8 trillion) combined. Globally, women are the biggest emerging market ever seen. Overall, men earn nearly twice as much money as women today, but that gap will shrink as more women enter the labor force and at higher wages than ever before. The vast majority of new income growth over the next ten years will come from women.

In control
According to BCG estimates, women control or substantially influence 65% of the world’s annual consumer spending—about $12 trillion. As today’s younger women enter the labor force at higher rates, they bring with them higher levels of education than any generation of women who have come before them. As they advance in their careers, their share of spending will grow, making women an even more important target for consumer marketers.

Global surveys of women, however, show that women feel vastly underserved by marketers. “Despite the remarkable strides in market power and social position that they have made in the past century, they still appear undervalued in the marketplace and underestimated in the workplace. Few companies have responded to their need for time-saving solutions or for products and services designed specifically for them”, says Michael Silverstein and Kate Sayre in the Harvard Business Review. In many cases, rather than truly listening to their female consumers, marketers have opted for the “make it pink” strategy.

Future income states
The United States provides a good case study for how the growing influence of women will eventually play out across many countries in the developing world in the near future. Almost all income growth in the U.S. over the past 15 or 20 years has come from women—while men have seen flat or even declining incomes. By around 2028, the average woman is projected to earn more than the average man in the U.S. A study reported in the Gotham Gazette shows that in some large markets, younger women are already out-earning younger men.

The average wages of 20-29 year-old women are higher than same age men in New York, Los Angeles, Chicago, Boston, Dallas and Minneapolis. In New York, young women earn 17% more than young men and 20% more in Dallas. In 1970, New York women in their 20s made about $7,000 less per year than men in their 20s. This gap had closed to parity by 2000 and today, young women make $5,000 more on average. As women age and grow in their careers, the overall gap between women and men will continue to shrink.

Career paths
Although there is still much to be done, women have made many other strides in the U.S. For the decade ending 2007, women increased their share of many prominent career positions: lawyers from 25% to 30%, physicians from 22% to 29%, and university faculty from 32% to 39%. Women’s participation in the military during the same period also grew from 12% to 14%. While these shares are far from parity and women are still significantly underrepresented in senior jobs—as the chart below indicates—there is continued progress.

Growth in incomes and career levels in companies is driven at least partly by education and the continuing removal of gender-based barriers to employment. Globally, half of all college students are now women. And in the U.S. and in the European Union, the majority are women (57% in the U.S., 55% in the E.U.).

Fundamental right
Literacy rates for women overall lag those of men across much of the less-developed world by 15–30 points. However, younger women have much higher rates than all women as shown in the chart below. As literacy rates have continued to improve for women across the board, the gap between younger women and younger men is in the single digits across almost all countries. For many developing countries, enrollment at the primary and secondary school levels is nearly equal for girls and boys. The gap at university level is still larger, but should continue to shrink as today’s young children grow older and are better prepared for university when they leave secondary school.

Changes in influence and spending
The battle for equality in the labor force for women is far from over, and a few years of a repressive régime can undo decades of progress, as can be witnessed now in some parts of the less-developed world. However, even small gains in education and incomes can have significant impacts on the marketplace for consumer products. As the incomes of women grow, so does the influence in how families allocate spending. And the services and products that women choose to purchase are substantially different than those purchased by households where the woman has less economic impact.

A number of studies in the more developed world have shown that women’s decision making power within a household varies based on her share of total household earnings, in particular her lifetime earnings. Women are more likely to purchase for the household and for the children, including food, healthcare, clothing, education, and personal care products. In households where men dominate the spending decisions, much higher shares are spent on alcohol, tobacco, and high status consumer goods. As women’s share of assets increases, the share of the family budget spent on alcohol, tobacco, and recreation tends to fall. The table below shows who controls spending for certain categories in the United Kingdom.

Increases in income in a family, whether coming from a man or a woman, tend to help the children, but the benefits are greater when a larger share of the increase comes from women. Children tend to enter school at an earlier age, especially girls. Nutrition improves and access to, and the quality of, healthcare increases. Savings rates also increase. All of this serves to better prepare the next generation, which reinforces economic growth.

In the developing world, Goldman Sachs’ The Power of the Purse: Gender Equality and Middle-Class Spending outlines a number of key categories that will see incremental growth from increases in spending autonomy for women—growth beyond what would be expected just given the size of their income increase. These include food (particularly higher quality and protein intensive foods), healthcare, financial products, education, childcare and consumer durables. As spending grows in these areas, growth in other categories—such as alcohol and tobacco—will be negatively impacted. Marketers who listen to their female consumers and create products that really meet their needs within these key categories will be able to reap substantial rewards.

Sources:

• The Real Emerging Market by Rana Foroohar and Susan H. Greenberg in Newsweek September 12, 2009
• The Female Economy by Michael J. Silverstein and Kate Sayre (Boston Consulting Group) in the Harvard Business Review September 2009
• No Quick Riches for New York’s Twentysomethings by Andrew Beveridge in the Gotham Gazette June 19, 2007
• The Power of the Purse: Gender Equality and Middle-Class Spending by Sandra Lawson and Douglas B. Gilman, The Goldman Sachs Group, Inc., August 5, 2009

Growing trend
While the trend of women working outside the home has been more evident in developed countries, it is also present in developing nations—as is the case with Latin American countries. According to the International Labor Organization (ILO), 53% of Latin American women are linked to the labor market—a proportion which reaches 70% of the women between the ages of 20 and 40 years old. Further, the United Nations Population Fund (UNFPA) estimates that roughly 44 million women joined the labor markets of Latin America and the Caribbean in the last decade.

A Nielsen analysis in Latin America of more than 20,000 households across countries in Brazil, Chile, Colombia and Mexico further support the findings that there is a clear growing trend of women working outside the home. In Chile, for example, the percentage of working women grew from 31% in 2007 to 34% in 2008. In Mexico, the number of working women increased 10% over eight years reaching 35% in 2008. Of the four countries, Columbia has the greatest percentage of working women at 40% and Brazil follows closely at 36.6%.

Education creates opportunities
As women’s education levels increase, so do job opportunities. By the end of the 1990s, the United Nations reported that Latin American women between the ages of 30 and 45 with a formal education at the elementary level had a workforce contribution of 55%. That rate rose to 60% when women had an unfinished high school education, 65% with a high school education and more than 80% with a professional degree.

Nielsen data reinforced these findings—as the socioeconomic level increases, more women are educated and therefore have more opportunities for employment. The chart below shows occupation trends of housewives in Mexico from April 2008 to March 2009.

Lifestyle drives purchasing decisions
The rising purchase power of Latin American women is similar across most of the countries in the region. To better understand how this growing economic trend is impacting shopping behavior, Nielsen conducted an analysis in the Mexican market to compare the growth of shopping volume among households where women work vs. the total population.

The findings show that time-starved households—those balancing both work and home responsibilities—are looking for convenient products that save time and are easy to prepare. Categories that over index among households where women work include soups, ready-to-eat cereals, mayonnaise, flavored water, ready-to-drink beverages and packaged bread. And since women who work outside the home generally have more social interactions, hair treatments/conditioners and deodorants also have a high spending index.

Driven by the lack of time to go shopping at the supermarket, door-to-door sales is growing significantly in households where the woman works—spending is up 2.8% in 2009. Health care and beauty categories are the primary drivers of this growth—women who work have increased spending 15% in 2009 vs. 2008. Household products have also contributed to this growth, increasing 8.9% among working women vs. a spending decline of 20.9% among women who don’t work.

Reaching women
Women who are balancing both home and career are becoming increasingly important in the Latin American markets—those between the ages of 20–40 with higher education levels make up the highest percentage. Key purchase drivers for this segment include:

• Ready-to-eat food categories
• Convenient shopping outlets
• Health care and beauty products

Caroline Winnett, Chief Marketing Officer, NeuroFocus

SUMMARY: Mirror neurons…the X and Y factor…how does the hippocampus matter? For marketers keen on understanding better how to reach and influence female consumers, these are all part of the neuromarketing landscape that leading companies are learning about today. In this article, which expands on a recent New York Times story on how Frito-Lay and one of its ad agencies are partnering with NeuroFocus to sharpen their marketing to the distaff half, CI readers can discover fresh insights into the female brain and how it functions.

‘When women are depressed, they either eat or go shopping. Men invade another country.’

Comedian Elayne Boosler may have stumbled onto a truth about the difference in the sexes, but she didn’t even scratch the surface.

When it comes to the brain—which, if you’re interested in understanding anything at all about human behavior, is where your search begins and ends—the variations between the sexes are many. And they’re not only deeply fascinating, they also have clear implications for marketers.

NeuroFocus specializes in understanding and measuring how the brain responds to literally any stimulus that a person can receive, through any of their five senses, and we have a lot to offer on the subject—especially when it comes to consumer behavior. And the fact is, women buy or influence the purchase of 80% of all consumer goods in the U.S. Everything from riding mowers to consumer electronics to homes.

X and Why
But first let’s start with the basics. Your suspicions are correct: there ARE fundamental differences between the male and female brain. They’re both structural and behavorial, they’re formed at birth, they last throughout life, and they affect many different aspects of our attitudes and behaviors. Some of the most important differences:

• Women’s brains have more distributed functions than men, especially for language and memory. Women’s brains have stronger connections between the two hemispheres.
• Women have a larger hippocampus, a major area of the brain that is involved in memory function. Women rely more heavily on brain areas that contain mirror neurons during empathic interaction. Mirror neurons enable a person to feel what they see another person is feeling.

What are the practical implications of these facts? Women have better memory for detailed information than do men. In terms of evolution, this may be related to female competition: females compete with other females in more subtle ways that may rely more on processing finer details; for example, of social cues. Women have a greater capacity to empathize, enhanced language ability, and stronger emotional memory. Men tend to have superior spatial ability, and the ability to build systems. These hard-wired brain differences are revealed in infancy: female babies make more eye contact with caregivers than baby boys. On the other hand, male infants prefer to look at machines or puzzles.

Emotional rescue
Here is a vital insight for advertisers: NeuroFocus’ research confirms conclusively that women have a markedly higher tendency to attach emotional significance to stimuli than men. What does that mean for marketers looking to reach and persuade female consumers?

NeuroFocus has compiled a series of guidelines to follow if you want your messaging to be as neurologically effective as it can be with the female shopper. They’re important because, as our Chief Science Advisor Dr. Robert Knight, one of the world’s top neuroscientists puts it, ‘the brain makes behavior.’ Our neurological research reveals that women respond significantly more strongly to certain styles of packaging designs, advertising messages, and store layouts. We also know already, from our library of neurological ‘best practices’, that women respond to language and imagery differently than men.

The message for marketers? Get your product design, packaging, pricing, branding, messaging, in-store presentation and more in sync with how the female subconscious mind receives and processes information, and directs behavior, and your chances of marketplace success rise accordingly.

Here is a small sampling of NeuroFocus’ guidelines for marketing to women:

• Be authentic
• Focus on cooperative, reciprocal, collaborative conversations
• Keep messaging exploratory, not flatly declarative
• Provide plenty of information
• Acknowledge that she’s integrating many goals with every shopping experience and purchase

While these guidelines apply to female consumers, they are not always enough to guide marketers to the right decisions. Context and delivery play a huge role in how women respond to advertising and to any type of experience. An authentic, informative, exploratory experience can fall flat in the wrong context. Marketers are getting much better at understanding how the female brain perceives the world, but it is not always obvious exactly how to translate this into marketing messages and materials.

The truth, the whole truth, and nothing but the truth
The power of neurological testing is that the results are factual and scientifically sound. They are not subject to flawed interpretation and variances due to a whole host of corrupting influences such as language, culture, education, ethnicity, and others.

Since consumers’ responses are captured at the earliest stage of cognition, the results are neurologically pure and therefore inherently representative of the true way that consumers perceive and react to brands, marketing, prices, packaging design, the retail environment—the entire spectrum of consumer touchpoints.

The brain is a vastly complex and elaborate series of neural networks, with multiple regions and processes at work at all times (especially true for women). While local brain activity reveals some of what is happening in a consumer’s mind, the entire story can only be understood by measuring all parts of the brain, using extremely sensitive EEG (electroencephalography) equipment. Women use different parts of the brain differently than men do, in ways neuroscience is coming to understand in ever greater depth.

It is not possible to draw out gender differences, much less anything else about how the brain truly functions, with quick and simple methods, although some claim to do so. Your doctor will use only medical grade EEG equipment to assess your child’s brain. This testing includes a system that covers the entire brain, and a highly-trained lab technician to collect and analyze the data. Don’t settle for anything less for your customer—female or male.

If a neuroscience methodology is unacceptable to a clinical neuroscientist, it’s not good enough for understanding your customer. Look for:

• Full brain coverage
• Medical quality equipment
• A dedicated lab and highly-qualified technical staff
• Neuroscientists who publish in peer-reviewed science journals

Nielsen and NeuroFocus have teamed up to better understand the elements of successful consumer engagement using science-based market research innovation together with conventional methods. The combination provides a powerful tool for generating greater returns for the investment dollars.

New York Times article

In Frito-Lay’s case, NeuroFocus was enlisted by the ad agency charged with re-defining calorie-conscious snacks such as Baked Lays and 100-calorie packages to make them appeal to women.  To learn more about NeuroFocus’s work on this campaign, read the New York Times article here.

Nielsen made a strategic investment in NeuroFocus in February 2008.

Households headed by Americans age 65 and older account for 14.4% of all U.S. households.  These households represented 22.3% of vitamins product dollar sales and 20.8% of medications and remedies product dollar sales.

Other categories skewing to households with older people include pain remedies, canned fruit, and coffee, as well as canning/freezing supplies and floral/gardening supplies.

Nielsen’s Marketing Tip:
Retailers targeting households headed by older Americans may want to promote these categories (above) with feature ads, displays, and product assortments. Manufacturers should consider cross-promoting and cross-couponing items in these categories.

Nielsen’s Dollar Volume Index identifies demographic groups that account for above or below average dollar volume purchases for a given product category.

Data for the index was collected via Nielsen’s Homescan consumer panel, a nationally representative sample of U.S. households that provides a stratified, proportionate, non-biased representation of the U.S. population. Homescan panelists scan all of their UPC coded purchases after every shopping trip, allowing Nielsen to capture their complete shopping and buying behavior.

These “power moms” are also 51% more likely than average Web users to provide frequent online advice on clothes and fashion, food and beverage products (39% more likely than average), home decorating (36% more likely than average), and health, dieting and exercise (27% more likely than average).

“We’re seeing women using online avenues like email, online forums, and social networking websites to extend a role they’ve long held as information seekers and relationship builders,” Chuck Schilling, research director, agency and media analytics, Nielsen Online, noted.  “Moms, in particular, look to the Web to connect with other parents for tips and support, and they aren’t afraid of new technologies – this group is nearly 25% more likely than average to author a blog.”

In September, Scholastic.com and BirthdayExpress.com tied as the number one website, ranked by index, among the “power mom” demographic, with a composition index of 366 — more than 3.5 times the average.

General Mills, The Gap, and FamilyFun.com rounded out the top five sites that draw a high concentration of “power moms.”

View the full press release.

Read coverage of Nielsen’s findings in BizReport and Promo magazine.

According to a Nielsen analysis released Tuesday, “hockey moms” — defined as women ages 25 to 54 who live in homes with children and who watched at least six minutes of the most recent Stanley Cup Finals on NBC – were more likely than average moms to watch the first two debates of the 2008 election.

Last Thursday, Sen. Joe Biden and Gov. Sarah Palin’s V.P. debate drew 23.8% of all mothers (ages 25 to 54), while 33% of those women defined as “hockey moms” tuned in.  Overall, “hockey moms” were 38.7% more likely than average moms to have watched the V.P. debate.

In comparison, the first debate between Senators McCain and Obama, on Sept. 26, drew 16.5% of all mothers (25 to 54).  Among those classified as “hockey moms,” however, 21.3% tuned in to the debate, making “hockey moms” 29.1% more likely than average moms to have watched the McCain and Obama’s debate.

Read coverage of Nielsen’s findings in the Boston Herald and Broadcasting & Cable.

In August, videos at JohnMcCain.com attracted more female than male viewers for the first time, Nielsen Online reported Wednesday.

Women accounted for 58% of all unique video viewers on John McCain’s website last month — up from July and June, when they made up 48% and 37% of unique video viewers on the site.

The increase in women video viewers at JohnMcCain.com came during the same month that McCain selected Sarah Palin as his vice presidential running mate.

Barack Obama’s website drew consistently large percentages of women video viewers during the summer months, according to Nielsen. In August, 63% of all unique video viewers on BarackObama.com were women.

Video streams at BarackObama.com increased 155% in August — up from 502,000 streams in July to 1.3 million last month. During the same time period, the number of unique video viewers on Obama’s site increased 173% — from 302,000 in July to 824,000 in August, the month of the Democratic National Convention.

Video viewing at JohnMcCain.com also showed modest increases in August, according to Nielsen. Video streams grew by 16% over the previous month — from one million streams in July to 1.2 million in August. Meanwhile unique video viewers on McCain’s site increased 5% — from 452,000 viewers in July to 475,000 in August.

Most overall online video metrics, including unique video viewers, total video streams, and streams per viewer, were either flat or down slightly from July to August, according to Nielsen. Time spent per person viewing online video increased nearly 8% from July to August.

View the full press release.

Read coverage of Nielsen’s findings in Silicon Alley Insider.

Forbes’ story cited data from Nielsen Mobile showing that men are more likely to surf the mobile Web and watch mobile TV, while women take more photos, send more text and multimedia messages, and download more ringtones than men. 

The story also noted that women, who see their phones as extension of their personalities, are more likely to personalize their phones, while men treat their phones as a tool for keeping up with news and work email.

Learn more about mobile usage gender gaps and read The New York Times’ coverage of Nielsen’s findings.

Beermakers like Coors and Diageo, which owns Guinness, are hoping women, a largely untapped group of potential beer customers, will be drawn to sweeter, lighter new beers they’ve introduced. 

But that strategy alone may not be enough to boost beer sales, Graham Page of Nielsen told the Journal. 

“[Women] don’t consume the volume [of beer] — and that is crucial — that men do,” Page noted.