Why Women Buy Saturns
Danielle Tomassini, dgt@umich.edu
Issue date: 11/8/04 Section: Women in Business
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The Saturn car company has a "No Hassle, No Haggle" system of selling cars. Most car dealerships operate with a significant markup on the cars, creating a buffer on which purchasers can negotiate. Dealerships have the room to move the price down or throw in options at "no charge." But Saturn operates differently. Their sales prices on cars are set at a fixed amount - cost plus a little something. This price does not have a built-in buffer, allowing customers to leave their negotiating skills at the door. Studies have shown that women may pay as much as $1,353 to avoid negotiating - possibly helping to explain why more than 63% of Saturn customers are women. In another study conducted by the Dohring Company, women are 40% more likely than men to accept the first price a car dealer offers. Unfortunately, this dislike of negotiating goes beyond the dealership and into the boardroom.
According to the U.S. Census statistics, women continue to earn less than their male counterparts, $0.766 for every $1.00 earned by a man. The continued wage gap is not reflective of a difference in talents, skills, education, experience, drive, or responsibilities between men and women in the same position; women even outnumber men in undergraduate and graduate institutions (National Center for Education Statistics), but graduate with only 87% of the same salary a man would receive. This wage gap does not develop in the middle of a woman's career, but is more systematic. From the time a woman accepts a new position, she is paid less than a male counterpart with the same background of skills and experience. Do companies simply not value their female employees? Of course not. But women may be the ones undervaluing themselves.
Women are often more grateful than men to simply receive an offer, leading them to not even bother negotiating their salary. Women's salary expectations are 3% to 32% lower than men's salary expectations for the same position, clearly not realizing their value to the company. If salary expectations are too low and a company offers a low salary but it meets the candidate's less than average expectations, the woman will likely accept this inadequate offer. Accompanied with the belief that they may not be worth an extra $5,000, women also feel 2.5 more apprehension then men when it comes to negotiating. This results in men initiating negotiations 4 times as often as women.
