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Louise Ripley



Marketing for Competitive Advantage
Steven M. Kates, MBA, CA, PhD
Twenty Million New Customers! Understanding Gay Men's Consumer Behavior
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Pre-publication Reviews, Commentaries, Evaluations

"Kates has produced a well-written, thoughtful, and provocative book based on careful qualitative research involving personal interviews, sensitive and sensible interpretations of data, and critical evaluation. People living in or simply interested in understanding mixed market economies with increasingly segmented markets and niche marketing will find his discussion of the social, psychological, and economic utility of gay and lesbian consumer behavior full of worthwhile observations and insights. Future researchers in this area will have to take account of this work." 
Alex C. Michalos, FRSC
Professor and Chair of Political Science program, University of Northern British Columbia  

"One of the most exciting and provocative works to come out of the business area in a long time. Steven Kates uses qualitative research in the established tradition of Belk and McCracken to explore issues of relevance to the consumer behavior of the gay community. Each informant’s portrait is skillfully crafted, and by the end of the book, which reads almost like a novel, you feel you know these guys as personal friends. This book will make a crucial contribution to the stream of literature in Gender in Consumer Behavior, as well as providing compelling reading material for anyone interested in today’s important issues."  
M Louise Ripley, MBA, PhD, Associate Professor, York University, Ontario, Canada

Chapter 8  
Managerial Implications of the Study

(reprinted with permission of the author)

There is the potential for various entrepreneurial individuals and organizations, using some of the findings of this report, to make a whole lotta money. Given the results of this study, I believe that the important issue is not so much whether an organization will profit from targeting the gay men's market segment (if they target it intelligently, they can reasonably expect to do well, given some of the previous marketing research studies), but rather how to do it ethically and responsibly; this observation is further substantiated by recent market research by the Yankelovich study (Lukenbill 1995). Frankly, some of the informants here are "fruits just ripe for the picking."

Thus, the following discussion will be premised upon the practice of relationship marketing. That is, I am assuming that the best approach to targeting the gay and lesbian communities is to cultivate long-term, mutually beneficial, commercial relationships with gay consumers. These relationships should be built upon trust, fairness, and an understanding of the special issues, conditions, and problems which gays and lesbians experience. I am further assuming that businesses interested in the gay and lesbian communities are not, for the most part, interested in "the quick buck." Rather, marketers must recognize that many gay and lesbian consumers are either cynical or cautiously enthusiastic about marketing efforts directed toward their communities. Thus, relationship marketing with its primary focus upon obtaining and keeping repeat customers (i.e., retention) through superior quality and mass customerized product offerings is preferable to a transactional marketing approach with its much more expensive focus upon acquiring new customers through advertising.  

Other researchers in recent works studying the gay and lesbian communities (e.g., Bhat 1996; DeLozier and Rodrigue 1996; Penaloza 1996) have also commented that this market has considerable potential for corporations. The following discussion will focus on two related topics: how to market to gay men, and the ethical pitfalls involved in doing so.

Market Segmentation?

There has been evidence that - with the help of corporations' efforts at market segmentation - various markets are fragmenting and have been differentiating themselves over the last few decades (Solomon 1994). Economic, aesthetic, and political changes have resulted in the postmodern phenomenon of smaller market segments or taste cultures developing, many of which whose members self-select, to an extent: gays and lesbians and subcultures of consumption (e.g., Schouten and McAlexander 1995; Penaloza 1996). Other minorities, through the processes involved with identity politics, also view themselves as distinct market groups: the Quebecois Francophones, Hispanics, and Blacks to name just a few (see Hirschman 1985; Penaloza 1994; Solomon 1994). Gays and lesbians, through historical and market processes also, to an extent, view themselves as members of a distinct minority group (Weeks 1985).

Obviously, gays and lesbians consume much of the same products as heterosexuals do. However, the whats of consumption are not the only issue here. Rather, marketers might focus on other issues of interest: how much they consume and the meanings of that which is consumed. Fugate (1993) maintains that those who subscribe to the gay "lifestyle" would be concerned only with various products which relate to that lifestyle: products which have to do with gay sex, primarily. This assertion represents the heterosexist and paradigmatic error which many individuals, corporations, and too many marketing academicians make that the only difference between gays and heterosexuals is one of sexual orientation. This error may in fact reflect a well-meaning liberal bias to be more tolerant. Nevertheless, the upshot of this perspective is the same as if these academics were right-wing, fire-breathing, religious fundamentalists: in a positivistic and reductionist manner, it degrades tile sophistication of gay subcultures complex set of rituals and meanings, as I have demonstrated herein – to the problematic status of a lifestyle which is unhealthily preoccupied with just one thing – sex. It is strange how heterosexuals are considered to have lives (which might be considered sophisticated composites of many lifestyles with some individual quirkiness thrown into the mix), while gays and lesbians are slotted into one stereotypical lifestyle. The humanist perspective, on the other hand, focuses more upon the meanings of consumption and has the potential to yield some useful insights regarding marketing practice, such as the following.

Should Companies Target Gay and Lesbian Communities?

One could argue that large organizations are prudent to hesitate to market to the gay and lesbian communities. Levis, Toyota, Wells Fargo, Disney, and BankAmerica were all boycotted by the American religious right when they were found to be somewhat gay-friendly (either through marketing or business policies). The religious right in the United States is gaining momentum, is very well-funded, and can be depended upon to monitor each gay publication in North America in order to develop a blacklist of those corporations which advertise in the gay press. Thus any large, public corporation which contemplates targeting the gay men's market must do two things. First, it should conduct marketing research of the gay market in the cities where it is considering the development of a separate marketing strategy. Second, it should perform demographic and psychographic analyses of its existing customers in order to determine some of their key social characteristics. If a company's sales and profits depend predominantly upon customers who hold very traditional gender-role attitudes toward women and gays, then perhaps it should consider carefully whether it should market directly to gay men. On the one hand, it should be remembered that large, public corporations have legal, fiduciary, and moral obligations to many stakeholders: shareholders, employees, and existing customers. From a thoroughly business-oriented perspective, threatening sales by inviting potential boycotts and negative publicity could be construed as an irresponsible, imprudent course of action. And perhaps it is unrealistic to expect corporations to be the leaders of social change in our society.

On the other hand, would many modern marketers refrain from advertising in Ebony or Jet (popular magazines targeted at African Americans) for fear of offending racists?! Perhaps the threat of a successful boycott is more imagined than real. Levi's, Disney, and BankAmerica are still thriving companies, in spite of (or perhaps because of) the fundamentalist boycotts. Second, according to Lukenbill (1995), only a minority of Americans (41 percent) would prefer "not to be around gay people." A Maclean’s magazine survey performed by the Angus Reid Group of Winnipeg, Canada determined that the majority of Americans and Canadians (64 percent and 66 percent respectively) supported the notion that "gays should have the same rights as others . . ." (Maclean’s, November 4, 1996, p. 38). So, what's all the fuss about? It is significant to note that a substantial minority (say, approximately 30 to 40 percent) of Americans and Canadians are homophobic, antigay bigots. In creating its strategies and plans, do business enterprises generally cater to the prejudices of such people? This is the moral and pragmatic question which businesses must answer before they openly targets the gay and lesbian communities.

If the answer is yes, then perhaps corporations in question should contemplate the following conundrum: are they willing to cater to the competing and (often) changing political whims of every special interest group: feminists, environmentalists, gun owners, senior citizens, right-wing militia members, vegetarians, animal-rights activists, the disabled, gays and lesbians, the religious right, the cultural left, Christians, Jews, Catholics ... the list could go on and on!

The marketing concept may be of some value in resolving such a problem. If a company's data on its customers and products indicates that the products might serve the needs of gays or lesbians exceptionally well, ethically, profitably, and better than those of its competition, then it should seriously consider a dedicated marketing strategy and mix targeted at the gay and lesbian communities. For those businesses which do decide to proceed with developing strategic marketing plans for developing tile gay market, this study has some relevance to them. First, segmentation is a critical, strategic concern. It cannot be determined presently exactly how large the gay and lesbian market is. Kinsey, Pomeroy, and Mai-tin (1948) found that 10 percent of their sample engaged in homosexual behaviors to varying degrees, but it is reasonable to expect that only a portion of that percentage would be out and have a relationship with the gay subculture. Lukenbill (1995) maintains that 6 percent of those surveyed in the United States self-identify as gay or lesbian. Even if only 3 percent of individuals are out and self-acknowledge to a significant extent, then almost eight million Americans and one 1-nillion Canadians comprise the gay and lesbian market. In an urban area, these percentages would reasonably be considered higher due to the migration of gays and lesbians during the last fifty years (Weeks 1985; Lukenbill 1995). Thus, for the sake of economics, marketing efforts are advised to be targeted toward large- and medium-sized American and Canadian cities.

Such a small market may not economically justify a separate campaign. Companies should be cautioned of the perils of excessive micro-marketing: a proliferation of brands, sizes, colors, flavors, and varieties and increased production costs. Further, while some marketing research organizations have found that gays and lesbians earn more and are more highly educated, the following factors should be taken into account. First, previous surveys (with the exception of Lukenbill's [1995] work which is based on the Yankelovich data) are quite flawed and unreliable for marketers, as they are usually based upon biased samples of gay magazine readers, a relatively wealthy, educated lot generally unrepresentative of the gay and lesbian population. Also, gay men and lesbians may be culturally and economically divided. Lesbians may earn less. In Canada, for example, women still earn only 72 percent of what men earn (Globe and Mail, August 10, 1995). Politically, many out lesbians may identify with various branches of the feminist movement and may be quite suspicious of organizations attempting to exploit them (Penaloza 1996). On the other hand, gay men as a market segment are quite diverse on critical marketing criteria. Contrary to the new stereotype of the gay male as well-off, educated, culturally sophisticated, and hungry for the very best of everything, many of the informants in this study were of rather modest means and did not care to buy the best. AIDS is still very much a tragic reality for the gay men's community. It should be noted that this disease usually strikes during earning years between twenty-five and fifty, during which time most gay men have not accumulated the savings, retirement savings plans, and pensions upon which older people may rely if they become chronically ill. In other words, gay men living with AIDS may expect to be poor. Therefore, businesses should keep in mind that the gay men's community is not "homo"-geneous in many ways of interest to marketers.

Yet, businesses should not let the diversity of the gay men's communities discourage them. There are a number of compelling business and economic reasons why campaigns have the potential to be quite successful. First, according to Lukenbill (1995), gay men and lesbians are, on the average, more educated than the heterosexual population. Second, according to the data in this study, many gay men are willing to become brand loyal to companies which demonstrate some integrity and ethics toward them and their issues. Finally, despite that gay men do not earn significantly more (or less; yet another stereotype shattered) than other people, two employed and cohabiting gay men do have potentially higher disposable incomes. As one informant, Chuck, phrased it, when he was in a relationship for twenty-five years, one of their incomes became "fun money." During his interview, he often alluded to the fact that he was now "broke" and spoke nostalgically of the days when he had lots of money-when he was together with his partner, enjoying the good life. This insight implies good news for the marketers of luxury goods and some services: food, hotels, cruises, travel, fine wines, entertainment, financial products such as mutual funds, magazines, compact disks, and books. It is amazing what two people in a conjugal relationship are financial able to purchase when they do not have to worry about funding their offspring's college tuition or paying for diapers, baby cribs, or clothes and food for children! Marketers should ponder this important point.


Positioning of the product – i.e., the communication of its central benefit(s) or social meaning(s) in relation to competing brands – is an important issue which should always be contemplated before targeting the gay market. As discussed previously, one of the meaning categories discovered in this study was one of stereotypically gay products or brands. This meaning category is also an interesting type of positioning for products. It may provide an important psychological benefit within the overall brand image of a good or service: "this is the product for gay men relative to other competitors." Some products such as Absolut vodka and Doc Marten boots have achieved such high brand awareness and loyalty among gay men that they are viewed commonly as gay brands.

However, marketers should be cautious about this type of branding approach. While it may be useful and beneficial for gay men to view a product as the gay brand, other heterosexual segments may avoid the product for tile very same reason. As discussed previously, the meaning movement process may be subverted such that intended meanings do not successfully attach themselves in the expected ways. "Seepages" of meaning may occur from gesellschaft (the smaller, gay social world) to gesellschaft (the larger, cultural world) since they both coexist and overlap to a significant extent. As one informant, Eilert, described, one particular golf club he visited banned Molson products because this beer company had advertised in the Lesbian and Gay Pride Day Souvenir Guide. Obviously, at least one bigoted heterosexual had read this gay media vehicle and had concluded that this particular Molson brand meaning was "not in accordance with family values"-a positioning many businesses may wish to avoid with its greater public!

One possible solution to this problem is the use of heavily coded advertisements. As demonstrated by this research, many gay men have developed a particular "consumer consciousness" (see also Lukenbill 1995) through their different perspective of the cultural world. Thus, the very same marketing communication, if carefully constructed, may carry different messages, semiotically, to gays than to heterosexuals. For example, the Calvin Klein underwear ads which featured Marky Mark appealed to both heterosexual women (who presumably bought underwear for their special men) and to gay men, with no one much the wiser. Why? Due to consumer acculturation and the process of learning new gay product meanings discussed previously, many gay men are able to "pick up" on such semiotic ambiguities through a sensitivity commonly known as gaydar (i.e., gay radar).

Ultimately, promising and consistently delivering high quality goods and services is the best positioning for many products. Yet, quality may mean different things to gay men. The data yielded some interesting observations in this regard. For some of the informants, the comfort and connectiveness they experienced using some goods and services was a key aspect of superior quality. For example, some informants such as Chuck noted they went to gay restaurants because of the comfort they felt being in the company of other gay men and because they believed they were supporting their communities by doing so. Interestingly, they also mentioned that the food at many of these restaurants was not particularly all that good. Two points should be noted here. First, social capital can be created by businesses by treating gay customers well; correspondingly, gay men may receive a form of social utility by choosing goods or services by gay-positive businesses. Second, consider how successful a gay restaurant located in the gay ghetto could be if it had good food!

Thus, some effective tactics may be recommended. Businesses located in the gay area or those targeting the gay community should provide both social utility and economic utility. Hiring openly gay and lesbian employees (and treating them well), donating to gay and lesbian charities, providing a friendly, gay ambiance in service locations, and maintaining a high profile, trustworthy market presence in gay and lesbian communities, along with providing a high quality core product, are all advisable tactics capable of reinforcing a favorable positioning.


Those companies which develop successful market niche strategies may consider advertising in gay media in order to attract gay consumers. This could be a very effective marketing tactic for a number of reasons. First, media costs for specialized media may be very economical per capita, given that gay media reaches fewer absolute numbers of consumers but almost all of them are within the targeted subculture (plus some enlightened, curious heterosexuals and a few fire-breathing Christian fundamentalists looking for evidence of the "gay lifestyle's" perverse nature). Second, when mainstream organizations advertise in the gay press, gays and lesbians often feel that their existences are recognized and validated, as this study has suggested and as Penaloza (1996) has observed. Thus, advertising in gay media may be interpreted as meaning that the sponsoring organization is gay positive and its products are worth a more involved and extensive search and evaluation. Such a process may, over time, result in higher brand awareness and brand loyalty.

Advertising may be only the start of a marketer's relationship with the gay men's community. No marketing academic would ever claim that, in general, one single ad or series of related ads cause consumers to buy a product. Ideally, over the long-term, effective, creative advertising creates brand awareness, eventually leading to a viable positioning and brand image for a product. Moreover, advertisements when combined with the process of word of mouth may be critical in achieving success (Solomon 1994). Given that many gay men gain a sense of validation from those mainstream advertisers who do so, if a company decides to advertise in the gay media and does it well, it is likely that gay consumers will tell their friends within the closely-knit community social system. This powerful word-of-mouth effect may result in extensive diffusion of positive brand information.

Other Promotions

There are other promotional tactics which marketers might employ in order to persuade gay consumers to buy their products. Some of the informants were rather wary of the motives of various organizations who advertised in the gay media. Advertising was viewed as only one mode of commitment and support of the gay community. Those successful niche players who wish to gain long-term brand loyalty might consider donating to various gay charities or not-for-profit organizations. Even if some organizations did not want to be perceived as political, they could donate to AIDS hospices or organizations and appear to be very humanitarian. Moreover, since AIDS is not a disease restricted to gay men, supporting AIDS-related organizations would appear to be an overall humanitarian act which might be perceived as generous and good corporate citizenship by gays and heterosexuals alike. Other worthwhile marketing tactics entail the inclusion of sexual orientation under a company's nondiscrimination policy or the granting of spousal or domestic partner benefits to employees, acts which might signal that a company is truly supportive and committed to attaining social justice within the workplace itself.

Blatant attempts to market to the gay men's market might be considered cynical and opportunistic. Thus, it is important for marketers to be cautious In this regard. The co-opting of gay symbols such as the rainbow flag, the word pride, or the pink triangle is a problematic tactic. On the one hand, it does indicate that a marketer recognizes and acknowledges its gay customers. On the other hand, if a large organization, new to targeting gays, made such a move, gay consumers might consider such co-optation as exploitative and inappropriate: a gauche juxtaposition of the sacred and the profane. It should be noted that Absolut vodka used the open closet and the rainbow flag as prominent signs in their Summer 1995 advertisements in Xtra! West magazine, and there was no media outcry from readers. However, it should be noted that Absolut has been advertising within the gay press since the late 1970s and perhaps, as a gay brand itself, has "earned the right" to co-opt such symbols. Thus, as culturally constituted symbols considered within the realm of the gay world, the levels of meaning of Absolut and the symbols it used appeared congruent and appropriate. Thus, neophyte marketers might assume a more humble approach, until their status as outsiders is transformed over a number of years, in a process analogous to a commercial rite of passage.

Ethical Issues

The above point leads the discussion to the issue of ethical treatment of gay consumers, a critical concern for marketers. Lukenbill (1995), for example, argues that gay men and lesbians are more suspicious of large corporations than are heterosexuals. Thus, it is critical that corporations earn and maintain a high level of trust in relation to the gay and lesbian communities. Trust is the foundation upon which social capital is developed. And without the necessary connectiveness and bonding which such social capital can often yield, long-term sales and profits may not be possible, given the overall cautiousness and sophistication which the informants demonstrated during interviews. Thus, I offer one word of caution to marketers: do not try to fake it with gay consumers; some of them have some of the best bullshit detectors around.  

Moreover, some of the informants in this study had experienced the problems commonly associated with oppression: alcoholism, drug addiction, escapism of different varieties, anorexia nervosa, low self-esteem, depression, ideations of suicide, and alienation from family or other significant others. One informant confessed to having attempted suicide. Some gay men may be very vulnerable to the strategies and tactics employed by marketers and open to the somewhat questionable benefits they sometimes proclaim. Even advertisements in the gay press featuring gay men in positive social settings may be construed as a possible panacea to feelings of alienation-if one buys the product. The following (admittedly normative) guidelines may be very useful to marketers in order to ensure ethical business behaviors:

1. Marketers of alcoholic beverages may wish to consider not marketing at all. However, this option is probably unrealistic, given that some of the large organizations who sponsor Pride Day are purveyors of these products. The advertisements themselves may mention behaviors such as moderate drinking and a refusal to drink and drive. Further, it has been suggested that alcohol consumption is an important part of the gay subculture (Weinberg 1986) and has an impact upon love relationships. Most important, marketers of alcoholic beverages must recognize the possible link between alcohol consumption and unsafe sex practices. Thus, in order to believe ethically, marketers may wish to initiate campaigns stressing the dangers of having sex while intoxicated, encouraging gay consumers not to do so.

2. The overuse of idealized images of young, muscular, blond, hairless young men should be eschewed. Gay men are disproportionately the victims of anorexia and those who are not may feel excluded or alienated by such images. Such images also reinforce the all too prevalent attitude that the only people worth socializing with or loving are the perfect, the young, and the beautiful. Naomi Wolf (1989) in her book, The Beauty Myth, has suggested a more useful, socially beneficial approach: expand the notion of beauty. Advertisements should consider using members of different ethnic groups and races, of different age categories, and of different body types. Such an approach may actually have the commercially beneficial consequence of inspiring consumers who do not fit the ideal mold to consider the product as well. This approach is not just politically correct. It is good business as well. Like their heterosexual counterparts, many gay men are baby boomers, between the ages of thirty and fifty. While some of them may appreciate the constant use of idealized male images in advertising, many more may prefer to see attractive men their own age (warts and all) featured in ads for cosmetics, clothes, or health products, to take some examples. And why not? Contrary to what many advertisers may think, many gay men healthily identify as older, mature individuals and have distanced themselves from their longings for a departed youth. Youth, after all, is wasted upon the young!

3.  Advertising may be avoided completely. The Body Shop is considered to be hugely successful and has never advertised. Instead, every franchisee is expected to get involved in community events (Brown, Martenfeld, and Gould 1990). For example, the Body Shop at the comer of Church and Wellesley distributes safer sex and AIDS information. Creative promotions such as these can often be very proactive, ethical promotions.

4. Organizations should avoid the co-optation of important gay symbols in their advertisements. Unless it has a highly publicized history of support in the form of donations or public promotions, such a tactic may have the consequence of "sanitizing" powerful and meaningful symbols, degrading them into fashion statements. Benetton is famous for using this type of tactic, but it should be noted that its advertisement featuring HIV-positive branding and a dying person with AIDS were used as shock tactics directed at general audiences. While these advertisements were considered hugely offensive by some, they did have the social benefit of spreading AIDS awareness.

It should be remarked upon that no set of guidelines can ensure that an organization "does the right thing" in every moral dilemma or set of circumstances. Effective and ethical marketers who decide to market to gay consumers should become knowledgeable about the market and non-market aspects of gay men's lives and subculture in order to ensure that the ethical dimension is taken into consideration during each phase of the determination of the marketing mix. Ultimately, what is required are perspectives of the gay men’s market, not simply prescriptions.

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AP/ADMS 4290 3.0 Marketing For Competitive Advantage
York University, Toronto
© M Louise Ripley, M.B.A., Ph.D.