Market potential for cross-gender group

In the business circles, the brands favoring "gay" is to follow a rational line, that is because gay people is the dream of the "three high" group for almost all the brands---high income, high education and high intelligence quotient. In an effort to explore the market potential for cross-gender group, Americans even invented a new word specifically--- LGBT (i.e. lesbian, GAY, Bisexual and Transgender).

Studies have shown that due to the homosexual couples do not have children, plus they are mostly high-income earners. Therefore they have a lot of spare money for consumption. More importantly, the survey pointed out that comparing with the heterosexuals, the homosexuals are more susceptible to the impact of advertising, especially for those ads that close enough to their needs and show respect and recognition to them. Another reason for the brands favoring the "gay economy" is that gay people are thought by some people as "the good taste" and "the leadership of fashion". "The Economist" has pointed out that the proportion of homosexuals of a city shows a positive correlation with the art, diversity, vivid for this city. That is because the acceptance of homosexuality means that people's thoughts and ideology is more open and they are willing to accept the novelty, which will create an atmosphere of challenge and breakthrough in this region. Moreover, many professional analysts believe that the homosexual people are the guide of fashion trends in the community. Gay people are sensitive, faddish, loyal to the brand and with higher consuming power at the same time. Any business would get benefit if they try to be friendly to this special group of people. A lot of members of gay society are in-depth into arts and entertainment industry. He (she) has formed the taste of the fashion trends and affected greatly on the scope of music, movies, television, and clothing, etc., where just the cradle of guiding the mainstream society trend are. As the industry's top talent, or idol-class characters, such as creative people, designers, singers, actors, directors, playwrights, musicians, and famous chef, etc., gay tastes through packaging would soon spread into the so-called "trend".

In term of marketing, homosexuality is also a market. A well-known U.S. national gay magazine has described so: "advertisers hit the right not only to their core target group, but also found that the personality of products they shaped was very popular within gay people and has attracted a considerable degree of topicality". Another gay magazine--- the Advocate even in the past year used highly representative top male and female celebrities of the performing arts and entertainment industry as cover story for every issue of the magazine. In this autumn France for being the first set up a gay television channel---Pink TV which tailored mainly for gay, lesbians and bisexuals. The content for this channel in addition to drama programs, <Wonder Woman> must be broadcasted every night at 7:00; moreover another unit will be Open Discussion which debate homosexuality and other topics. Due to the French LGBT population was about 3.5 million, this TV station was full of confidence for the market at the beginning of the opening. There are not so many television programs designed specifically for the homosexuals, in the UK there is a shopping channel dedicated selling gay commodities and a gay night erotic channel; whilst exclusive Radio is relatively more, such as Hong Kong's "GCHK (Gay Channel)". These special channels would create high market value for the industry.

In 2008, the Prime Access and PlanetOut Inc. who focus on gay marketing carried out a survey for 2259 persons. The U.S. Apple Inc. ranked at the top in brand survey result. This result is not unexpected. The report pointed out that the reason why Apple Inc. was so beloved by gay men and women was mainly due to the homosexuals had been influenced by Apple's advertising, surrounded-friends and a number of media. What is more, Apple is the first company who is homosexual unlimited when attract new employees. In addition, Apple's sub-groups of the audience also included the homosexuals. In this survey result the ranks near the front also included Showtime, HBO, Absolute (Absolute Vodka) as well as Levi's and so on.

"Over the years a large number of survey data show that gay consumers are more loyal to buy their own product brands." said Howard Buford, president and CEO of Prime Access, "Recent survey data also shows that 68-72% of gay consumers are more inclined to buy the brands that they think friendly with the homosexuals. In addition, according to Buford, the gay group is more inclined to chase the trend and many people are easily influenced by others. Therefore, they are the major consumer groups whom the company should strive for, because they can affect other people's shopping behavior. Bob Witeck, CEO of Witeck-Combs Communications, a company focusing on gay marketing in Washington, said that they expect by 2011, the LGBT population spending will reach 831 billion U.S. dollars.

The way for many companies involved in the field of LGBT consumers is direct advertise in the national or local LGBT media. As many market analysts said, there will appear some specific goods in the market for the homosexuals. The merchants would be out of new tactics to create such goods for fighting for the gay market. There are nearly 200 new brands of vodka on the market and most of them are competing on the gay market. That is because the Absolute Vodka has successfully expanded for the gay market and its current status is coveted by other businesses. In the world of Absolute Vodka, all ads must be "gay-friendly". In order to lifting the appetite of readers, Absolute Vodka's iconic image seems to be the last one to debut elegantly for luxury magazines in the United States. In fact after being on stage in 1981, Swedish short-necked round shoulder crystal flask was sparkling in the print ads pages. People would never forget a name: Absolute Perfection. This advertising campaign not only aroused the U.S. public awareness of a brand, but also let gay people know the brand---Absolute Vodka through the advertising promotion on the gay magazines The Advocate, Out and other similar publications. Comparing with other enterprises' vague advertising campaign for gay market, Absolute Vodka's performance in marketing and the decision-making process behind the scenes for the gay people is refreshing. Over the years, the company put a lot of ads for the homosexuals, and the advertising spokespersons are Spada (the artist for the rings of love&pride), KeithHaring (U.S. graffiti artist), etc.. According to the spokesman JeffreyMoran from JP Morgan Company, since 1981 Absolute Vodka has invested up to 20 million U.S. dollars for LGBT which were some sponsors for the events, for instance GLAAD Media Awards, 25th anniversary for rainbow flag and the latest gay game VII. These efforts were not in vain; Absolute Vodka ultimately broke through the fierce market competition and occupied the throne of the market. Another classic case of gay marketing is the American airline. Although its LGBT marketing was very well known, it mainly focused on the role of sponsor for activities but almost did not advertise in gay media. But now, it has on a large scale begun targeting multi-media advertising campaign for gay travelers. "These travel ads have a thing in common: they are the same couples' face. We should try something more imaginative." American Airline's spokesman Tim Kincaid said in 2006 that these pictures trying to capture "a desire of vagrant" and show a felling of "travel with people who care about". Travelling creating own time and space for us, and this ad subtly reminds people: I have always been here and waiting for your call.

Nowadays in the U.S., just like discovered a new continent, the world's largest enterprise groups who are willing to take the risk of against the mainstream of public opinions and "come out of the closet" to express the friendship to the homosexual market. Apart from those large enterprises who have worked hard for many long years in the gay market, such as "American Express", "Apple", "AT & T", "Evian", "Levi's", "Nike", "Saab", "Virgin Atlantic" and a number of fashion clothing, drinks and cigarettes, recently other sort of large companies such as "America Online", "Aetna insurance", "Chase Manhattan Bank", "IBM", "Johnson", "Merrill Lynch", "Subaru" and "United Airlines", but also spotted the gay market opportunities and had the arrows aimed at these high-spending groups. According to data on Rivendell Media provided by William Spain in 2007, in 1994, among the U.S. Fortune 500, there were only 19 companies dared to advertise in the gay media, while in 2006 this figure has risen to 175. According to statistics, during the past five years, the average annual increase of online advertising business for gay people in the United States was 33%; the ads in print publications also increased by 205%. In 2006 the amount of ads for homosexuals has reached 220 million U.S. dollars.

Facts have proved that Americans are wise. The root cause is that they very much understood the situation of homosexuality in the United States. According to "Gay & Lesbian Market Study" from the Simmons Market Research Bureau and the advertising agency Mulryan/Nash, the results showed that: in the United States, 28% of male homosexuals' annual household income are more than 50 thousand U.S. dollars; 21% of them are more than 100 thousand U.S. dollars; 50% of the homosexuals respondents reside in corporate management positions; 88% of them would purchase the brand products that have been advertised in the gay media according to their preferences; 61% of the respondents would go abroad for vacation at least once a year; 80% of the respondents would go to the exclusive restaurants for dinner for more than five times per month; 84% of the respondents would point the name of the brand for drinks and 60% of the respondents for the past 6 months have been consumed over the top wines. This data alone is enough to excite advertisers who eager to explore the homosexuals market.

However on the other hand, the gay market was not such smoothly at the start. Just about 10 years ago, running on gay ads in television was still a very risky thing to do. The first time a pair of gay couples showed for U.S. television was in 1994: the Swedish IKEA Company broadcasted an advertisement every night--- two intimate men were purchasing the dining table at the IKEA furniture store. But later on IKEA Company was forced to dismiss this ad because of receiving a bomb threat letter; in 2000 during the period Atlanta Olympic Games and the World Baseball League, John Hancock Insurance Company introduced an advertisement about a pair of lesbian couples adopting an Asian baby. One of the women said "do you believe that? We are a family"; while another one said "You will become the best mother". However, this sensitive dialogue was clipped after broadcasting once so that deliberately made the audience mistakenly thought this may be a pair of sisters.

Things have changed with the passage of time and people become increasingly tolerant of gay advertisements. The lesbian talk-show host Ellen DeGeneres could advertise in the postal cards for the United States; The rock star Melissa Etheridge and her partner could also advertise for Cartier jewelry and even both of them wore a bracelet which designed for the Lesbian Wedding; The Budweiser beer, for gay people, not only promoted a set of provocative advertisements that used to be for heterosexual men and launched a dubious long-necked beer bottle shape, but also pretentiously branded as "perfect package". As homosexuals mysterious veil gradually lifted, misunderstanding and discrimination against homosexuals slowly eliminated. More and more brands suddenly discovered the tremendous business opportunities for this homosexual market. Only for the United States, for example, the homosexual population is expected to reach 16.3 million in 2011 and what is more, the purchasing power of them would hit staggering 835 billion U.S. dollars.

However at the same time, LGBT, even in the "open" America is still a relatively "sensitive" concept as well. Therefore for exploring the LGBT market, the other side of the coin is the marketing scale. How to both cause the resonance from homosexuals and avoid the resentment from mainstream group is a big issue to consider. For the popular brands, if the scale was too over to make the mainstream group think that you are especially for gay markets, it had a bit more harm than good. But for the mass brands, if you want more "security" to explore the LGBT market, in addition to recourse to the celebrities with well-known sexual orientation, choosing more covert means to express homosexuality, or switch to playing the "humor" cards is the co-existence strategy. In fact, many successful examples could prove this:

Celebrity card: as mentioned before, rock star Melissa Etheridge and her partner for the Cartier jewelry; lesbian tennis star Martina Navratilova for Subaru and the famous Italian designer Domenico Dolce and his partner Stefano Gabbana for Motorola mobile phone.

Veiled card: the image of two men who running together, picnicking or playing with children at home has been easily seen in some fashion and household items advertisements. In fact, these advertisements cater to homosexuals but they can be acceptable for the general population as well.

Humor card: "perfect package" for Budweiser beer; Sumo wrestlers washing the Subaru car. These humorous advertisements do not express any of the sexual orientation, so that not only the public accepted them, but also the gay people resonated, which is undoubtedly a win-win.

Although there is still relatively controversy for homosexuality from the conservative groups, homosexuality has been no doubt a part of popular culture. For the brands, the gay market is more than a "hot potato". As long as showing friendship to them, supported by appropriate marketing strategy, releasing of the brand's goodwill towards them and taking full account of their individual needs will be able to win the brand-new world. Moreover, with the gay political movements and the gay issues becoming increasingly mainstream, the original homosexuals who were on boundary situation have being "come out of the closet". Different from other social groups, gay groups are keen on consumption, pay attention to personality, focus on lifestyle, have a special sense of fashion and even take the initiative to search for fashion information. For advertisers, this is undoubtedly the group who are "the most active consumers".

Reference: American Airlines Flies First Gay Print Ads. [Accessed 6.4.10]
  • Prime Access Inc. (2008) Highlights of the 2008 Gay and Lesbian Consumer Study.
  • Prime Access Inc. (2007) 2007 Gay Press Report.
  • Prime Access Inc. (2006) 2006 Gay Press Report.
  • Prime Access Inc. (2005) 2005 Gay Press Report.
  • Prime Access Inc. (2004) 2004 Gay Press Report.
  • Robert W. and Wesley C (2006) Business Inside Out: Capturing Millions of Brand Loyal Gay Consumers. Kaplan Business.
  • Simmons Market Research Bureau and Mulryan/Nash. Gay & Lesbian Market Study.
  • William S. (2007) Report: Gay media grows faster than mainstream.

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