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Today's most giftable price points

By Nancy Zwiers -- Gifts and Dec, 10/1/2006 12:00:00 AM

Toy manufacturers count on moms' purchase of birthday gifts (for their own children as well as their kids' friends, relatives and classmates) to make up a considerable portion of their annual revenues. It seems like moms are constantly shopping for birthday gifts—but just how much are they spending on each gift? It used to be that $9.99 was the magic price point, but is this still true? A recent study conducted of 400 moms of boys and girls ages 6-12 by marketing firm Funosophy Inc. gives the most up-to-date answer.

Urge to splurge

Most moms want to indulge their own children when their birthdays roll around. In fact, nearly 90 percent of moms report spending $29.99 or more on gifts for their kid's special day. When it comes to other relatives like nieces and nephews, there is a wider range of prices that moms are willing to consider. More than two-thirds of moms surveyed reported spending between $19.99 and $29.99 on birthday gifts for these relatives.

Forking out for friends

There is a clear hierarchy that moms follow when budgeting for birthday gifts for their kids' friends. The closer the friend, the more she will spend. Specifically, moms will cough up a full $19.99 for a child's best friend, while other friends warrant gifts between $9.99 and $14.99. For the casual friends that moms buy for throughout the year, $9.99 is still the going rate, with nearly half of moms surveyed (47 percent) reporting spending that much.

Household income definitely plays a part in moms' price-point decisions. When it comes to spending on a gift for their kids' best friends, only 34 percent of moms with a household income of less than $35K will purchase a gift at $19.99 or above, while 83 percent of moms with a household income of more than $100K will probably spend at least $19.99.

When it comes to their kids' close friends, moms with higher household incomes are likely to purchase gifts in the $14.99-$19.99 range, while moms with lower incomes are most likely to spend $9.99.

Interestingly, the tried-and-true $9.99 birthday price point still stands for the casual friend, no matter the income level of the purchaser. More than half of moms in the less than $35K bracket reported being most likely to spend $9.99 for a gift for a child's casual friend. Moms with a higher income level may stretch to the $14.99 price point, but are still most likely to purchase at $9.99.

Demo differences

In regards to demographics, we saw no difference between the spending of moms of boys and that of moms of girls. Likewise, the birthday budgets for 6- to 8-year-olds mirrored budgets for older kids.

The sweet spot

Although most moms are spending more than $29.99 on gifts for their own kids' birthdays, $9.99 to $19.99 is the sweet spot for gifts for their kids' various friends, for whom we can assume they are purchasing gifts regularly throughout the year. Giftable items within that price range are sure to be a constant source of revenue for toy manufacturers.

Written by Nancy Zwiers, CEO of Funosophy, Inc. This survey was conducted by Funosophy and its research partner KidzEyes among a nationally representative sample of 400 moms of kids ages 6-12.

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