Marketing

- Featured Publication
Frontiers: Can an AI Algorithm Mitigate Racial Economic Inequality? An Analysis in the Context of Airbnb

By: Shunyuan Zhang, Nitin Mehta, Param Singh and Kannan Srinivasan

Nominated for the 2022 John D. C. Little Award.

They study the effect of Airbnb’s smart-pricing algorithm on the racial disparity in the daily revenue earned by Airbnb hosts. Their empirical strategy exploits Airbnb’s introduction of the algorithm and its voluntary adoption by hosts as a quasi-natural experiment.
- Featured Publication
Frontiers: Can an AI Algorithm Mitigate Racial Economic Inequality? An Analysis in the Context of Airbnb

By: Shunyuan Zhang, Nitin Mehta, Param Singh and Kannan Srinivasan

Nominated for the 2022 John D. C. Little Award.

They study the effect of Airbnb’s smart-pricing algorithm on the racial disparity in the daily revenue earned by Airbnb hosts. Their empirical strategy exploits Airbnb’s introduction of the algorithm and its voluntary adoption by hosts as a quasi-natural experiment.
- Featured Case
Hometown Foods: Changing Price Amid Inflation Case

By: Julian De Freitas, Jeremy Yang, and Das Narayandas

During the early part of the 2021 Covid-19 pandemic, Hometown Foods, a large seller of flour-based products, thrived as consumers hoarded baked goods and took up baking to pass the time and find comfort. Then, amid growing shortages in commodities, a vaccine arrived, businesses began to re-open, and consumers benefited from federal relief aid. This perfect storm of high demand amid stock shortages generated the highest inflation in 13 years.
- Featured Case
Hometown Foods: Changing Price Amid Inflation Case

By: Julian De Freitas, Jeremy Yang, and Das Narayandas

During the early part of the 2021 Covid-19 pandemic, Hometown Foods, a large seller of flour-based products, thrived as consumers hoarded baked goods and took up baking to pass the time and find comfort. Then, amid growing shortages in commodities, a vaccine arrived, businesses began to re-open, and consumers benefited from federal relief aid....
- Award
Winner of the 2016 Case Centre Award in the Marketing category for “The New York Times Paywall” (HBS Case 512-077).

By: Sunil Gupta, Vineet Kumar, Bharat Anand, and Felix Oberholzer-Gee

The Case Centre Awards and Competitions recognize worldwide excellence in case writing and teaching, and are considered the case community's annual 'Oscars'. The winners of this category are the Marketing cases that were used in the largest number of organizations across the globe in the preceding calendar year.
- Award
Winner of the 2016 Case Centre Award in the Marketing category for “The New York Times Paywall” (HBS Case 512-077).

By: Sunil Gupta, Vineet Kumar, Bharat Anand, and Felix Oberholzer-Gee

The Case Centre Awards and Competitions recognize worldwide excellence in case writing and teaching, and are considered the case community's annual 'Oscars'. The winners of this category are the Marketing cases that were used in the largest number of organizations across the globe in the preceding calendar year.
- Article
Minimum Advertised Pricing: Patterns of Violation in Competitive Retail Markets

By: Ayelet Israeli, Eric Anderson, and Anne Coughlan

We study the extent and depth of MAP violations among online retailers and confront managerial wisdom with empirical data.

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- Article
Minimum Advertised Pricing: Patterns of Violation in Competitive Retail Markets

By: Ayelet Israeli, Eric Anderson, and Anne Coughlan

We study the extent and depth of MAP violations among online retailers and confront managerial wisdom with empirical data.

More Information
- Award
Outstanding Case Teacher

By: Anita Elberse

This world-wide Case Centre competition recognizes an excellent practitioner in the case classroom.

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- Award
Outstanding Case Teacher

By: Anita Elberse

This world-wide Case Centre competition recognizes an excellent practitioner in the case classroom.

More Information

About the Unit

Marketing is critical for organic growth of a business and its central role is in creating, communicating, capturing and sustaining value for an organization. Marketing helps a firm in creating value by better understanding the needs of its customers and providing them with innovative products and services. This value is communicated through a variety of channels as well as through the firm's branding strategy. Effective management of customers and pricing allows the firm to capture part of the value it has created. Finally, by building an effective customer-centric organization a firm attempts to sustain value over time.

Our faculty addresses a broad array of topics in all of these areas. Our work attempts to get a better understanding of how consumers use information and make choices and how these choices affect the firm's strategy for new product development, customer relationship management, branding and other marketing efforts. We examine issues related to branding, business marketing, global marketing, distribution channels, pricing, direct and interactive marketing, sales management and return on marketing investment. Some of our faculty specializes in specific industries such as retailing, agribusiness, social enterprise, media, arts and entertainment.

There are several new developments in marketing that offer opportunities for us to make important contributions in the future. The current economic crisis is changing consumers' current and future purchase and consumption patterns. Search engines have changed the way consumers obtain information and make decisions and they are also dramatically changing the advertising industry. Social networks and user generated content have opened a new way for consumers to engage with each other as well as with brands and companies. There are significant changes in the attitudes of consumers and companies about social issues. Consumer preferences and choice of products are increasingly influenced by social factors. Companies are recognizing that there is a large market at the "bottom of the pyramid" and marketing to these consumers may require a new framework. These and related developments provide great opportunities for the marketing faculty to make a significant impact in the future.

Recent Publications

AI and Brand Management: Promises and Perils

By: Julian De Freitas and Elie Ofek

October 2024 |
Case |
Faculty Research

Citation

Educators

Lessons from an App Update at Replika AI: Identity Discontinuity in Human-AI Relationships

By: Julian De Freitas, Noah Castelo, Ahmet Uğuralp and Zeliha Uğuralp

2024 |
Working Paper |
Faculty Research

Can consumers form deep emotional bonds with AI and be vested in AI identities over time? We leverage a natural app-update event at Replika AI, a popular US-based AI companion, to shed light on these questions. We find that customers feel closer to their AI companion than even their best human friend. However, after the app removed its erotic role play (ERP) feature, preventing intimate interactions between consumers and chatbots that were previously possible, this event triggered perceptions in customers that their AI companion’s identity had discontinued. This in turn predicted negative consumer welfare and marketing outcomes related to loss, including mourning the loss, and devaluing the ‘new’ AI relative to the ‘original’. Experimental evidence confirms these findings. In short, we quantify the closeness of the relationship with AI companions, measure well-being and marketing impacts of perceived discontinuity in the AI’s identity, show causal evidence that app updates can result in perceptions of the AI’s identity discontinuity, and determine what types of app changes are most likely to elicit these impressions. Our results illustrate the benefits and risks to both consumers and firms associated with the growing prevalence of AI companions.

Keywords: AI and Machine Learning; Welfare; Loss; Well-being; Identity; Perception; Relationships

Citation

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Canary Categories

By: Eric Anderson, Chaoqun Chen, Ayelet Israeli and Duncan Simester

October 2024 |
Article |
Journal of Marketing Research (JMR)

Past customer spending in a category is generally a positive signal of future customer spending. We show that there exist “canary categories” for which the reverse is true. Purchases in these categories are a signal that customers are less likely to return to that retailer. We demonstrate the robustness of this finding at two retailers. We propose an explanation for the existence of canary categories and then develop a stylized model that illustrates four contributing factors: the probability a customer finds their favorite brand, customers’ willingness to substitute brands, the cost and attractiveness of visiting other stores, and expectations about future brand availability. We use both field data and experiments to investigate these factors. The findings suggest that canary categories exist (at least in part) because store assortments are not completely adjusted to local preferences. An implication is that canary categories are endogenous to each retailer; the same category may be a canary category at one retailer and a destination category at a competing retailer.

Keywords: Churn; Churn Management; Churn/retention; Assortment Planning; Retail; Retailing; Retailing Industry; Preference Heterogeneity; Assortment Optimization; Customers; Retention; Consumer Behavior; Forecasting and Prediction; Retail Industry

Citation

Find at Harvard

Purchase

AI Wants to Make You Less Lonely. Does It Work?

By: Julian De Freitas

September 23, 2024 |
Article |
Wall Street Journal

Keywords: AI and Machine Learning; Well-being

Citation

Find at Harvard

Read Now

Assessing the Value of Unifying and De-duplicating Customer Data Spreadsheet Supplement

By: Elie Ofek

September 2024 |
Supplement |
Faculty Research

Citation

Purchase

Assessing the Value of Unifying and De-duplicating Customer Data

By: Elie Ofek and Hema Yoganarasimhan

September 2024 |
Exercise |
Faculty Research

This exercise provides an opportunity for students to gain hands on experience with assessing the value of unifying various customer databases that a firm may have (e.g., across the different brands it markets) and of properly identifying customers to avoid duplication and misclassifications. It further provides an example of evaluating the ROI on a marketing intervention, and quantifying the implications of properly accounting for various customer records in the firm’s databases. The exercise breaks down the assessment into several tasks and questions. Taken together, the exercise allows for a demonstration of the value to marketers of properly identifying and unifying customer records. A Spreadsheet Supplement (HBP 525-701), which should be made available to students along with the exercise, contains the necessary data to conduct the relevant analyses.

Citation

Eat App: Building and Monetizing an End-to-End Dining Experience Solution

By: Elie Ofek and Ahmed Dahawy

September 2024 |
Case |
Faculty Research

Founded in 2015 in Bahrain, Eat App was an up-and-coming player in the global restaurant management software business. In early 2024, having shifted to a product-led growth strategy, the company’s co-founders faced a host of decisions that could greatly impact their annual recurring revenue (ARR) and profits, and hence their ability to fundraise the following year. In particular, an attractive opportunity had emerged with the Four Seasons Hotels and Resorts (Four Seasons). The hospitality chain was considering transitioning its 400 restaurants to Eat App's software. But first, Eat App needed to prove via a pilot that its software could create more value than Four Seasons’ current system (powered by OpenTable). Moreover, the co-founders had to carefully consider the pricing structure to propose and the features to include in the deal for the 400 restaurants. Should all restaurants receive the same software package or should they have the flexibility to choose different features and usage limits? Should certain modules that competitors offered be added and, if so, how should those be priced? How could Eat App ensure the deal was attractive to Four Seasons while still profitable for Eat App? Simultaneously, the co-founders faced a number of additional pricing decisions. One of Eat App’s major cost drivers was sending SMSs on behalf of its restaurant clients. In certain markets, the cost of sending an SMS exceeded the fixed price Eat App charged restaurants, leading to financial losses. This situation prompted the co-founders to consider whether to stick to fixed pricing rates, though possibly having different rates for various groups of countries, or adopt a fully variable pricing model for SMSs. Relatedly, management debated whether to explore more cost-effective messaging alternatives, such as WhatsApp.