Marketing →
- 02 Aug 2011
- Working Paper Summaries
To Groupon or Not to Groupon: The Profitability of Deep Discounts
For consumers, online discount vouchers (like those offered by Groupon.com) have obvious appeal: discounts as large as 90 percent. But for retailers offering the deals through the site, does the publicity compensate for the deep hit to profit margins? This paper sets out to help small businesses decide whether it makes sense to offer discount vouchers. Research was conducted by Harvard Business School professor Ben Edelman, Business Economics PhD candidate Scott Duke Kominers, and by Sonia Jaffe of the Harvard University Department of Economics. Key concepts include: For retailers, discount vouchers provide price discrimination, letting merchants reach customers who know about the business, but wouldn't ordinarily go there without a discount. These vouchers also benefit merchants through advertising, simply by informing consumers of a merchant's existence via e-mail. For some merchants, the benefits of offering discount vouchers are sharply reduced if individual customers buy multiple vouchers. As a marketing tool, discount vouchers are likely to be more effective for businesses that are relatively unknown and have low marginal costs. Closed for comment; 0 Comments.
- 27 Jul 2011
- Research & Ideas
Customer Loyalty Programs That Work
Thanks to ever-improving technology, customer loyalty programs are proving extremely popular among retailers—but merchants are not getting all they should out of them. The reason? Professor José Alvarez says retailers need to see customers as partners, not transactions. Key concepts include: Most retailers are at a very basic level in using loyalty programs, and many customers see the programs as punitive. Successful retailers connect with customers via loyalty programs at three levels starting with an introduction, followed by a retailer-initiated communication, and finally with customer- or retailer-initiated feedback loops. Retailers should ask themselves, How do I create a partnership with the consumer? Data collected from these programs can help merchants make smarter decisions on everything from where to open a new store to pulling the plug on a fading brand. Closed for comment; 0 Comments.
- 20 Jun 2011
- Lessons from the Classroom
Fame, Faith, and Social Activism: Business Lessons from Bono
Many executives struggle to balance work, family, and community, but for rock star Bono the effort is spread across the globe. In the HBS case "Bono and U2," professor Nancy F. Koehn discusses key business lessons to be learned from the famous band. Key concepts include: Take stock of how you are using your funds, your authority, and your people. A leader's mission and purpose isn't static; it evolves. The mission of the CEO should be related to the organization's performance. Who you are and what you stand for as an organization have great relevance to the people who buy your product. Closed for comment; 0 Comments.
- 13 Jun 2011
- HBS Case
Mobile Banking for the Unbanked
A billion people in developing countries have no need for a savings account–but they do need a financial service that banks compete to provide. The new HBS case Mobile Banking for the Unbanked, written by professor Kash Rangan, is a lesson in understanding the real need of customers.
- 14 Feb 2011
- Research & Ideas
Clay Christensen’s Milkshake Marketing
Many new products fail because their creators use an ineffective market segmentation mechanism, according to HBS professor Clayton Christensen. It's time for companies to look at products the way customers do: as a way to get a job done. Closed for comment; 0 Comments.
- 30 Nov 2010
- Working Paper Summaries
Sponsored Links’ or ’Advertisements’?: Measuring Labeling Alternatives in Internet Search Engines
In processing a search for a particular phrase, Internet search engines generally offer two types of results: the algorithmic results, which a search engine selects based on relevance, and the "sponsored links," for which advertisers pay. The latter often occupy prominent screen space. But does the average web surfer realize that they are advertisements? In an online experiment, Harvard Business School professor Benjamin Edelman and doctoral candidate Duncan S. Gilchrist show that "sponsored link" is too vague a term for some users to understand, and that "paid advertisement" is a label that better clarifies the nature of the link. They call on the FTC to compel search engines to improve their disclosures. Key concepts include: Through October 2010, leading search engines Google, Yahoo!, and Bing presented their advertisements with the labels "sponsored links," "sponsored results," and "sponsored sites," respectively. (In November, Google substituted the term "ads.") In an online experiment that replaced these labels with the term "paid advertisement," users were up to 33 percent less likely to click on the sponsored link. Certain categories of users were particularly influenced by the improved label. The improved labels had largest effect on users without college degrees, users with annual income below $100,000, and users who utilize the web less than 12 hours per week. The Federal Trade Commission has called for "clear and conspicuous disclosures" to label search advertisements. Because available evidence suggests users do not understand widely used labels, the researchers believe the FTC should require search engines to use the label "advertisement" or "paid advertisement" rather than vague or easily overlooked alternatives. Closed for comment; 0 Comments.
- 29 Nov 2010
- HBS Case
United Breaks Guitars
A new case coauthored by HBS marketing professor John Deighton and research associate Leora Kornfeld offers an object lesson in the dangers social media can bring for big, recognizable companies and their brands. From the HBS Alumni Bulletin. Open for comment; 0 Comments.
- 15 Nov 2010
- Lessons from the Classroom
Connecting Goals and Go-To-Market Initiatives
In some respects, developing strategy is the easy part. Executing that strategy in alignment with strategic priorities is where real mastery of management takes place. Harvard Business School senior lecturer Frank V. Cespedes shows how it is done. Open for comment; 0 Comments.
- 25 Oct 2010
- HBS Case
Tesco’s Stumble into the US Market
UK retailer Tesco was very successful penetrating foreign markets—until it set its sights on the United States. Its series of mistakes and some bad luck are captured in a new case by Harvard Business School marketing professor John A. Quelch. Key concepts include: Entering the US, Tesco deserves credit for creating a neighborhood market approach—emphasizing fresh produce and meats, and good quality but value-priced prepared meals. By not partnering or hiring local executives, Tesco missed the opportunity to learn more about the habits and needs of target customers. Tesco rightly aimed to scale the concept as soon as possible so that fixed overhead investments in its own distribution centers could be spread across a larger number of stores. Perhaps Tesco's original rollout plan was too ambitious, with executives assuming that the company would get everything right on the first try. Tesco has listened to its customers, learned from its mistakes, and made appropriate midcourse corrections. Closed for comment; 0 Comments.
- 13 Sep 2010
- Research & Ideas
The Consumer Appeal of Underdog Branding
Research by HBS professor Anat Keinan and colleagues explains how and why a "brand biography" about hard luck and fierce determination can boost the power of products in industries as diverse as food and beverages, technology, airlines, and automobiles. Key concepts include: Underdog brand biographies feature two intertwined narrative threads: a seemingly disadvantaged position in the marketplace, coupled with the passion and determination to succeed. Examples of "brands" that emphasize their underdog roots include Apple, Hewlett-Packard, Oprah Winfrey; candidates in the 2008 U.S. presidential election, Nantucket Nectars, and Clif Bar. Underdog brand biographies resonate with consumers during tough economic times like those we live in. Popular stories about underdogs were prevalent during the Great Depression, too, and have been powerful around the world and throughout history. Use brand biographies carefully. Not all products and services are appropriate for underdog narratives. Closed for comment; 0 Comments.
- 16 Aug 2010
- Lessons from the Classroom
HBS Introduces Marketing Analysis Tools for Managers
These tools can help managers make informed decisions on market analysis, breakeven analysis, customer lifetime value, profit and pricing, and analyzing the competitive environment. Interview with Tom Steenburgh. Key concepts include: Immense changes in marketing are driving an increasing need for data analysis. The five HBS-developed tools provide decision-making support for market analysis, breakeven analysis, customer lifetime value, profit and pricing, and analyzing the competitive environment. Open for comment; 0 Comments.
- 05 Aug 2010
- What Do You Think?
What Is Customer Opinion Good For?
Summing Up: Are customer wishes irrelevant when creating a new product? Jim Heskett's readers say it depends on the product, on market goals, and where you are in the development cycle. (Online forum has closed; next forum opens September 2.) Closed for comment; 0 Comments.
- 02 Aug 2010
- Research & Ideas
Modern Indian Art: The Birth of a Market
Before 1995, there was little market for twentieth-century Indian fine art. That's when artists, auction houses, critics, and others defined a new product category—modern Indian fine art—resulting in worldwide demand and soaring prices. Professor Mukti Khaire explains the dynamics behind new market categories. Closed for comment; 0 Comments.
- 07 Jun 2010
- Research & Ideas
Improving Brand Recognition in TV Ads
Advertisers pay millions of dollars to air TV ads that are subsequently ignored by a third of viewers. New research by HBS professor Thales S. Teixeira offers a simple, inexpensive solution for marketers to retain brand recognition. Key concepts include: Repeating or "pulsing" brief images of a brand can significantly reduce the likelihood that viewers will zap it. Altering commercials to mimic a pulsing strategy is a virtually cost-free fix for a significant payoff. Viewers' attention should be managed as any other scarce resource. Closed for comment; 0 Comments.
- 26 Apr 2010
- Research & Ideas
When Other Companies Compete Like Crazy, Dare to Be Different
Eye-catching colors and gee-whiz features aren't enough for successful products and services today. To rise above the "sea of sameness," companies need to be different in a way that is elemental—and game-changing. HBS professor Youngme Moon shares highlights and insights from her new book, Different: Escaping the Competitive Herd. Key concepts include: Companies that follow the usual paths to differentiate their products and services often just imitate competitors. Brand loyalty is harder to come by today because consumers see product categories as a blur of too many choices and not enough differences that matter. Different deconstructs and demystifies companies that are adventurous outliers, mavericks, and iconoclasts. Closed for comment; 0 Comments.
- 22 Feb 2010
- Op-Ed
Tragedy at Toyota: How Not to Lead in Crisis
"Toyota can only regain its footing by transforming itself from top to bottom to deliver the highest quality automobiles," says HBS professor Bill George of the beleaguered automobile company that in recent months has recalled 8 million vehicles. He offers seven recommendations for restoring consumer confidence in the safety and quality behind the storied brand. Key concepts include: Toyota Motor Corporation's problem is first and foremost a leadership crisis. It needs a credible leader with a strong, cohesive plan. Competitors Ford and GM are working to regain the market share they have lost to Toyota. Rather than blame floor mats and panicky drivers, as Toyota did when complaints first arose, it should have acknowledged that its vaunted quality system failed. Toyota should seize the opportunity to make radical changes to renew the company and restore consumers' trust. Closed for comment; 0 Comments.
- 30 Nov 2009
- Research & Ideas
Tracks of My Tears: Reconstructing Digital Music
Record labels have depended on album sales to boost profits. But in the digital music era, consumers prefer single songs over music "bundles." The result? Harvard Business School professor Anita Elberse says it is time for the industry to rethink its products and prices. Key concepts include: The unbundling of albums into a series of separately sold songs on digital music stores is hurting record label profits. Labels are less likely to get away with selling a bundle based on the strength of one or two tracks if the other songs are far less appealing. A strong artist reputation helps to curb the negative impact of unbundling. Labels might consider pushing for higher prices online and generally more flexibility in setting prices. Giving preference to quality over quantity and designing smaller, more consistent bundles may be beneficial. Closed for comment; 0 Comments.
- 18 Nov 2009
- HBS Case
Customer Feedback Not on elBulli’s Menu
The world is beating a path to Chef Ferran Adrià's door at elBulli, but why? In professor Michael Norton's course, students learn about marketing from a business owner who says he doesn't care whether or not customers like his product. Closed for comment; 0 Comments.
- 19 Oct 2009
- Research & Ideas
Why Are Web Sites So Confusing?
Just as bread and milk are often found at far-away ends of the supermarket, Web sites that match consumers with certain products have an incentive to steer users to products that yield the highest margins. The result: a compromise between what users want and what produces the most revenues, say HBS professor Andrei Hagiu and Toulouse School of Economics researcher Bruno Jullien. A look inside the world of search. Key concepts include: "Search diversion"—strategically complicating the search process—began in the brick-and-mortar world. The digital economy provides many more subtle ways to divert search. If an intermediary helped consumers find what they wanted more quickly and efficiently, it would lose valuable potential revenues. On Google, the 11th objective search result might be more relevant than any of the sponsored search results displayed on the right—yet it will be displayed on the second search page only. Closed for comment; 0 Comments.
Perfecting the Project Pitch
Entrepreneurs may be great innovators, but not necessarily great presenters. Associate Professor Thomas Steenburgh teaches them the fine art of product pitching. Key concepts include: Crafting a compelling product pitch can be a difficult process for entrepreneurs who have a technical, engineering, or non-sales background, or another non-sales discipline. A pitch can go awry when the presenter gets too wrapped up in details rather than concentrating on the central idea, or has not thought through the idea enough to really understand it. An audience will give presenters 60 seconds to capture their attention—then they tune out. A key for entrepreneurs pitching their plans is to show passion for the idea and for the audience. Open for comment; 0 Comments.