Business, Government and the International Economy

Field research supports some current compensation practices but calls others into question

Norton, Michael I., Derek D. Rucker & Cait Lamberton, eds.

The handbook provides a comprehensive overview of consumer psychology, examining cutting-edge research at the individual, interpersonal, and societal levels.

Minimum Advertised Pricing: Patterns of Violation in Competitive Retail Markets

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.

Gupta, SunilShelle M. Santana, & Margaret L. Rodriguez

What should Apple do to continue the early momentum for the adoption and use of Apple Pay?

Why Outlet Stores Exist: Averting Cannibalization in Product Line Extensions

Outlet stores enable firms to expand their markets while increasing new product introductions for their core consumers.

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 firms 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 firms 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.

Plan a Careful Budget, Then Get Ready to Splurge

Do Your Experiential Marketing Moves Produce Enough ROI?

On Friday, February 22, 2019, following an unexpected and disappointing earnings report, The Kraft Heinz Companys stock price fell 27%, wiping out $16 billion in market value. CEO Bernardo Hees had announced that the company had taken a $15.4 billion asset write-down, that the company would be cutting its annual dividend from $2.50 to $1.60 and that it was under SEC investigation for accounting irregularities related to its procurement process. $8.3 billion of the asset write-down was related to a loss in value of the firms intangible assets, specifically its Kraft and Oscar Mayer brands. As Kraft Heinz looked ahead to the future, it was time to recalibrate its brand management strategies. With $50 billion in brand assets remaining on its balance sheet, effectively managing its brands going forward was critical to avoiding another brand asset write-down and to regaining the $8 billion brand value the company had just lost. Was Kraft Heinzs brand asset write-down the beginning of the end of the market dominance of Big Food brands across the board or was it idiosyncratic and a result of the firms brand management resources, capabilities, and strategies?

Keywords:brand managementBrand ValueBrand equitymarketing ROIbrand storytellingIntangible assetsMarketingMarketing StrategyBrands and BrandingManagementCorporate StrategyConsumer BehaviorFoodMarketing CommunicationsAdvertisingPrivate EquityConsumer Products IndustryFood and Beverage IndustryUnited StatesNorth America;

ArticleJournal of the Association for Consumer ResearchApril 2019

Rituals and Nuptials: The Emotional and Relational Consequences of Relationship Rituals

Ximena Garcia-Rada, Ovul Sezer andMichael I. Norton

Four studies reveal the benefits of relationship rituals: couples with relationship rituals report more positive emotions and greater relationship satisfaction and commitment than those without them. We show that rituals are crucial for understanding consumption practices in romantic relationships. Using a sample of romantic dyads, we identify a novel moderating role of mutual agreement, such that both members of a couple must agree that they have a ritual: different couples can see the same consumption behavior (e.g., paying for a weekly date night) as either a ritual or a routine, and the benefits accrue only to those couples who jointly view it as a symbolically meaningful ritual. We contribute to the literature on rituals by empirically documenting the relationships between rituals, specific emotions, and relationship satisfaction, and by demonstrating that the same sequence of actions can have different psychological effects due to the role of mutual agreement. Finally, we contribute to research on consumers shared experiences by suggesting a novel mechanism for committing to such experiences: relationship rituals.

Keywords:ritualsRelationship SatisfactionRelationshipsSatisfactionSpendingBehaviorPerceptionEmotions;

Garcia-Rada, Ximena, Ovul Sezer, and Michael I. Norton.Rituals and Nuptials: The Emotional and Relational Consequences of Relationship Rituals.

Journal of the Association for Consumer Research

The case opens in 2017 as Onur Erbay, CEO of HOPI, a multi-vendor loyalty platform, is contemplating a critical decision. The case chronicles the origins of Boyner Group, the parent company of HOPI and a major retailer in Turkey, and development of retail and customer relationship management (CRM) in Turkey over the years. Before HOPI, Boyner Group retailers were unable to trace customers across the Groups brands or form insights about customers preferences and habits beyond what brand-specific CRM and loyalty programs provided data for. HOPI was born as the management team at Boyner Group realized the need to serve the customer holistically; the program was designed as a coalition loyalty program including non-Boyner retailer partners. The case provides a detailed overview of the design choices for HOPIa mobile only app with its own currency, paracik, its revenue model, user experience, and how the company planned to leverage big data to segment the customers for retailers and increase purchasing power for customers. Since its launch in 2015, HOPI had 5.5 million downloads and 300 thousand daily active users browsing campaigns offered by over 116 coalition retailers that ranged from gas stations and cinemas to supermarkets and department stores. In 2017, Erbay, who had ambitions to grow HOPI beyond a loyalty program, was faced with harsh realities: the Turkish market was very price sensitive, several competitors had emerged since HOPIs launch, and several retailers and consumers preferred discounts at the time of purchase instead of earning loyalty points for future purchases. Erbay was also facing pressure from the parent company to make HOPI profitable. Was it time for HOPI to pivot to the discount model and abandon its original concept? HOPI has provided a supplementary data set to allow for a more in-depth analysis of the programs impact on customer behavior and retailer profits. The data covers four years, two years prior to HOPIs start and two years after, for two retailers in the coalition loyalty program. The data set includes all customers and transactions at each of the retailers, the final price paid by each customer, and whether the HOPI app was used as part of the transaction. In all, the data contains approximately 2.7 million transactions for 578,078 unique customers.

Keywords:Loyalty programsmulti-vendor platformretailbig dataCustomer Relationship ManagementMobile TechnologyBusiness ModelData and Data SetsCompetitive StrategyDecision MakingTechnology IndustryRetail IndustryTurkey;

Harvard Business School seeks candidates in all fields for full time positions. Candidates with outstanding records in PhD or DBA programs are encouraged to apply.

Mobile payment apps help us keep track of shared costs but may also frustrate personal relationships. Research into perceived pettiness by Tami Kim, Ting Zhang, and Michael I. Norton.

Branding Sells Cereal, Handbags, and Vacations. Can It Sell a Country?

Countries such as Israel now realize they need to engage in public diplomacy as well as foreign diplomacy, and in place branding, not just political advocacy, says Elie Ofek.

Calculators for Women: When Identity Appeals Provoke Backlash

reKate BaraszLeslie K. JohnandMichael I. Norton

With calculators targeted to women and laundry products aimed at men, examples of identity-based labelingor identity appealsabound in advertising and marketing. Five studies show when and why suc