Demand and Consumers →
- 25 Jun 2009
- Working Paper Summaries
Why Do Countries Adopt International Financial Reporting Standards?
Why do some countries adopt the European Union (EU)-based International Financial Reporting Standards (IFRS) when others do not? To expand our understanding of the determinants and consequences of IFRS adoption on a global sample, HBS professor Karthik Ramanna and MIT Sloan School of Management coauthor Ewa Sletten studied variations over time in the decision to adopt these standards in more than a hundred non-EU countries. Understanding countries' adoption decisions can provide insights into the benefits and costs of IFRS adoption. Key concepts include: Countries with high quality corporate governance systems and more powerful countries are less likely to adopt IFRS. There are network benefits to IFRS adoption, i.e., the likelihood of IFRS adoption for a given country increases with the number of IFRS adopters in its geographical region and with IFRS adoption among its trade partners. As more countries adopt the international standards, the relative import of network benefits from IFRS adoption (over direct economic benefits) are likely to increase. Similar effects might be seen in the adoption of accounting methods and standards, and of corporate governance best practices by firms and jurisdictions. Closed for comment; 0 Comments.
- 26 May 2009
- Research & Ideas
Improving Market Research in a Recession
At the same time that marketers must pare research expenditures, they face added pressure to secure high-quality data and insights. What's a CMO to do? Ask HBS marketing professor John Quelch. Key concepts include: The degree of uncertainty in business and consumer markets has soared. Most big consumer marketers are seeking to shave 10 to 20 percent off research budgets. CMOs must make every remaining market research dollar count. Closed for comment; 0 Comments.
- 21 May 2009
- Working Paper Summaries
Do Friends Influence Purchases in a Social Network?
In spite of the cultural and social revolution in the rise of social networking sites such as Facebook and MySpace (and in South Korea, Cyworld), the business viability of these sites remains in question. While many sites are attempting to follow Google and generate revenues from advertising, will advertising be effective? If friends influence the purchases of a user in a social network, it could potentially be a significant source of revenue for the sites and their corporate sponsors. Using a unique data set from Cyworld, this study empirically assesses if friends indeed influence purchases. The answer: It depends. Findings are relevant for social networking sites and large advertisers. Key concepts include: There is a significant and positive impact of friends' purchases on the purchase probability of a user. However, there are significant differences across users. Specifically, this social effect is zero for 48 percent of the users, negative for 12 percent of the users, and positive for 40 percent of the users. "Moderately connected" users exhibit "keeping up with the Joneses" behavior. On average, this social influence translates into a 5 percent increase in revenues. Highly connected users tend to reduce their purchases of items when they see their friends buying them. This negative social effect reduces the revenue for this group by more than 14 percent. This finding is consistent with the typical fashion cycle wherein opinion leaders or the elite in the fashion industry tend to abandon one type of fashion and adopt the next in order to differentiate themselves from the masses. Closed for comment; 0 Comments.
- 04 May 2009
- Research & Ideas
What’s Next for the Big Financial Brands
Some of the great financial brands such as Merrill Lynch built trust with customers over decades—but lost it in a matter of months. Harvard Business School marketing professor John Quelch explains where they went wrong, and what comes next. Key concepts include: Turmoil and distrust in the financial services sector is an open invitation to non-financial companies to exploit the brand vacuum created by the demise of the likes of Merrill Lynch and the Royal Bank of Scotland. Financial brands today must address the most basic of consumer concerns: Will my money be safe with this company? Financial brands should continue to advertise but with messages that help customers with recession-relevant product and service offerings. Closed for comment; 0 Comments.
- 06 Apr 2009
- Research & Ideas
Cheers to the American Consumer
The willingness by American consumers to adopt new products, processes, and services more rapidly than those in other countries may be the most important enabler of entrepreneurship and innovation in America, says marketing professor John Quelch. Key concepts include: America's "venturesome consumer" may be the most important enabler of entrepreneurship and innovation in the United States. Six characteristics separate consumers and entrepreneurs in America from those in other countries. Closed for comment; 0 Comments.
- 18 Mar 2009
- Research & Ideas
Marketing After the Recession
This downturn has likely changed people's buying habits in fundamental ways. Professor John Quelch discusses why marketers must start planning today to reach consumers after the recession. Key concepts include: Marketers must think through how the recession has changed consumer preferences and what they think of your brand. Start preparing today by, among other steps, focusing on high-potential customers, assessing your brands, and developing scenarios. Closed for comment; 0 Comments.
- 10 Nov 2008
- What Do You Think?
How Much Can You Ask of Your Customers?
Think of IKEA and eBay. Some popular companies make it easy for customers to become "volunteers" in the organization's success, says HBS professor Jim Heskett. Is there a downside? Or will customer-fueled strategies provide competitive advantage in the future? Online forum now closed. Closed for comment; 0 Comments.
- 29 Oct 2008
- Research & Ideas
The Next Marketing Challenge: Selling to ’Simplifiers’
The mass consumption of the 1990s is fast fading in the rearview mirror. Now a growing number of people want to declutter their lives and invest in experiences rather than things. What's a marketer to do, asks professor John Quelch. Key concepts include: As the world economy slumps, one consumer segment will grow faster than ever: The Simplifiers. Simplifiers present a challenge to marketers. These are well-off people who value quality over quantity and who do not buy proportionately more goods as their net worth increases. Dining out, foreign travel, and learning a new sport will all prove more resilient than expected in the face of recession. Closed for comment; 0 Comments.
- 01 Oct 2008
- Research & Ideas
How Much Time Should CEOs Devote to Customers?
Every corporate mission statement pays lip service to respecting customer needs, but actual customer expertise is typically a mile wide and an inch deep, says Harvard Business School professor John Quelch. Here's why every CEO should spend at least 10 percent of his or her time thinking about, talking to, and steering the organization to the customer. Closed for comment; 0 Comments.
- 10 Sep 2008
- Research & Ideas
Long-Tail Economics? Give Me Blockbusters!
Although the Long Tail theory might argue otherwise, HBS marketing professor John Quelch believes in the power of blockbusters to excite consumers, motivate salespeople, and attract top talent. Key concepts include: In a globally integrated market, blockbuster brands that address common consumer needs are more important than ever. Blockbusters help companies excite consumers, motivate salespeople, and attract top talent. What makes a blockbuster? Size, speed, scarcity, sustainability, sizzle. Closed for comment; 0 Comments.
- 02 Sep 2008
- Research & Ideas
Indulgence vs. Regret: Investing in Future Memories
Good news for makers of $20,000 watches and other luxury goods and services. Recent research from Harvard Business School professor Anat Keinan and a colleague suggest that we often regret not indulging ourselves earlier in life. Key concepts include: People can be too farsighted, or hyperopic, leaving wistful regrets of missing out on life's pleasures when they look back at how they spent their time. It's possible to motivate consumers to indulge themselves by simply asking them what they think they will regret in 10 years. Marketers can convince consumers that buying their product is actually a farsighted behavior, an investment in future memories. Closed for comment; 0 Comments.
- 23 Jun 2008
- Research & Ideas
Innovative Ways to Encourage Personal Savings
Saving money doesn't need to be so difficult. According to HBS professor Peter Tufano, "The most interesting ideas—indeed the oldest—try to make savings a fun or satisfying experience." As Tufano describes in this Q&A, different solutions appeal to different people. Here's what government policy, the private sector, and nonprofits can do. Key concepts include: A variety of levers can be used to support people who want to save (not to force someone to save who doesn't want to). Some levers are simple changes that make the process of savings easier. Other levers involve providing various incentives, be they financial or sociological. The oldest and most interesting ideas try to make savings a fun or satisfying experience. Closed for comment; 0 Comments.
- 16 Jun 2008
- Research & Ideas
Seven Tips for Managing Price Increases
Consumers get hit with the price-increase hammer every time they drive past a gas station. John Quelch offers tips on how marketers can cope with inflation and consumer sticker shock. Closed for comment; 0 Comments.
- 05 May 2008
- Research & Ideas
Connecting with Consumers Using Deep Metaphors
Consumer needs and desires are not entirely mysterious. In fact, marketers of successful brands regularly draw on a rich assortment of insights excavated from research into basic frames or orientations we have toward the world around us, according to HBS professor emeritus Gerald Zaltman and Lindsay Zaltman, authors of Marketing Metaphoria. Here's a Q&A and book excerpt. Key concepts include: Deep metaphors are powerful predictors of what customers think and how they react to new or existing goods and services. The seven deep metaphors discussed in Marketing Metaphoria appear across a variety of products. Recent advances in various disciplines are providing concepts and techniques enabling marketers to dig into what consumers don't know they know. Closed for comment; 0 Comments.
- 18 Mar 2008
- Working Paper Summaries
Modeling Expert Opinions on Food Healthiness: A Nutrition Metric
Despite an increased standard of living in the United States and other developed countries, health problems attributable to poor nutrition persist in part due to consumers' inability to translate the dietary advice of nutrition experts into anything actionable. Citing the improvement of public health as a primary objective, numerous studies have highlighted the need for a nutritional scoring system that is both comprehensive in its coverage of food products and easily understood by consumers. In this paper the researchers advance this objective by proposing a nutrition metric that is based on the current views of leading experts in the field. The metric can be used to score any food or beverage for which several component nutrient quantities are known. Key concepts include: This model encompasses the factors that matter most to the professional judgment of nutrition experts. Previous models focusing solely on either positive or negative nutrients have omitted critical information that experts take into account when assessing a food's healthiness. This model could be used to generate healthiness ratings that are displayed on or near food and beverage labels, allowing consumers to make more informed choices about which products to purchase and consume. Closed for comment; 0 Comments.
- 12 Mar 2008
- Working Paper Summaries
Allocating Marketing Resources
Deciding how to allocate marketing resources is particularly difficult because decisions need to be made at many different levels—across countries, products, marketing mix elements, and different vehicles within elements of the mix (e.g., television versus the Internet for advertising). With the increasing availability of data and sophistication in methods, it is now possible to more judiciously allocate marketing resources. In this paper, HBS professors Gupta and Steenburgh discuss a two-stage process where a model of demand is estimated in stage-one and its estimates are used as inputs in an optimization model in stage-two. The researchers propose a matrix with three approaches for each of these two stages, and discuss the pros and cons of these methods. They highlight each method with applications and case studies to present rigorous yet practical approaches to making marketing resource allocation decisions. Key concepts include: This paper lays out a framework for managers who are responsible for allocating marketing resources for their products and services. Scores of studies in the area of allocating marketing resources now make it possible to form empirical generalizations about the impact of marketing actions on sales and profits. In practical terms, information about marketing resource allocation makes a significant impact at all levels of an organization. Closed for comment; 0 Comments.
- 03 Mar 2008
- Research & Ideas
Marketing Your Way Through a Recession
In a recession, consumers become value oriented, distributors are concerned about cash, and employees worry about their jobs. But a downturn is no time to stop spending on marketing. The key, says professor John Quelch, is to understand how the needs of your customers and partners change, and adapt your strategies to the new reality. Key concepts include: Brands that increase advertising during a downturn can improve market share and return on investment. Early-buy allowances, extended financing, and generous return policies motivate distributors to stock your full product line. In tough times, price cuts attract more consumer support than promotions. CEOs must spend more time with customers and employees. Closed for comment; 0 Comments.
- 20 Nov 2007
- Working Paper Summaries
The “Fees → Savings” Link, or Purchasing Fifty Pounds of Pasta
Discount membership clubs have a large and growing presence in retail—one recent survey reported that Costco sells to 1 in every 11 people in the United States and Canada, and warehouse clubs are estimated to be a $120 billion industry today in the United States alone. As a result, many people have had the experience of entering one of these popular clubs and leaving hours later with more goods than can fit in their car. One rational reason for such behavior is that membership clubs do offer lower prices than other retailers. However, Norton and Lee offer a counterintuitive explanation for such buying behavior. They propose that the presence of membership fees alone—independent of the actual savings on any given product—can lead consumers to infer a "fees → savings" link, leading them to spend more than they otherwise would to capitalize on these perceived "great deals." Norton and Lee explore this phenomenon by setting up their own "membership clubs" and comparing profits across stores with varying membership fees. Key concepts include: Consumers behave irrationally in response to membership fees. When stores charge membership fees, consumers infer a "fees → savings" link due to their belief that stores that charge fees do so because they offer better prices. The presence of fees leads to increased spending. Consumers in the study were more likely to express a desire to shop at stores that charged fees than those that did not, even when products and savings were similar. With exceptions, there may be a curvilinear relationship between fees and savings: fees that are too low serve as a hook to make people pay more later; medium fees indicate good prices and decent quality and service; and high fees signal exclusivity and high prices. Closed for comment; 0 Comments.
- 07 Nov 2007
- Op-Ed
How Marketing Hype Hurt Boeing and Apple
In his latest blog entry, professor John Quelch looks at the examples of Boeing and Apple to investigate why shareholders have little patience for companies that hype high but deliver low. Key concepts include: The penalties for not delivering on marketing promises are fast becoming as significant as not meeting quarterly earnings targets. Do not risk marketing hype unless you are sure of both your supply curve and your demand curve. Hype can hurt stock prices and investor confidence when expectations are not met. Closed for comment; 0 Comments.
Social Network Marketing: What Works?
Purchase decisions are influenced differently in social networks than in the brick-and-mortar world, says Harvard Business School professor Sunil Gupta. The key: Marketers should tap into the networking aspect of sites such as Facebook. Key concepts include: Some social network users are influenced by the purchases of their friends. Of these users, 40 percent show a strong "keeping up with the Joneses" behavior, increasing sales by 5 percent. "High-status" users are more likely to not purchase something that others have bought. On social networks, viral campaigns may work better than advertising. Closed for comment; 0 Comments.