Department of Marketing & Entrepreneurship

Advertising is often purchased with the expectation that the ads will generate additional social impressions that will justify the high price of advertising. Yet academic research on the effect of advertising on WOM is scarce and shows mixed results. We examine the relationship between monthly Internet and TV advertising expenditures and the total (offline and online) word of mouth (WOM) for 538 U.S. national brands across 16 categories over 6.5 years. We find that the average implied advertising elasticity on total WOM is small: 0.016 for TV, and 0.010 for Internet. Even the categories that have the strongest implied elasticities are only as large as 0.05. Despite this small average effect, we do find that advertising in certain events may produce more desirable amounts of WOM. Specifically, using a synthetic control approach, we find that being a Super Bowl advertiser causes a moderate increase in total WOM that lasts one month. The effect on online posts is larger, but lasts for only three days. We discuss the implications of these findings for managing advertising and WOM.

Nearly all of the products that we consume have been made using a complex process we haven''t seen, in a far-away place we''ve never been, via industrial machinery that we didn''t touch. Thus, most consumers are far removed from the making of the things they buy and use. However, the recent digitization of manufacturing in general and the development of desktop 3D printing in particular enables a growing number of consumers to be exposed to the making process. In this paper, we examine the impact of consumer exposure to 3D printing upon response to products made by this process. Using mindfulness theory as our conceptual lens, we propose that exposure to desktop 3D printing fosters awareness of and attention to the making process, and that this state of mindfulness enhances consumer response to products made using this process. We test this proposition via four experiments. The results of these experiments strongly support our thesis and suggest that exposure to 3D printing enhances making mindfulness, which leads to enhanced product evaluation, greater satisfaction and increased likelihood of word-of-mouth behavior.

There are many cases where the appearance, organization, presentation, and pricing of products make it difficult for shoppers to find what they’re looking for, and limit the consideration of potentially relevant brands. This research attempts to quantify the “shoppability” of product categories and brands through a behavioral analysis of the shopper/shelf interaction. By analyzing the appearance of the shelf, how long customers spend in the category, and the specific patterns of SKU interaction, it is possible to measure the time and effort required to shop identify specific products that are underperforming and make changes to shelf placement and value communication to realize the category’s full sales potential. The presentation will summarize findings from recent field experiments conducted in Europe which measure category and brand shoppability, and test approaches for redesigning the shelf to overcome barriers to purchase.

Personal budgeting is commonly recommended and about half of Americans report doing it, but little systematic evidence exists testing the efficacy of budgeting for attaining financial goals. Drawing on data from three field experiments and analyses of a large secondary data set of transaction and budgeting behavior, we find that while budgeting is helpful in the short run, budgeters are no more likely to attain their financial goals that non-budgeters in the long run. Our results suggest that budgeting decreases the ambiguity with which people view their financial situation. In the short term, this clarity helps people adhere to a spending limit but it can also reduce the enjoyment that people derive from shopping and spending money, which in turn reduces the likelihood that people will continue budgeting. In the longer term, people who track their budgets are more likely to reduce their net spending after periods of overspending than those who do not track their budgets. However, budget trackers are also more likely to overspend after periods of fiscal restraint than those who do not track their budgets. The net effect is that budget trackers are no more likely to attain their financial goals.

Increased sales due to promotions could be at the expense of competitors: such sales come from consumers with relatively weak brand preferences. However, increased sales from brand loyal consumers could well cannibalize sales of the promoted brand. An unintended consequence of promotions is that loyal consumers who otherwise would be willing to pay high prices may strategically stockpile at low prices to reduce their cost. What is its impact on firms'' profits? How should firms adapt their pricing to consumer stockpiling? To answer these questions we analyze an infinite horizon dynamic model of competition under duopoly and derive the Markov Perfect Equilibrium pricing strategies. We find that strategic stockpiling by loyal consumers at low prices does not reduce firms'' long-run profits if initial consumer inventory is zero. We analytically derive an upper bound on the losses that occur following consumer stockpiling and show that it is relatively small. We derive the mixed strategy equilibrium that serves as a guide for managers on how to adapt their pricing strategies to meet the challenge of stockpiling by loyal consumers. When the equilibrium pricing is compared to the situation with no stockpiling, we find that firms move away from frequently promoting below the stockpiling threshold, moreover the probability of charging the reservation price and the price below which consumers start stockpiling increases. Specifically, mass points appear at reservation price and in the interior of the support at stockpiling threshold. Finally, a prediction of our model is a positive inter-temporal correlation in prices implying, somewhat counter-intuitively, that in equilibrium deep promotions are followed by deep promotions.

Research has shown that possessions have the power to change consumers’ self-construal and activate different aspects of the self. Building on this literature, we suggest that the salience of product ownership not only activates the product-related self, but also simultaneously deactivates product-unrelated selves, resulting in impaired performance on tasks unrelated to the activated self. In six experiments, we first elicit feelings of ownership over a product (e.g. a calculator) to activate a product-related identity (e.g., the math-self). Participants then engage in a task that is labeled as being a product-related task (e.g., math task) or a product-unrelated task (e.g., visual task). Despite the task being the same, participants in the ownership condition perform worse on a product-unrelated task than those in the baseline no-ownership condition. Indirect identity accessibility measures provide support for the link between ownership salience and identity activation and deactivation. Support for the underlying activation process also comes from the finding that performance impairment is more likely to hold under conditions of low self-concept clarity, where self-identity is malleable.