Sunil Gupta

Edward W. Carter Professor of Business Administration
Chair, General Management Program

Unit: Marketing

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Sunil Gupta is the Edward W. Carter Professor of Business Administration and Chair of the General Management Program at Harvard Business School. He is also the co-chair of the executive programs on Driving Digital and Social Strategy and Competing on Business Analytics and Big Data. In the recent past, he has taught an elective course on Digital Marketing Strategy to MBA students and Advanced Management Program to senior managers. From 2008-2013, he served as the Head of the Marketing Unit. 

Sunil's research interests are in the areas of digital marketing, customer management, pricing, and return on marketing investment. His articles in these areas have won several awards including the 1993, 2002, and 2009 O'Dell Award and the 1998 and 2005 Paul Green Award of the Journal of Marketing Research for the most significant contribution in the field of marketing; the 1998, 2000, and 2003 Marketing Science Institute award for the best paper; the 2004 best paper award for the Journal of Interactive Marketing and the 1999 best paper award for the International Journal of Research in Marketing. Sunil is an area editor for the Journal of Marketing Research and an editorial board member of five major journals.

Sunil is co-author of two books. His recent book, Managing Customers as Investments, was published by the Wharton School Publishing in February 2005. It was selected as the 2006 winner of the annual Berry-AMA book prize for the best book in marketing. In April 2006, this book was also chosen as one of the top 30 business books of the year by Soundview Executive Book Summaries.

Sunil has conducted seminars and consulted with several companies in the US, Canada, Europe, and Asia. As a business expert, he has frequently appeared on several national and international television programs, such as CNN and BBC, and has been quoted in the press. 

Prior to joining Harvard, Sunil was the Meyer Feldberg Professor of Business at Columbia Business School and Assistant Professor at UCLA. In 1996, Sunil spent his sabbatical with McKinsey & Co. 

Sunil holds a Bachelor’s degree in Mechanical Engineering from the Indian Institute of Technology, an MBA from the Indian Institute of Management, and a Ph.D. from Columbia University.

Featured Work

Publications

Books

Journal Articles

  1. The High Price of Customer Satisfaction

    Managers often assume that improving customer satisfaction and financial performance go hand in hand. The reality, however, is much more complex.

    Citation:

    Keiningham, Timothy, Sunil Gupta, Lerzan Aksoy, and Alexander Buoye. "The High Price of Customer Satisfaction." MIT Sloan Management Review 55, no. 3 (Spring 2014). View Details
  2. For Mobile Devices, Think Apps, Not Ads

    Many companies envision mobile ads becoming an integral part of their communications strategies. But there's a growing consensus that ads don't work on mobile devices; consumers just don't like them. Instead of creating tiny banner ads, smart marketers will turn to apps to reach customers and engage them. Effective apps will do one of the following: (1) Add convenience. Banking apps, for example, let people pay their bills online, and airline apps let them check in and monitor the status of their flights. (2) Offer unique value. In South Korea, commuters can use an app to order groceries while waiting for their trains. (3) Provide social value. Apps on Facebook and other sites let users send gifts to their friends. (4) Offer incentives. Apps that give away mobile minutes, for instance, can entice customers. (5) Entertain. Red Bull and other companies have devised popular games focused on their brands. "Mobile advertising" is often a hollow phrase, but mobile apps can enable marketers to communicate with consumers in a format that enhances their lives and offers long-term value.

    Keywords: Software; Advertising; Mobile Technology; Innovation and Invention;

    Citation:

    Gupta, Sunil. "For Mobile Devices, Think Apps, Not Ads." Harvard Business Review 91, no. 3 (March 2013). View Details
  3. The Mobile Banking and Payment Revolution

    Mobile technology is revolutionizing the global banking and payment industry. It offers new opportunities for banks to provide added convenience to their existing customers in developed countries and reach a large population of unbanked customers in emerging markets. However, banks face significant challenges as new players enter these markets and change the ecosystem of the industry. Although no single model has been successfully imported from one country to another due to significant country-specific differences in the regulatory financial infrastructure and customer needs, financial service firms can learn some lessons from the limited success of current approaches to design their strategy in this exciting area.

    Keywords: Emerging Markets; Cross-Cultural and Cross-Border Issues; Mobile Technology; Banks and Banking; Banking Industry;

    Citation:

    Gupta, Sunil. "The Mobile Banking and Payment Revolution." European Financial Review (February–March 2013), 3–6. View Details
  4. E-Commerce in Asia: Challenges and Opportunities

    Asia is becoming increasingly attractive to businesses, especially to e-commerce firms that thrive on global and scalable business models. Yet, most global e-commerce players, with a few exceptions, have failed to achieve significant success in Asia. This article describes five major challenges that e-commerce firms face in emerging Asian markets.

    Keywords: Asia;

    Citation:

    Gupta, Sunil, and Tanya Bijlani. "E-Commerce in Asia: Challenges and Opportunities." Asia Business Insights (2012). View Details
  5. Customer-Based Valuation

    Customer lifetime value (CLV) has emerged as an important metric to manage and grow customers. Marketing scholars have written many books and articles on this topic. However, most of this research has focused on tactical marketing decisions. While this is important, it is not enough to gain attention of senior managers who are concerned about firm level metrics such as stock price. To have greater impact marketing needs to go beyond brand-level profits to show the impact of marketing actions on firm profitability. In this paper we focus on customer lifetime value and its link to firm value. We discuss research that provides customer-based valuation of firms and suggest directions for future research.

    Keywords: Customers; Valuation;

    Citation:

    Gupta, Sunil. "Customer-Based Valuation." Journal of Interactive Marketing 23, no. 2 (May 2009): 169–178. View Details
  6. A Model of Consumer Learning for Service Quality and Usage

    In many services, e.g., the wireless service industry, consumers choose a service plan based on their expected consumption. In such situations, consumers experience two forms of uncertainty. First, consumers may be uncertain about the quality of their service provider and can learn about it after repeated use of the service. Second, consumers can be uncertain about their own usage of minutes and learn about it after observing their actual consumption. We propose a model to capture this dual learning process while accounting for the nonlinearity of the pricing scheme used in wireless services. Our results show that both quality and quantity learning are important. Several policy experiments are conducted to capture the effect of consumer learning, pricing and service quality on customer lifetime value (CLV). We find that consumer learning can result in a win-win situation for both consumers and firm -- consumers leave less minutes on the table while the firm sees an increase in overall customer lifetime value. For instance, we find that there is a 35% increase (about $75) in overall CLV with consumer learning than without. The key driver of this result is the change in the retention rate with and without learning.

    Keywords: Experience and Expertise; Customer Value and Value Chain; Learning; Price; Knowledge Use and Leverage; Marketing Strategy; Consumer Behavior; Service Delivery; Quality; Risk and Uncertainty; Service Industry;

    Citation:

    Iyengar, Raghuram, Asim Ansari, and Sunil Gupta. "A Model of Consumer Learning for Service Quality and Usage." Journal of Marketing Research (JMR) 44, no. 4 (November 2007): 529–544. View Details
  7. Modeling Customer Lifetime Value

    Keywords: Customers; Value;

    Citation:

    Gupta, Sunil, Dominique Hanssens, Bruce Hardie, Wiliam Kahn, V. Kumar, Nathaniel Lin, Nalini Ravishanker, and S. Sriram. "Modeling Customer Lifetime Value." Journal of Service Research 9, no. 2 (November 2006): 139–155. View Details
  8. Detection Defection: Measuring and Understanding the Predictive Accuracy of Customer Churn Models

    Keywords: Measurement and Metrics; Forecasting and Prediction; Customers;

    Citation:

    Neslin, Scott, Sunil Gupta, Wagner Kamakura, Junxiang Lu, and Charlotte Mason. "Detection Defection: Measuring and Understanding the Predictive Accuracy of Customer Churn Models." Journal of Marketing Research (JMR) 43, no. 2 (May 2006): 204–211. View Details
  9. Choice and the Internet: From Clickstream to Research Stream

    Keywords: Decision Choices and Conditions; Online Technology; Research;

    Citation:

    Bucklin, Randolph E., James Lattin, Asim Ansari, David Bell, Eloise Coupey, Sunil Gupta, John D.C. Little, Carl Mela, Alan Montgomery, and Joel Steckel. "Choice and the Internet: From Clickstream to Research Stream." Marketing Letters 10, no. 3 (August 1999): 245–258. View Details
  10. Managing Advertising and Promotion for Long-Run Profitability

    Keywords: Management; Advertising; Profit;

    Citation:

    Jedidi, Kamel, Carl F. Mela, and Sunil Gupta. "Managing Advertising and Promotion for Long-Run Profitability." Marketing Science 18, no. 1 (1999): 1–22. (Winner of Marketing Science Institute Best Paper Award To honor the authors of the MSI working papers that have made the most significant contribution to marketing practice and thought presented by Marketing Science Institute.) View Details
  11. Modelling the Effect of Purchase Quantity on Consumer Choice of Product Assortment

    Keywords: Sales; Decision Choices and Conditions; Customers; Product;

    Citation:

    Bucklin, Randolph E., Sunil Gupta, and S. Siddarth. "Modelling the Effect of Purchase Quantity on Consumer Choice of Product Assortment." Journal of Forecasting 17, nos. 3-4 (June–July 1998): 281–301. View Details
  12. Assessing Long-Term Promotional Influences on Market Structure

    Keywords: Power and Influence; Markets; Product Marketing;

    Citation:

    Mela, Carl, Sunil Gupta, and Kamel Jedidi. "Assessing Long-Term Promotional Influences on Market Structure." International Journal of Research in Marketing 15, no. 2 (May 1998): 89–108. (Winner of International Journal of Research in Marketing. Best Paper Award.) View Details
  13. Perspectives on Multiple Category Choice

    Keywords: Decision Choices and Conditions; Perspective;

    Citation:

    Russell, Gary, David Bell, Anand Bodapati, Christina Brown, Joengwen Chiang, Gary Gaeth, Sunil Gupta, and Puneet Manchanda. "Perspectives on Multiple Category Choice." Marketing Letters 8, no. 3 (August 1997): 297–305. View Details
  14. Long Term Impact of Promotion and Advertising on Consumer Brand Choice

    Keywords: Product Marketing; Advertising; Brands and Branding; Decision Choices and Conditions; Customers;

    Citation:

    Mela, Carl, Sunil Gupta, and Donald R. Lehmann. "Long Term Impact of Promotion and Advertising on Consumer Brand Choice." Journal of Marketing Research (JMR) 34 (May 1997): 248–261. (

    Winner of American Marketing Association. Marketing Communications Special Interest Group Best Paper Award presented by American Marketing Association. Winner of Marketing Science Institute Best Paper Award To honor the authors of the MSI working papers that have made the most significant contribution to marketing practice and thought presented by Marketing Science Institute. Winner of Paul E. Green Award For the best article in the Journal of Marketing Research that demonstrates the greatest potential to contribute significantly to the practice of marketing research presented by American Marketing Association Foundation. Winner of William F. O'Dell Award For the Journal of Marketing Research article that has made the most significant, long-term contribution to marketing theory, methodology, and/or practice presented by American Marketing Association​

    .) View Details
  15. A Brand's Eye View of Response Segmentation in Consumer Choice Behavior

    Keywords: Brands and Branding; Segmentation; Decision Choices and Conditions; Customers; Behavior;

    Citation:

    Bucklin, Randolph E., Sunil Gupta, and Sangman Han. "A Brand's Eye View of Response Segmentation in Consumer Choice Behavior." Journal of Marketing Research (JMR) 32 (February 1995): 66–74. View Details
  16. Issues in the Estimation and Application of Latent Structure Models of Choice

    Keywords: Decision Choices and Conditions;

    Citation:

    Bockenholt, Ulf, Melinda S. de Borrero, Ham Bozdogan, Wayne DeSarbo, William R. Dillon, Sunil Gupta, Wagner Kamakura, Ajith Kumar, V. Ramaswamy, and Michael Zenor. "Issues in the Estimation and Application of Latent Structure Models of Choice." Marketing Letters 5, no. 4 (October 1994): 323–334. View Details
  17. Brand Choice, Purchase Incidence, and Segmentation: An Integrated Modeling Approach

    Keywords: Brands and Branding; Decision Choices and Conditions; Sales; Segmentation;

    Citation:

    Bucklin, Randolph E., and Sunil Gupta. "Brand Choice, Purchase Incidence, and Segmentation: An Integrated Modeling Approach." Journal of Marketing Research (JMR) 29 (May 1992): 201–215. (Finalist for the 1997 O'Dell Award, Journal of Marketing Research.) View Details
  18. Impact of Sales Promotions on When, What, and How Much to Buy

    Keywords: Sales; Product Marketing;

    Citation:

    Gupta, Sunil. "Impact of Sales Promotions on When, What, and How Much to Buy." Journal of Marketing Research (JMR) 25 (November 1988): 342–355. (

    Winner of William F. O'Dell Award For the Journal of Marketing Research article that has made the most significant, long-term contribution to marketing theory, methodology, and/or practice presented by American Marketing Association​

    .) View Details

Book Chapters

  1. Nonlinear Pricing

    A nonlinear pricing schedule refers to any pricing structure where the total charges payable by customers are not proportional to the quantity of their consumed services. We begin the chapter with a discussion of the broad applicability of nonlinear pricing schemes. We note that the primary factor for the use of such schemes is the heterogeneity of the customer base. Such heterogeneity of preferences leads customers to choose different pricing plans based on their expected demand. We describe past analytical and empirical research. Past analytical work is categorized based on whether it is in a monopoly setting or a more general oligopoly context. Most past research has found two-part tariffs to be optimal in many settings. More recent research has begun to investigate the limits of such optimality and when a more general pricing scheme can be optimal. In the summary of empirical research on multi-part tariffs, we note that while nonlinear pricing schemes are popular, any analysis of demand under such schemes is nontrivial. One important reason is the two-way relationship between price and consumption in multi-part tariffs—the pricing scheme influences consumption, and the level of consumption determines the applicable per-unit price. We describe how researchers have addressed this and other such issues and then show a modeling framework that integrates all the issues. We end by discussing empirical generalizations, which also suggest some promising areas for future research.

    Keywords: Price; Demand and Consumers; Duopoly and Oligopoly; Monopoly; Service Operations; Research;

    Citation:

    Iyengar, Raghuram, and Sunil Gupta. "Nonlinear Pricing." In Handbook of Pricing Research in Marketing, edited by Vithala Rao. MA: Edward Elgar Publishing, 2009. View Details
  2. Allocating Marketing Resources

    Companies spend billions of dollars on marketing every year because it is essential to organic growth. Given these large investments, marketing managers have the responsibility to optimally allocate resources and to demonstrate that their investments generate suitable returns for the firm.

    In this chapter we highlight a two-stage process for making and justifying marketing allocation decisions. In stage one, a model of demand is estimated. This model empirically assesses the impact of marketing actions on consumer demand for a company's product. In stage two, estimates from the demand model are used as input in an optimization model that attempts to maximize profits. This stage takes into account costs as well as firm's objectives and constraints (e.g., minimum market share requirement).

    Over the last several decades, various methods that follow these two stages, either implicitly or explicitly, have been developed. We categorize these techniques in a three-by-three matrix, which suggests three different methods for stage-one demand estimation (decision calculus, experiments, and econometric methods) and three different methods for stage-two economic impact analysis (descriptive, what-if, and formal optimization approach). We discuss pros and cons of each method and provide illustrations through applications and case studies.

    Keywords: Investment Return; Resource Allocation; Marketing; Demand and Consumers; Mathematical Methods;

    Citation:

    Gupta, Sunil, and Thomas J. Steenburgh. "Allocating Marketing Resources." In Marketing Mix Decisions: New Perspectives and Practices, edited by Roger A. Kerin and Rob O'Regan. Chicago, IL: American Marketing Association, 2008. View Details

Working Papers

  1. Separating Homophily and Peer Influence with Latent Space

    We study the impact of peer behavior on the adoption of mobile apps in a social network. To identify social influence properly, we introduce latent space as an approach to control for latent homophily, the idea that "birds of a feather flock together." In a series of simulations, we show that latent space coordinates significantly reduce bias in the estimate of social influence. The intuition is that latent coordinates act as proxy variables for hidden traits that give rise to latent homophily. The approach outperforms existing methods such as including observed covariates, random effects, or fixed effects. We then apply the latent space approach to identify social influence on installation of mobile apps in a social network. We find that peer influence accounts for 27% of mobile app adoptions, and that latent homophily inflates this estimate by 40% (to 38%). In some samples, ignoring latent homophily can result in overestimation of social effects by over 100%.

    Keywords: social influence; social network; mobile app; peer effects; latent homophily; latent space; proxy variables; Familiarity; Behavior; Consumer Behavior; Software; Social and Collaborative Networks; Mobile Technology; Power and Influence;

    Citation:

    Davin, Joseph P., Sunil Gupta, and Mikolaj Jan Piskorski. "Separating Homophily and Peer Influence with Latent Space." Harvard Business School Working Paper, No. 14-053, January 2014. View Details
  2. Managing Churn to Maximize Profits

    Customer defection or churn is a widespread phenomenon that threatens firms across a variety of industries with dramatic financial consequences. To tackle this problem, companies are developing sophisticated churn management strategies. These strategies typically involve two steps — ranking customers based on their estimated propensity to churn, and then offering retention incentives to a subset of customers at the top of the churn ranking. The implicit assumption is that this process would maximize a firm's profits by targeting customers who are most likely to churn. However, current marketing research and practice aims at maximizing the correct classification of churners and non-churners. Profit from targeting a customer depends on not only a customer's propensity to churn, but also on her spend or value, her probability of responding to retention offers, as well as the cost of these offers. Overall profit of the firm also depends on the number of customers the firm decides to target for its retention campaign. We propose a predictive model that accounts for all these elements. Our optimization algorithm uses stochastic gradient boosting, a state-of-the-art numerical algorithm based on stage-wise gradient descent. It also determines the optimal number of customers to target. The resulting optimal customer ranking and target size selection leads to, on average, a 115% improvement in profit compared to current methods. Remarkably, the improvement in profit comes along with more prediction errors in terms of which customers will churn. However, the new loss function leads to better predictions where it matters the most for the company's profits. For a company like Verizon Wireless, this translates into a profit increase of at least $28 million from a single retention campaign, without any additional implementation cost.

    Keywords: Churn Management; Defection Prediction; Loss Function; Stochastic Gradient Boosting; Customer Relationship Management; Consumer Behavior; Profit;

    Citation:

    Lemmens, Aurelie, and Sunil Gupta. "Managing Churn to Maximize Profits." Harvard Business School Working Paper, No. 14-020, September 2013. View Details
  3. Do Display Ads Influence Search?: Attribution and Dynamics in Online Advertising

    As firms increasingly rely on online media to acquire consumers, marketing managers feel comfortable justifying higher online marketing spend by referring to online metrics such as click-through rate (CTR) and cost per acquisition (CPA). However, these standard online advertising metrics are plagued with attribution problems and do not account for dynamics. These issues can easily lead firms to overspend on some actions and thus waste money, and/or underspend in others, leaving money on the table. We develop a multivariate time series model to investigate the interaction between paid search and display ads, and calibrate the model using data from a large commercial bank that uses online ads to acquire new checking account customers. We find that display ads significantly increase search conversion. Both search and display ads also exhibit significant dynamics that improve their effectiveness and ROI over time. Finally, in addition to increasing search conversion, display ad exposure also increases search clicks, thereby increasing search advertising costs. After accounting for these three effects, we find that each $1 invested in display and search leads to a return of $1.24 for display and $1.75 for search ads, which contrasts sharply with the estimated returns based on standard metrics. We use these results to show how optimal budget allocation may shift dramatically after accounting for attribution and dynamics. Although display benefits from attribution, the strong dynamic effects of search call for an increase in search advertising budget share by up to 36% in our empirical context.

    Keywords: Search Technology; Online Advertising;

    Citation:

    Kireyev, Pavel, Koen Pauwels, and Sunil Gupta. "Do Display Ads Influence Search? Attribution and Dynamics in Online Advertising." Harvard Business School Working Paper, No. 13-070, February 2013. View Details
  4. Do Friends Influence Purchases in a Social Network?

    Social networks, such as Facebook and Myspace have witnessed a rapid growth in their membership. Some of these businesses have tried an advertising-based model with very limited success. However, these businesses have not fully explored the power of their members to influence each other's behavior. This potential viral or social effect can have significant impact on the success of these companies as well as provide a unique new marketing opportunity for traditional companies.

    However, this potential is predicated on the assumption that friends influence user's behavior. In this study we empirically examine this issue. Specifically we address three questions - do friends influence purchases of users in an online social network; which users are more influenced by this social pressure; and can we quantify this social influence in terms of increase in sales and revenue.

    To address these questions we use data from Cyworld, an online social networking site in Korea. Cyworld users create mini-homepages to interact with their friends. These mini-homepages, which become a way of self-expression for members, are decorated with items (e.g., wallpaper, music), many of which are sold by Cyworld. Using 10 weeks of purchase and non-purchase data from 208 users, we build an individual level model of choice (buy-no buy) and quantity (how much money to spend). We estimate this model using Bayesian approach and MCMC method.

    Our results show that there are three distinct groups of users with very different behavior. The low-status group (48% of users) are not well connected, show limited interaction with other members and are unaffected by social pressure. The middle-status group (40% users) is moderately connected, show reasonable non-purchase activity on the site and have a strong and positive effect due to friends' purchases. In other words, this group exhibits "keeping up with the Joneses" behavior. On average, their revenue increases by 5% due to this social influence. The high-status group (12% users) is well connected and very active on the site, and shows a significant negative effect due to friends' purchases. In other words, this group differentiates itself from others by lowering their purchase and strongly pursuing non-purchase related activities. This social influence leads to almost 14% drop in the revenue of this group. We discuss the theoretical and managerial implications of our results.

    Keywords: Marketing; Network Effects; Sales; Power and Influence; Social and Collaborative Networks; Web Sites; South Korea;

    Citation:

    Iyengar, Raghuram, Sangman Han, and Sunil Gupta. "Do Friends Influence Purchases in a Social Network?" Harvard Business School Working Paper, No. 09-123, April 2009. View Details
  5. Allocating Marketing Resources

    Marketing is essential for the organic growth of a company. Not surprisingly, firms spend billions of dollars on marketing. Given these large investments, marketing managers have the responsibility to optimally allocate these resources and demonstrate that these investments generate appropriate returns for the firm. In this chapter we highlight a two-stage process for marketing resource allocation. In stage one, a model of demand is estimated. This model empirically assesses the impact of marketing actions on consumer demand of a company's product. In stage two, estimates from the demand model are used as input in an optimization model that attempts to maximize profits. This stage takes into account costs as well as firm's objectives and constraints (e.g., minimum market share requirement). Over the last several decades, marketing researchers and practitioners have adopted various methods and approaches that explicitly or implicitly follow these two stages. We have categorized these approaches into a 3x3 matrix, which suggests three different approaches for stage-one demand estimation (decision calculus, experiments and econometric methods), and three different methods for stage-two economic impact analysis (descriptive, what-if and formal optimization approach). We discuss pros and cons of these approaches and illustrate them through applications and case studies.

    Keywords: Investment Return; Resource Allocation; Marketing; Demand and Consumers; Mathematical Methods;

    Citation:

    Gupta, Sunil, and Thomas J. Steenburgh. "Allocating Marketing Resources." Harvard Business School Working Paper, No. 08-069, February 2008. View Details
  6. The Value of a 'Free' Customer

    Central to a firm's growth and marketing policy is the revenus and profit potential of its customer assets. As a result, there has been a recent proliferation of work regarding customer lifetime value. However, extant research in this area is silent regarding how to assess the profitability of customers in a networked setting. In such settings, the presence of one type of customer can affect the value of another. Examples of such settings include job agencies (whose customers include both job seekers and listers), realtors (whose clients include home sellers and purchasers), and auction houses (whose customers include buyers and sellers). Customers such as buyers of an auction house pay no fees to the firm making their value difficult to compute. Yet these customers generate value to the firm because their presence attracts fee-paying sellers. In this paper we consider the value of a customer in these types of networked setting.

    We compute the value of customers by developing a joint model of buyer and seller growth. This growth comes from three sources — marketing actions (price and advertising), direct network effects (e.g., buyer to buyer effects), and indirect network effects (e.g., buyer to seller effects). Using this growth model we concurrently solve the firm's problem of choosing optimal pricing and advertising subject to constraints on customer growth. By relaxing constraints on growth by one customer, we can then impute their lifetime value to the firm. We apply our model to data from an auction house.

    Our results show that there are strong direct and indirect network effects present in our data. We find that in the most recent period buyers have a value of about $550 and the sellers have a value of around $500. We also find that our approach leads to estimates of firm value that are more accurate than models that fail to consider network effects. Finally, price and advertising elasticities are low (-0.16 and 0.006) and decrease over time as network effects become increasingly important.

    Keywords: Customer Value and Value Chain; Auctions; Network Effects; Business Strategy;

    Citation:

    Gupta, Sunil, Carl F. Mela, and Jose M. Vidal-Sanz. "The Value of a 'Free' Customer." Harvard Business School Working Paper, No. 07-035, December 2006. View Details

Cases and Teaching Materials

  1. Reinventing Adobe

    By 2013, Adobe had reinvented itself from a publisher of popular software such as Photoshop and Acrobat to a digital marketing and digital media company. In May 2013, the company decided to stop selling its software as a package in favor of Creative Cloud where consumers paid a monthly subscription fee. Within a few weeks thousands of consumers signed a petition complaining against this decision. Should Adobe reverse its decision? More generally, what new skills and capabilities does it need to develop as it reinvents itself?

    Citation:

    Gupta, Sunil, and Lauren Barley. "Reinventing Adobe." Harvard Business School Case 514-066, January 2014. View Details
  2. Amazon in 2014

    By 2013, Amazon had become one of the world's largest e-commerce players with over $60 billion in annual sales. Although its profitability had been uneven even after 18 years since its inception, its stock price had risen almost 17,000% since the company went public. During this time Amazon has spread its business across a variety of products and services that some see as unrelated. Was Amazon spreading itself too thin or were its investments positioning the company for the future?

    Keywords: Online Technology; Marketing Strategy; Competitive Advantage; Retail Industry;

    Citation:

    Gupta, Sunil. "Amazon in 2014." Harvard Business School Teaching Note 514-056, October 2013. (Revised July 2014.) View Details
  3. Amazon in 2014

    By 2013, Amazon had become one of the world's largest e-commerce players with over $60 billion in annual sales. Although its profitability had been uneven even after 18 years since its inception, its stock price had risen almost 17,000% since the company went public. During this time Amazon has spread its business across a variety of products and services that some see as unrelated. Was Amazon spreading itself too thin or were its investments positioning the company for the future?

    Keywords: e-commerce; publishing;

    Citation:

    Gupta, Sunil, and Margaret L. Rodriguez. "Amazon in 2014." Harvard Business School Case 514-025, August 2013. (Revised July 2014.) View Details
  4. YouTube Channels

    In December 2011 YouTube launched a website redesign that made Channels the central focus of the site. This redesign was the company's first foray into a strategy designed to foster long-form user engagement. YouTube invested $100 million in 100 Channels, often created by high-profile celebrities. YouTube hoped that original content would bring users to the site for longer periods of time, as well as allow YouTube to compete with Netflix, Hulu, Amazon and cable TV. Could YouTube compete with video subscription services and cable TV networks?

    Keywords: Competition; Online Technology; Entertainment; Growth and Development Strategy; Entertainment and Recreation Industry; Media and Broadcasting Industry;

    Citation:

    Gupta, Sunil, and Dharmishta Rood. "YouTube Channels." Harvard Business School Case 513-078, February 2013. View Details
  5. Groupon (TN)

    On November 4, 2011, Groupon, a marketing services company that promoted local businesses by selling deeply discounted vouchers for their products and services, completed its initial public offering that valued the company at $17 billion. Within a year Groupon's share price tumbled dramatically as the novelty for consumers started to wear off and merchants began to question the value of Groupon for their businesses. Is Groupon good for merchants? What are the future prospects for Groupon?

    Keywords: marketing; social networking; media; technology; strategy; Business Growth and Maturation; Marketing Strategy; Marketing; Online Technology; Retail Industry; Service Industry; Technology Industry; North America; United States;

    Citation:

    Gupta, Sunil, Ray Weaver, and Yien Hao Lock. "Groupon (TN)." Harvard Business School Teaching Note 513-046, November 2012. View Details
  6. Are Daily Deals Good for Merchants?

    In the relatively short time since Groupon was founded, the response to "daily deals"—services that promote businesses by marketing deeply discounted, pre-paid vouchers to an online subscriber base—has by all accounts been spectacular. Our evaluation of daily deals is a cautionary tale for merchants: a substantial percentage are unlikely to benefit, and might well lose money, by using this type of campaign. But a careful analysis of the right data provides clear indicators of both what types of merchants are likeliest to benefit, and which factors that influence profits should receive the most management attention.

    Keywords: marketing; technology; Business Strategy; digital; Marketing Strategy; Web Services Industry;

    Citation:

    Gupta, Sunil, Timothy Keiningham, Ray Weaver, and Luke Williams. "Are Daily Deals Good for Merchants?" Harvard Business School Background Note 513-059, December 2012. View Details
  7. TripAdvisor (TN)

    By 2010, TripAdvisor (TA) was the largest travel site in the world operating in 24 countries and 16 languages, with listings for 455,000 hotels, 92,000 attractions and 564,000 restaurants in over 71,000 destinations worldwide. It had over 40 million reviews from 35 million unique monthly visitors who were contributing 21 new reviews every minute.
Known for its hotel reviews, TA expanded into flights, vacation rentals and international markets like China. Each of these expansion paths provided unique opportunities as well as new challenges. In August 2010, Stephen Kaufer, CEO, was debating how to prioritize his growth plans for the company.

    Keywords: marketing; digital marketing; Marketing Strategy; Internet; Search Technology; Online Technology; Travel Industry; Tourism Industry; China; United States;

    Citation:

    Gupta, Sunil. "TripAdvisor (TN)." Harvard Business School Teaching Note 512-108, June 2012. (Revised October 2012.) View Details
  8. Bank of America: Mobile Banking

    In January 2010, Jen McDonald, head of Bank of America Corporation's (BAC) Digital Marketing group, was discussing the bank's mobile strategy with Douglas Brown, senior vice president, Mobile Product Development. BAC launched mobile banking in 2007 and within three years it had four million active customers. This success prompted line-of-business managers to request that Jen and Doug include more functionality in the bank's mobile app that was specific to its businesses, such as credit cards and mortgages. Jen and Doug had to decide how to leverage the mobile platform for the bank's various businesses without creating confusion or increasing complexity for the consumers. Recognizing the potential impact mobile technology could have on the entire banking industry, they also had to decide on how to position BAC's mobile banking in the long run.

    Keywords: marketing; digital marketing; financial services; mobile banking; channels; strategy; Marketing Strategy; Service Delivery; Mobile Technology; Banks and Banking; Banking Industry; United States;

    Citation:

    Gupta, Sunil, and Kerry Herman. "Bank of America: Mobile Banking." Harvard Business School Case 510-063, March 2010. (Revised November 2012.) View Details
  9. Bank of America: Mobile Banking and Bank of America: Mobile Banking (Abridged) (TN)

    Teaching Note for 510063 and 512082

    Keywords: Banks and Banking; Strategy; Customers; Technology Adoption; Decisions; Product Launch; Mobile Technology; Banking Industry;

    Citation:

    Gupta, Sunil. "Bank of America: Mobile Banking and Bank of America: Mobile Banking (Abridged) (TN)." Harvard Business School Teaching Note 511-053, August 2010. (Revised May 2012.) View Details
  10. Bank of America: Mobile Banking (Abridged)

    In January 2010, Bank of America is discussing its future mobile strategy. Should the company add complexity to its app, design multiple apps for business segments, or expand into other mobile channels?

    Keywords: Technology Adoption; Mobile Technology; Banks and Banking; Banking Industry; United States;

    Citation:

    Gupta, Sunil, and Michael Norris. "Bank of America: Mobile Banking (Abridged)." Harvard Business School Case 512-082, April 2012. View Details
  11. BBVA Compass: Marketing Resource Allocation

    BBVA Compass, the 15th largest commercial bank in the U.S., is a part of the BBVA Group of Spain, the second largest bank in Spain with $755 billion in assets. In December 2010, Frank Sottosanti, Chief Marketing Officer of BBVA Compass, was reviewing the marketing performance of the company and deciding how to allocate next year's marketing budget across various offline and online channels.

    Keywords: Advertising; Resource Allocation; Marketing Channels; Marketing Strategy; Performance Evaluation; Banking Industry; United States;

    Citation:

    Gupta, Sunil, and Joseph Davies-Gavin. "BBVA Compass: Marketing Resource Allocation." Harvard Business School Case 511-096, January 2011. (Revised April 2012.) View Details
  12. The New York Times Paywall

    On March 28, 2011, The New York Times website became a restricted site where most of the content was protected behind a "paywall." Users who exceeded the limit of 20 free articles per month were required to pay for either a digital or print subscription. The newspaper industry had been suffering from revenue declines over the past decade, and the transition to digital media was difficult to navigate. Revenues from online advertising were not sufficient to replace the loss of print revenue, and many publishers had explored charging readers for content, with mixed success, where specialized sources like The Wall Street Journal were successfully using the model, but several other general news sites had failed. Newspapers and content creators in general were very interested in understanding whether transitioning to the paywall at the most popular news website would succeed, and whether it could become a blueprint for future success as a sustainable business model. There were several difficult issues to examine in determining the digital strategy for The Times. Would consumers remain as engaged with a site protected by a paywall? Would advertisers react positively to such a move that walled off readers? Would readers value both the print and digital versions of the content, or would it become necessary to create new content? The Times had several choices in designing the paywall, including determining the digital content, pricing, as well as how to interface with readers of secondary news websites like blogs that posted links to news articles. Should they design a "leaky" paywall where determined users could easily slip through, or a "bulletproof" paywall like the Financial Times had done, where users had to pay before they could access any content? What choices would provide the foundation for a successful business model?

    Keywords: Newspapers; Strategy; Journalism and News Industry; Publishing Industry;

    Citation:

    Kumar, Vineet, Bharat Anand, Sunil Gupta, and Felix Oberholzer-Gee. "The New York Times Paywall." Harvard Business School Case 512-077, February 2012. (Revised January 2013.) View Details
  13. Angry Birds

    Within months of its launch in December 2009, Angry Birds, a mobile game created by a small Finnish company, Rovio Entertainment Ltd., became an international hit. By late 2011, Rovio was not only making Angry Birds games for the iPhone, Android and other mobile platforms, but it had also expanded into plush toys, cookbooks, animation videos and licensing arrangement with major brands. With the goal of making Rovio the next Disney, Mikael Hed, CEO of Rovio, was planning to create an Angry Birds movie. Was Angry Birds a fad that would fade away or was Rovio on a path to build a media empire?

    Keywords: Brands and Branding; Marketing Strategy; Diversification; Expansion; Video Game Industry; Finland;

    Citation:

    Gupta, Sunil, and Dharmishta Rood. "Angry Birds." Harvard Business School Case 512-033, March 2012. View Details
  14. Social Media

    This note describes the rapidly changing environment of social media and how managers can leverage it.

    Keywords: Framework; Knowledge Use and Leverage; Situation or Environment; Social and Collaborative Networks;

    Citation:

    Gupta, Sunil, Kristen Amalie Bozzone Armstrong, and Zachary Scott Clayton. "Social Media." Harvard Business School Background Note 510-095, March 2010. (Revised October 2011.) View Details
  15. Groupon

    On November 4, 2011, Groupon, a marketing services company that promoted local businesses by selling deeply discounted vouchers for their products and services, completed its initial public offering that valued the company at $17 billion. Within a year Groupon's share price tumbled dramatically as the novelty for consumers started to wear off and merchants began to question the value of Groupon for their businesses. Is Groupon good for merchants? What are the future prospects for Groupon?

    Keywords: Budgets and Budgeting; Customers; Entrepreneurship; Growth and Development; Marketing Channels; Competitive Strategy; Value Creation;

    Citation:

    Gupta, Sunil, Ray Weaver, and Dharmishta Rood. "Groupon." Harvard Business School Case 511-094, March 2011. (Revised August 2012.) View Details
  16. Take-Two Interactive Software, Inc.

    In September 2010, faced with increasing threat from social game companies such as Zynga, Ben Feder, the CEO of Take-Two Interactive Software. Inc., had to decide the long-term strategy of his video-game company. As a publisher of traditional video games for Xbox 360, PlayStation 3 and Nintendo, Take-Two had several popular video games, such as Grand Theft Auto, to its credit. However, the video game industry was undergoing a major transition. In addition to digital downloading and cloud gaming, casual and social games were transforming the video game industry. Electronic Arts, one of Take-Two's major competitors, acquired a social gaming company in November 2009 for $400 million. In August 2010, Disney bought another social gaming company for $763 million. Social games were developed, marketed and monetized very differently from traditional console games. Should Take-Two follow the lead of its competitors or continue to focus on its core business?

    Keywords: Mergers and Acquisitions; Business Model; Leadership Style; Marketing; Competitive Strategy; Entertainment and Recreation Industry;

    Citation:

    Gupta, Sunil, and Kerry Herman. "Take-Two Interactive Software, Inc." Harvard Business School Case 511-002, October 2010. (Revised May 2011.) View Details
  17. PatientsLikeMe: An Online Community of Patients

    PatientsLikeMe (PLM) is an online community where patients share their personal experiences with a disease, find other patients like them, and learn from each other. The company was founded by Jamie and Ben Heywood when their 29-year-old brother was diagnosed with ALS or Lou Gehrig's disease. In less than five years, PLM has grown to 15 patient communities where over 80,000 patients discuss 19 diseases. In December 2010, PLM is discussing its planned launch of a General Platform that would expand the number of diseases covered from 19 to over 3,500. Is it the right move, and what does PLM need to do to make it a success?

    Keywords: Business Startups; Health Disorders; Knowledge Sharing; Growth and Development Strategy; Product Launch; Market Platforms; Social and Collaborative Networks; Health Industry;

    Citation:

    Gupta, Sunil, and Jason Riis. "PatientsLikeMe: An Online Community of Patients." Harvard Business School Case 511-093, February 2011. (Revised November 2012.) View Details
  18. TripAdvisor

    By 2010, TripAdvisor was the largest travel site in the world operating in 24 countries and 16 languages, with listings for 455,000 hotels, 92,000 attractions and 564,000 restaurants in over 71,000 destinations worldwide. It had over 40 million reviews from 35 million unique monthly visitors who were contributing 21 new reviews every minute. Known for its hotel reviews, TA expanded into flights, vacation rentals and international markets like China. Each of these expansion paths provided unique opportunities as well as new challenges. In August 2010, Stephen Kaufer, CEO, was debating how to prioritize his growth plans for the company.

    Keywords: Business Model; Knowledge Use and Leverage; Growth and Development Strategy; Social and Collaborative Networks; Internet; Service Industry; Travel Industry;

    Citation:

    Gupta, Sunil, and Kerry Herman. "TripAdvisor." Harvard Business School Case 511-004, January 2011. (Revised April 2011.) View Details
  19. Digital Divide

    In November 2010, Charles Henry, chief marketing officer of a major consumer packaged goods company, was trying to convince his senior managers to enhance the digital presence of the company's brands by significantly increasing their online marketing budget. However, he faced strong resistance from many of his colleagues who questioned the tangible value of digital spending.

    Keywords: Budgets and Budgeting; Online Advertising; Marketing Communications; Marketing Strategy; Technology;

    Citation:

    Gupta, Sunil. "Digital Divide." Harvard Business School Case 511-092, December 2010. View Details
  20. YouTube: Time to Charge Users?

    In January 2010, YouTube, the world's largest online video aggregator, was still seeking to become profitable. Was the time right for Google, YouTube's parent company, to charge users seeking to upload content, as some analysts had suggested—and if so, who should be charged how much and for what? Could YouTube charge users for downloading content, a model it was now beginning to test? Or would it be better for the online video giant to continue to pursue an advertising model, but perhaps broaden its services to advertisers? Describes the online video market as of 2010 as well as YouTube's offerings to users, content owners, and advertisers. Provides information on the site's revenues and costs. Also contains detailed data on online video users and usage behavior.

    Keywords: Online Advertising; Business Model; Cost; Profit; Revenue; Consumer Behavior; Internet; Motion Pictures and Video Industry;

    Citation:

    Elberse, Anita, and Sunil Gupta. "YouTube: Time to Charge Users?" Harvard Business School Case 510-053, February 2010. (Revised October 2010.) View Details
  21. Hulu: An Evil Plot to Destroy the World?

    In July 2009, Jason Kilar, the chief executive officer of Hulu, is debating whether the online video aggregator should move away from a purely advertising-supported model, and whether it should participate in an industry-wide initiative to develop and test "authentication" technology that can facilitate a subscription or pay-per-view model. The case traces the early years of Hulu, a joint venture between News Corp. and NBC Universal, that was initially met with strong skepticism but quickly became on the most celebrated and popular online video business. Provides in-depth information on how the company serves content owners, users, and advertisers. Describes the online video space in considerable detail, also covering economic and viewership statistics that enable a rich discussion of viable business models.

    Keywords: Advertising; Business Model; Television Entertainment; Distribution Channels; Service Operations; Internet; Online Technology; Media and Broadcasting Industry; Motion Pictures and Video Industry;

    Citation:

    Elberse, Anita, and Sunil Gupta. "Hulu: An Evil Plot to Destroy the World?" Harvard Business School Case 510-005, October 2009. (Revised June 2010.) View Details
  22. Airline Travel in the U.S.

    How should airlines respond to the rising share of Online Travel Agencies (OTAs) as consumers increasingly search the web to buy tickets?

    Keywords: Management; Marketing Channels; Consumer Behavior; Market Participation; Agency Theory; Online Technology; Aerospace Industry; United States;

    Citation:

    Gupta, Sunil, and Kavita Shukla. "Airline Travel in the U.S." Harvard Business School Background Note 510-096, March 2010. View Details
  23. Backchannelmedia: Making Television 'Clickable'

    Backchannelmedia (BCM), a three-year-old start-up, intended to completely disrupt the world of advertising by transforming the way Americans watched television. BCM had developed a technology to make television "clickable," enabling viewers to interact with the content on their television screens. By April 2009, BCM had conducted consumer studies and field tests and the results were very promising. However, the industry was dominated by large players who could impede the introductions of new technologies. BCM's founders would have to make critical decisions about how quickly to roll out their technology, and to whom. Which industry players were allies? How would BCM monetize the value they would create? Would investors see as much potential in BCM as its founders? And how would the company's cash constraints impact the strategy in the current economic environment?

    Keywords: Entrepreneurship; Investment; Disruptive Innovation; Technological Innovation; Marketing Strategy; Partners and Partnerships; Competition;

    Citation:

    Gupta, Sunil, Kavita Shukla, and Zachary Scott Clayton. "Backchannelmedia: Making Television 'Clickable'." Harvard Business School Case 509-026, April 2009. (Revised August 2009.) View Details
  24. Cyworld: Creating and Capturing Value in a Social Network (TN)

    Teaching Note for [509012].

    Keywords: Value Creation; Social and Collaborative Networks; Mergers and Acquisitions; Revenue; Leadership Style; Decision Choices and Conditions; Online Advertising; Customers; Service Operations; Competency and Skills; Web Services Industry; South Korea;

    Citation:

    Gupta, Sunil, and Sangman Han. "Cyworld: Creating and Capturing Value in a Social Network (TN)." Harvard Business School Teaching Note 510-028, August 2009. View Details
  25. Biocon: Launching a New Cancer Drug in India (TN)

    Teaching Note for [508026].

    Keywords: Product Launch; Market Timing; Price; Distribution Channels; Marketing Strategy; Health Care and Treatment; Biotechnology Industry; Pharmaceutical Industry; India;

    Citation:

    Gupta, Sunil, and Das Narayandas. "Biocon: Launching a New Cancer Drug in India (TN)." Harvard Business School Teaching Note 509-039, January 2009. View Details
  26. Biocon: Launching a New Cancer Drug in India

    Kiran Majumdar-Shaw, the CEO of Biocon has to make product launch timing, pricing, channel, and communications mix decisions relating to the launch of BioMAb, a new cancer drug in India.

    Keywords: Price; Health Care and Treatment; Marketing Strategy; Product Launch; Planning; Biotechnology Industry; Pharmaceutical Industry; India;

    Citation:

    Gupta, Sunil, and Das Narayandas. "Biocon: Launching a New Cancer Drug in India." Harvard Business School Case 508-026, August 2007. (Revised November 2008.) View Details
  27. Cyworld: Creating and Capturing Value in a Social Network

    In May 2008, the new CEO of Cyworld, a social network company in Korea, had to decide how to create and capture value from his rapidly growing user base. Cyworld was founded in 1999, and in 2003 it was acquired by SK Telecom, a leading mobile service provider in Korea. By 2007, Cyworld had 21 million users and $95 million revenue-$65 million from paid items (music, virtual gifts, etc.), $15 million from mobile networking, and $15 million from advertising. The new CEO had to decide which of these three revenue sources he should focus on in the future and how this choice would influence the target customers, the service offerings, and the required capabilities.

    Keywords: Customer Value and Value Chain; Consumer Behavior; Social and Collaborative Networks; Segmentation; Value Creation; South Korea;

    Citation:

    Gupta, Sunil, and Sangman Han. "Cyworld: Creating and Capturing Value in a Social Network." Harvard Business School Case 509-012, November 2008. (Revised November 2008.) View Details

    Research Summary

  1. Digital Marketing

    Companies like Google and Facebook have transformed the interaction between people and firms across almost all industries. Rapid changes in technology and consumer behavior have had profound impact on business practices causing the emergence of radically new businesses and the struggle of incumbents. More than just enabling incremental improvements, digital technology has drastically altered the global economic, political and social landscape. My research examines how digital technology is changing consumer behavior, transforming businesses and influencing society.

    1. American Marketing Association Foundation. 25-Year Consortium Fellow Research Excellence Award: Recognized in 2010 by the American Marketing Association Foundation with the 25-Year Consortium Fellow Research Excellence Award for Scholarly Achievement and Contribution to Marketing Thought and Practice.

    2. Journal of Interactive Marketing. Best Paper Award: Winner of the 2004 Journal of Interactive Marketing Best Paper Award for "Customers As Assets" (with Donald R. Lehmann, winter 2002).

    3. American Marketing Association. Marketing Communications Special Interest Group Best Paper Award: Winner of the 2003 Best Paper Award from the Marketing Communications Special Interest Group of the American Marketing Association for "Long Term Impact of Promotion and Advertising on Consumer Brand Choice" (with Carl Mela and Donald R. Lehmann, Journal of Marketing Research, May 1997).

    4. William F. O'Dell Award: Winner of the 2002 William F. O'Dell Award from the Journal of Marketing Research for "Long Term Impact of Promotion and Advertising on Consumer Brand Choice" (with Carl Mela and Donald R. Lehmann, May 1997).

    5. Marketing Science Institute Best Paper Award: Winner of the 2000 Marketing Science Institute Best Paper Award for "Managing Advertising and Promotion for Long-Run Profitability" (with Kamel Jedidi and Carl F. Mela, Marketing Science, 1999).

    6. Paul E. Green Award: Winner of the 1998 Paul E. Green Award from the Journal of Marketing Research for "Long Term Impact of Promotion and Advertising on Consumer Brand Choice" (with Carl Mela and Donald R. Lehmann, May 1997).

    7. Marketing Science Institute Best Paper Award: Winner of the 1998 Marketing Science Institute Best Paper Award for "Long Term Impact of Promotion and Advertising on Consumer Brand Choice" (with Carl Mela and Donald R. Lehmann, Journal of Marketing Research, May 1997).

    8. International Journal of Research in Marketing. Best Paper Award: Winner of the 1998 Best Paper Award from the International Journal of Research in Marketing for "Assessing Long-Term Promotional Influences on Market Structure" (with Carl Mela and Kamel Jedidi, May 1998)

    9. William F. O'Dell Award: Winner of the 1993 William F. O'Dell Award from the Journal of Marketing Research for "Impact of Sales Promotions on When, What, and How Much to Buy" (November 1988).

    11 Jun 2013
    American Public Media: Marketplace
    12 Feb 2013
    Harvard Business Review
    21 Sep 2012
    MIT Technology Review
    09 Apr 2012
    Time
    01 Mar 2012
    Pravasi Bhartiya
    21 Sep 2011
    CNBC
    11 Oct 2012
    Asia Consumer Summit (event)