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• Case | HBS Case Collection | June 2014

  Going Social: Durex in China

  Mikolaj Jan Piskorski and Aaron Smith

  When Reckitt Benckiser (RB), a leading consumer goods company, first entered China, it encountered significant challenges. RB's strategy relied on selling high margin products supported by cost-effective advertising and distribution, but the highly competitive Chinese market made it hard to sustain high margins, inflated television advertising rates made marketing expensive, and an inefficient distribution system increased costs further. In 2010, RB managed to overcome these constraints for one of its brands, Durex, the best-selling condom brand in the world, by leveraging Chinese social media platforms and investing in offline and online distribution. The new strategy paid off—Durex condom sales increased threefold in China and market share increased by over 10%. RB now wanted to generate the same results for its other brands in the country, and needed to decide how to balance investments in offline distribution, social media campaigns, and e-commerce in order to keep growing not just in China, but in other emerging markets as well.

  Keywords: Distribution; Multinational Firms and Management; Internet; Marketing Communications; Brands and Branding; Consumer Products Industry; China;

  Citation:

  Piskorski, Mikolaj Jan, and Aaron Smith. "Going Social: Durex in China." Harvard Business School Case 714-430, June 2014.  View Details

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• Book | 2014

  A Social Strategy: How We Profit from Social Media

  Mikolaj Jan Piskorski

  Almost no one had heard of social media a decade ago, but today websites such as Facebook, Twitter, and LinkedIn have more than 1 billion users and account for almost 25 percent of Internet use. Practically overnight, social media seems indispensable to our lives—from friendship and dating to news and business. What makes social media so different from traditional media? Answering that question is the key to making social media work for any business, argues Mikołaj Piskorski, one of the world's leading experts on the business of social media. In A Social Strategy, he provides the most convincing answer yet, one backed by original research, data, and case studies from companies such as Nike and American Express.

  Keywords: Internet; Web; Strategy; Marketing Strategy; Social Marketing;

  Citation:

  Piskorski, Mikolaj Jan. A Social Strategy: How We Profit from Social Media. Princeton University Press, 2014.  View Details

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• Article | International Journal of Industrial Organization | May 2014

  Information and Two-Sided Platform Profits

  Andrei Hagiu and Hanna Halaburda

  We study the effect of different levels of information on two-sided platform profits under monopoly and competition. One side (developers) is always informed about all prices and therefore forms responsive expectations. In contrast, we allow the other side (users) to be uninformed about prices charged to developers and to hold passive expectations. We show that platforms with more market power (monopoly) prefer facing more informed users. In contrast, platforms with less market power (i.e., facing more intense competition) have the opposite preference: they derive higher profits when users are less informed. The main reason is that price information leads user expectations to be more responsive and therefore amplifies the effect of price reductions. Platforms with more market power benefit because higher responsiveness leads to demand increases, which they are able to capture fully. Competing platforms are affected negatively because more information intensifies price competition.

  Keywords: two-sided platforms; information; responsive expectations; passive expectations; wary expectations; Information; Performance Expectations; Two-Sided Platforms; Monopoly;

  Citation:

  Hagiu, Andrei, and Hanna Halaburda. "Information and Two-Sided Platform Profits." International Journal of Industrial Organization 34 (May 2014): 25–35.  View Details

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