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Photo of Ayelet Israeli

Unit: Marketing

Contact:

(617) 495-3062

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Additional Information
  • Curriculum Vitae
  • Working Knowledge
  • Harvard Business Publishing
  • Digital Initiative

Areas of Interest

  • analytics
  • channels of distribution
  • electronic commerce
  • marketing
  • pricing

Additional Topics

  • econometrics

Industries

  • automotive
  • e-commerce industry
  • internet
  • retailing
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Ayelet Israeli

Assistant Professor of Business Administration

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Ayelet Israeli is an assistant professor of business administration in the Marketing Unit. She teaches the E-Commerce course in the MBA elective curriculum, the Data Driven Marketing course in the Harvard Business Analytics Program, and in various Executive Education programs. She has previously taught the core Marketing course in the first year MBA required curriculum.

In her research, Professor Israeli studies omni-channel and e-commerce markets. In particular, she focuses on pricing and pricing policies, channel management, and online marketing. Her research has been published in Marketing Science and Journal of Marketing Research. Her dissertation won the 2014 INFORMS Society for Marketing Science Doctoral Dissertation Proposal Award, and she was named a finalist for the 2018 Frank M. Bass Award. Her work has been cited by The Wall Street Journal, The Atlantic, MSN Money, and Harvard Business Review.

Professor Israeli received her PhD in marketing from the Kellogg School of Management at Northwestern University. She holds an MBA from the Hebrew University of Jerusalem, where she also earned her MSc and BSc in computer science. In addition to her academic experience, Professor Israeli served as a lieutenant in the Intelligence Corps of the Israeli Defense Forces and worked as an engineer at Israel Aerospace Industries and at Intel Corporation in Israel.

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Publications Research Summary Awards & Honors

Journal Articles

  1. Article | Marketing Science

    Online MAP Enforcement: Evidence from a Quasi-Experiment

    Ayelet Israeli

    This paper investigates a manufacturer’s ability to influence compliance rates among its authorized online retailers by exploiting changes in the Minimum Advertised Price (MAP) policy and in dealer agreements. MAP is a pricing policy widely used by manufacturers to influence prices set by their downstream partners. A MAP policy imposes a lower bound on advertised prices, subjecting violating retailers to punishments such as termination of distribution agreements. Despite this threat, violations are common. I uncover two key elements to improve compliance: customization to the online environment and credible monitoring and punishments. I analyze the pricing, enforcement, and channel management policies of a manufacturer over several years. During this period, new channel policies take effect, providing a quasi-experiment. The new policies lead to substantially fewer violations. With improved compliance, channel prices increase by 2% without loss in volume. The reduction in violations is particularly stark among authorized retailers with lower sales volume, those that previously operated unapproved websites and those that have received violation notifications for the specific product before. Moreover, low service providers improve their service. At the same time, there is an increase in opportunistic behavior among top retailers, retailers that received notifications for other products, and for less popular products via deep discounting.

    Keywords: Pricing policies; pricing; channel management; legal aspects of business; retail; Price; Policy; Governance Compliance; Distribution Channels; Management; Retail Industry;

    Citation:

    Israeli, Ayelet. "Online MAP Enforcement: Evidence from a Quasi-Experiment." Marketing Science 37, no. 5 (September–October 2018): 710–732.  View Details
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  2. Article | Journal of Marketing Research (JMR)

    Repairing the Damage: The Effect of Price Knowledge and Gender on Auto-Repair Price Quotes

    Meghan Busse, Ayelet Israeli and Florian Zettelmeyer

    In this paper we investigate whether sellers treat consumers differently on the basis of how well informed consumers appear to be. We implement a large-scale field experiment in which callers request price quotes from automotive repair shops. We show that sellers alter their initial price quotes depending on whether consumers appear to be correctly informed, uninformed, or misinformed about market prices. We find that repair shops quote higher prices to callers who cite a higher benchmark price. We find that women are quoted higher prices than men when callers signal that they are uninformed about market prices. However, gender differences disappear when callers mention a benchmark price for the repair. Finally, we find that repair shops are more likely to offer a price concession if asked to do so by a woman than a man.

    Keywords: pricing; price discrimination; Automobiles; field experiment; Information; Fairness; Price; Knowledge Use and Leverage; Internet; Gender; Service Industry; Auto Industry;

    Citation:

    Busse, Meghan, Ayelet Israeli, and Florian Zettelmeyer. "Repairing the Damage: The Effect of Price Knowledge and Gender on Auto-Repair Price Quotes." Journal of Marketing Research (JMR) 54, no. 1 (February 2017): 75–95.  View Details
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  3. Article | Marketing Science

    Minimum Advertised Pricing: Patterns of Violation in Competitive Retail Markets

    Ayelet Israeli, Eric Anderson and Anne Coughlan

    Manufacturers in many industries frequently use vertical price policies, such as minimum advertised price (MAP), to influence prices set by downstream retailers. Although manufacturers expect retail partners to comply with MAP policies, violations of MAP are common in practice. In this research, we document and explain both the extent and the depth of MAP policy violations. We also shed light on how retailers vary in their propensity to violate MAP policies and the depth by which they do so. Our inductive research approach documents managerial wisdom about MAP practices. We confront these insights from practice with a large empirical study that includes hundreds of products sold through hundreds of retailers. Consistent with managerial wisdom, we find that authorized retailers are more likely to comply with MAP than are unauthorized partners. By contrast to managerial wisdom, we find that authorized and unauthorized markets are largely separate, and that violations in the authorized channel have a small association with violations in the unauthorized channel. Last, we link our results to the literatures on agency theory, transaction cost analysis, and theories of price obfuscation.

    Keywords: Pricing policies; pricing; channel management; legal aspects of business; Price; Governance Compliance; Marketing Channels; Retail Industry;

    Citation:

    Israeli, Ayelet, Eric Anderson, and Anne Coughlan. "Minimum Advertised Pricing: Patterns of Violation in Competitive Retail Markets." Marketing Science 35, no. 4 (July–August 2016): 539–564. (Lead article.)  View Details
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Cases and Teaching Materials

  1. Case | HBS Case Collection | March 2019 (Revised September 2019)

    The DivaCup: Navigating Distribution and Growth

    Ayelet Israeli

    When the mother-daughter founders of DivaCup set out with a mission to disrupt the menstrual care industry with an innovative product form, they initially struggled to gain legitimacy and convince retailers to carry their unique product. Fifteen years later, the product was available online and in more than 35,000 retail stores worldwide, and the company was struggling with omnichannel distribution challenges and frequent violations of their pricing policy due to intense competition among channel partners. International distribution and the prevalence of gray market sellers were causing large price dispersions across markets, which was harming the brand further. In October 2018, the entry of a formidable competitor, P&G (owner of menstrual care brands Tampax and Always), into the niche product segment causes the CEO and her team to consider the best plan to reposition and differentiate its product to broaden its appeal to users of other product forms, while maintaining its market leadership in the menstrual cup segment. This challenge is made more difficult due to prevalent miseducation about menstrual care and menstrual cups in particular.

    Keywords: female; female ceo; Female Entrepreneur; female protagonist; health & wellness; healthcare; price policies; minimum advertised price; differentiation; positioning; Growth; Health; Health Care and Treatment; Price; Disruption; Distribution; Distribution Channels; Competitive Strategy; Competition; Growth Management; Mission and Purpose; Product Development; Product Marketing; Product Launch; Product Positioning; Advertising; Business Startups; Internet; Entrepreneurship; Social Entrepreneurship; Social Issues; Social Enterprise; Retail Industry; Medical Devices and Supplies Industry; Manufacturing Industry; Health Industry; Green Technology Industry; Education Industry; Distribution Industry; Consumer Products Industry; Canada; United States; United Kingdom;

    Citation:

    Israeli, Ayelet. "The DivaCup: Navigating Distribution and Growth." Harvard Business School Case 519-055, March 2019. (Revised September 2019.)  View Details
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  2. Case | HBS Case Collection | March 2019

    DayTwo: Going to Market with Gut Microbiome

    Ayelet Israeli and David Lane

    DayTwo is a young Israeli startup that applies research on the gut microbiome and machine learning algorithms to deliver personalized nutritional recommendations to its users in order to minimize blood sugar spikes after meals. After a first year of trial rollout in Israel, CEO Lihi Segal and her team are devising a global go-to-market plan for the firm. The team is considering several target markets, ranging from people with diabetes to professional athletes, and distribution strategies including selling direct to consumers or through partnerships with healthcare professionals or insurance companies. Their choices are important because they will affect DayTwo's costs, pricing, positioning, distribution channels, marketing efforts, and product development.

    Keywords: Start-up growth; Startup; positioning; targeting; go to market strategy; B2B2C; B2B vs. B2C; health & wellness; AI; Machine learning; female ceo; female protagonist; science-based; science and technology studies; ecommerce; Applications; DTC; direct to consumer marketing; US health care; "USA,"; innovation; pricing; Business growth; Segmentation; Distribution Channels; Growth and Development Strategy; Business Startups; Science-Based Business; Health; Innovation and Invention; Marketing; Technology; Business Growth and Maturation; Health Industry; Technology Industry; Insurance Industry; Information Technology Industry; Food and Beverage Industry; Israel; United States;

    Citation:

    Israeli, Ayelet, and David Lane. "DayTwo: Going to Market with Gut Microbiome." Harvard Business School Case 519-010, March 2019.  View Details
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  3. Teaching Note | HBS Case Collection | January 2019

    Hubble Contact Lenses: Data Driven Direct-to-Consumer Marketing

    Ayelet Israeli

    Teaching Note for HBS No. 519-011. As its Series A extension round approaches, the founders of Hubble, a subscription-based, social-media fueled, direct-to-consumer (DTC) brand of contact lenses, are reflecting on the marketing strategies that have taken them to a valuation of $200 million and debating changes to them that will allow them to grow their business. Ensuring that their marketing dollars were being spent efficiently was critical to the data-driven management team and proving to be complicated as the company moved spending from digital marketing to offline media, which made attribution modeling more difficult. Decisions pertaining to product extensions, channel expansion beyond DTC e-commerce, and geographic expansion were also on the table to prove that Hubble's customer value proposition and operations could profitably scale.

    Keywords: DTC; direct to consumer marketing; health care; e-commerce; mobile; digital marketing; attribution; experimentation; experiments; churn/retention; customer lifetime value; internet marketing; big data; analytics; social media; A/B Testing; CRM; Advertising; Marketing; Marketing Channels; Marketing Strategy; Media; Brands and Branding; Marketing Communications; Online Advertising; Acquisition; Growth and Development Strategy; Customer Focus and Relationships; Consumer Behavior;

    Citation:

    Israeli, Ayelet. "Hubble Contact Lenses: Data Driven Direct-to-Consumer Marketing." Harvard Business School Teaching Note 519-056, January 2019.  View Details
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  4. Case | HBS Case Collection | August 2018 (Revised November 2018)

    Hubble Contact Lenses: Data Driven Direct-to-Consumer Marketing

    Jill Avery and Ayelet Israeli

    As its Series A extension round approaches, the founders of Hubble, a subscription-based, social-media fueled, direct-to-consumer (DTC) brand of contact lenses, are reflecting on the marketing strategies that have taken them to a valuation of $200 million and debating changes to them that will allow them to grow their business. Ensuring that their marketing dollars were being spent efficiently was critical to the data-driven management team and proving to be complicated as the company moved spending from digital marketing to offline media, which made attribution modeling more difficult. Decisions pertaining to product extensions, channel expansion beyond DTC e-commerce, and geographic expansion were also on the table to prove that Hubble's customer value proposition and operations could profitably scale.

    Keywords: advertising; DTC; direct to consumer marketing; health care; e-commerce; mobile; digital marketing; attribution; experimentation; experiments; churn/retention; customer lifetime value; internet marketing; big data; analytics; consumer behavior; social media; A/B Testing; CRM; Marketing; Marketing Channels; Marketing Strategy; Media; Brands and Branding; Marketing Communications; Online Advertising; Acquisition; Growth and Development Strategy; Customer Focus and Relationships; Health Industry; Consumer Products Industry; United States; North America; Europe;

    Citation:

    Avery, Jill, and Ayelet Israeli. "Hubble Contact Lenses: Data Driven Direct-to-Consumer Marketing." Harvard Business School Case 519-011, August 2018. (Revised November 2018.)  View Details
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  5. Teaching Note | HBS Case Collection | November 2017

    Predicting Consumer Tastes with Big Data at Gap

    Ayelet Israeli and Jill Avery

    CEO Art Peck was eliminating his creative directors for The Gap, Old Navy, and Banana Republic brands and promoting a collective creative ecosystem fueled by the input of big data. Rather than relying on artistic vision, Peck wanted the company to use the mining of big data obtained from Google Analytics and the company's own sales and customer databases to select the next season's assortment. Peck was betting that intelligence fueled by big data could outperform a fashion industry creative director at predicting the future fashion trends and tastes of consumers.

    Keywords: marketing; marketing strategy; Brands; Brand & product management; big data; "marketing analytics"; consumer behavior; predictive analytics; Forecasting; preferences; Marketing channels; operation management; Distribution Channels; Marketing; Marketing Channels; Marketing Strategy; Brands and Branding; Forecasting and Prediction; Data and Data Sets; Retail Industry; Fashion Industry; Apparel and Accessories Industry; United States; North America;

    Citation:

    Israeli, Ayelet, and Jill Avery. "Predicting Consumer Tastes with Big Data at Gap." Harvard Business School Teaching Note 518-053, November 2017.  View Details
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  6. Case | HBS Case Collection | May 2017 (Revised March 2018)

    Predicting Consumer Tastes with Big Data at Gap

    Ayelet Israeli and Jill Avery

    CEO Art Peck was eliminating his creative directors for The Gap, Old Navy, and Banana Republic brands and promoting a collective creative ecosystem fueled by the input of big data. Rather than relying on artistic vision, Peck wanted the company to use the mining of big data obtained from Google Analytics and the company’s own sales and customer databases to select the next season’s assortment. Peck was betting that intelligence fueled by big data could outperform a fashion industry creative director at predicting the future fashion trends and tastes of consumers.

    Keywords: marketing; marketing strategy; retailing; brands and branding; consumer behavior; Preference elicitation; big data; predictive analytics; artificial intelligence; e-commerce; fashion; Marketing; Marketing Strategy; Marketing Channels; Brands and Branding; Consumer Behavior; Demand and Consumers; Data and Data Sets; Forecasting and Prediction; Apparel and Accessories Industry; Consumer Products Industry; Fashion Industry; Retail Industry; United States; Canada; North America;

    Citation:

    Israeli, Ayelet, and Jill Avery. "Predicting Consumer Tastes with Big Data at Gap." Harvard Business School Case 517-115, May 2017. (Revised March 2018.)  View Details
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  7. Teaching Note | HBS Case Collection | May 2017 (Revised January 2019)

    Angie's List: Ratings Pioneer Turns 20

    Ayelet Israeli and Robert J. Dolan

    Teaching Note for HBS No. 517-016.

    Keywords: ratings; marketing; Conjoint Analysis; Market research; Pricing strategy; product line management; two sided markets; freemium; ecommerce;

    Citation:

    Israeli, Ayelet, and Robert J. Dolan. "Angie's List: Ratings Pioneer Turns 20." Harvard Business School Teaching Note 517-123, May 2017. (Revised January 2019.)  View Details
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  8. Case | HBS Case Collection | September 2016 (Revised February 2017)

    Angie's List: Ratings Pioneer Turns 20

    Robert J. Dolan and Ayelet Israeli

    In 1995, before people “googled” or “yelped,” Angela Hicks (HBS, 2000) was establishing her Angie’s List as a pioneer in the accumulation and dissemination of consumer rating information. Hicks focused on the home repair and maintenance market and, as she put it, “particularly on high cost of failure situations where good information on potential service providers is correspondingly of high value.” Angie's List had a paid subscription model as it charged “members” for access to the information they collectively provided on service providers. More recently, companies such as Yelp, TripAdvisor, and Google have started offering free access to their reviews while relying totally on site advertising and service provider fees for their revenues. In 2015, Angie's List collected close to $68 million in membership fees. In January 2016, with recent declines in the growth rate of member numbers, Angie’s List has to decide if it was time to drop the “paid subscription for all” model and introduce a free version of its service to its product line.

    Keywords: pricing; Pricing strategy; services; product line management; Growth; Conjoint Analysis; Market research; freemium; growth strategy; two sided markets; ecommerce; Business Model; Internet; Business Growth and Maturation; Growth and Development Strategy; Price; Strategy; Service Industry;

    Citation:

    Dolan, Robert J., and Ayelet Israeli. "Angie's List: Ratings Pioneer Turns 20." Harvard Business School Case 517-016, September 2016. (Revised February 2017.)  View Details
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Search all publications by Ayelet Israeli »

In the News

08 Nov 2018
Cold Call
Could Big Data Replace the Creative Director at the Gap?
03 Feb 2017
American Marketing Association
Repairing the Damage: The Effect of Price Knowledge and Gender on Auto Repair Price Quotes
21 Jun 2016
Total Retail
MAP Policy Enforcement in an Omnichannel World
10 Jun 2016
Informs
Are there better deals than the “Minimum Advertised Price?” More often than you think.
20 May 2016
Upstream Commerce
How Retailers & Consumers Benefit from MAP Policy Enforcement

See more news for Ayelet Israeli »

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