Marketing

- Featured Publication
Frontiers: Can an AI Algorithm Mitigate Racial Economic Inequality? An Analysis in the Context of Airbnb

By: Shunyuan Zhang, Nitin Mehta, Param Singh and Kannan Srinivasan

Nominated for the 2022 John D. C. Little Award.

They study the effect of Airbnb’s smart-pricing algorithm on the racial disparity in the daily revenue earned by Airbnb hosts. Their empirical strategy exploits Airbnb’s introduction of the algorithm and its voluntary adoption by hosts as a quasi-natural experiment.
- Featured Publication
Frontiers: Can an AI Algorithm Mitigate Racial Economic Inequality? An Analysis in the Context of Airbnb

By: Shunyuan Zhang, Nitin Mehta, Param Singh and Kannan Srinivasan

Nominated for the 2022 John D. C. Little Award.

They study the effect of Airbnb’s smart-pricing algorithm on the racial disparity in the daily revenue earned by Airbnb hosts. Their empirical strategy exploits Airbnb’s introduction of the algorithm and its voluntary adoption by hosts as a quasi-natural experiment.
- Featured Case
Hometown Foods: Changing Price Amid Inflation Case

By: Julian De Freitas, Jeremy Yang, and Das Narayandas

During the early part of the 2021 Covid-19 pandemic, Hometown Foods, a large seller of flour-based products, thrived as consumers hoarded baked goods and took up baking to pass the time and find comfort. Then, amid growing shortages in commodities, a vaccine arrived, businesses began to re-open, and consumers benefited from federal relief aid. This perfect storm of high demand amid stock shortages generated the highest inflation in 13 years.
- Featured Case
Hometown Foods: Changing Price Amid Inflation Case

By: Julian De Freitas, Jeremy Yang, and Das Narayandas

During the early part of the 2021 Covid-19 pandemic, Hometown Foods, a large seller of flour-based products, thrived as consumers hoarded baked goods and took up baking to pass the time and find comfort. Then, amid growing shortages in commodities, a vaccine arrived, businesses began to re-open, and consumers benefited from federal relief aid....
- Award
Winner of the 2016 Case Centre Award in the Marketing category for “The New York Times Paywall” (HBS Case 512-077).

By: Sunil Gupta, Vineet Kumar, Bharat Anand, and Felix Oberholzer-Gee

The Case Centre Awards and Competitions recognize worldwide excellence in case writing and teaching, and are considered the case community's annual 'Oscars'. The winners of this category are the Marketing cases that were used in the largest number of organizations across the globe in the preceding calendar year.
- Award
Winner of the 2016 Case Centre Award in the Marketing category for “The New York Times Paywall” (HBS Case 512-077).

By: Sunil Gupta, Vineet Kumar, Bharat Anand, and Felix Oberholzer-Gee

The Case Centre Awards and Competitions recognize worldwide excellence in case writing and teaching, and are considered the case community's annual 'Oscars'. The winners of this category are the Marketing cases that were used in the largest number of organizations across the globe in the preceding calendar year.
- Article
Minimum Advertised Pricing: Patterns of Violation in Competitive Retail Markets

By: Ayelet Israeli, Eric Anderson, and Anne Coughlan

We study the extent and depth of MAP violations among online retailers and confront managerial wisdom with empirical data.

More Information
- Article
Minimum Advertised Pricing: Patterns of Violation in Competitive Retail Markets

By: Ayelet Israeli, Eric Anderson, and Anne Coughlan

We study the extent and depth of MAP violations among online retailers and confront managerial wisdom with empirical data.

More Information
- Award
Outstanding Case Teacher

By: Anita Elberse

This world-wide Case Centre competition recognizes an excellent practitioner in the case classroom.

More Information
- Award
Outstanding Case Teacher

By: Anita Elberse

This world-wide Case Centre competition recognizes an excellent practitioner in the case classroom.

More Information

About the Unit

Marketing is critical for organic growth of a business and its central role is in creating, communicating, capturing and sustaining value for an organization. Marketing helps a firm in creating value by better understanding the needs of its customers and providing them with innovative products and services. This value is communicated through a variety of channels as well as through the firm's branding strategy. Effective management of customers and pricing allows the firm to capture part of the value it has created. Finally, by building an effective customer-centric organization a firm attempts to sustain value over time.

Our faculty addresses a broad array of topics in all of these areas. Our work attempts to get a better understanding of how consumers use information and make choices and how these choices affect the firm's strategy for new product development, customer relationship management, branding and other marketing efforts. We examine issues related to branding, business marketing, global marketing, distribution channels, pricing, direct and interactive marketing, sales management and return on marketing investment. Some of our faculty specializes in specific industries such as retailing, agribusiness, social enterprise, media, arts and entertainment.

There are several new developments in marketing that offer opportunities for us to make important contributions in the future. The current economic crisis is changing consumers' current and future purchase and consumption patterns. Search engines have changed the way consumers obtain information and make decisions and they are also dramatically changing the advertising industry. Social networks and user generated content have opened a new way for consumers to engage with each other as well as with brands and companies. There are significant changes in the attitudes of consumers and companies about social issues. Consumer preferences and choice of products are increasingly influenced by social factors. Companies are recognizing that there is a large market at the "bottom of the pyramid" and marketing to these consumers may require a new framework. These and related developments provide great opportunities for the marketing faculty to make a significant impact in the future.

Recent Publications

Infarm: Betting the (Indoor) Farm on Food Security

By: Elie Ofek

November 2023 |
Case |
Faculty Research

In the summer of 2023, the co-founders of Infarm, a controlled environment agriculture (CEA) company, were contemplating a major pivot going forward. While Infarm had successfully shown it could grow over 75 products – mainly herbs, leafy greens and mushrooms – in modular indoor facilities, and was able to sell the yield to major supermarket chains across Europe and North America for almost a decade, recent developments required a major rethink of the business. The dramatic rise in energy prices, especially in Europe, as a result of the Russian-Ukraine conflict, made growing crops indoors much costlier; inflationary pressures had further led retailers to look for cheaper produce alternatives. Consequently, Infarm had to shut down most of its growing centers. At the same time, the company’s scientists had demonstrated the ability to grow wheat indoors, with a yield per square meter that was already thirty-eight times that of wheat grown conventionally in an open field. CEO Galonska and his leadership team were now pondering whether to shift the company’s focus to wheat and target countries that desired to achieve food self-sufficiency. For the pivot to be successful, Infarm would have to convince leaders in these countries to heavily support (and subsidize) the creation of massive “gigafarms”, capable of producing thousands of tons of wheat annually, as well as develop a plan for selling at least some of the yield commercially. Another decision facing management was what to do with the existing units in Europe. Infarm could either try to find a local player to take on their operation, or again aim for countries that imported much of their produce and ship the units there. Either way, Infarm would remain involved in technical and operational support under a Food as a Service (FaaS) model. Lastly, the company had kept its Toronto growing center open and was seeing strong interest from the US northeast kosher market, which valued the fact that Infarm’s output met strict kosher standards. Whether and how to expand business in North America was something for leadership to decide. In tandem, there were questions about whether the company should develop additional crop types, such as tomatoes, strawberries and peppers, or only dedicate efforts to the crops it had already developed, with an emphasis on wheat.

Citation

Educators

Customer Data Privacy

By: Eva Ascarza and Ta-Wei Huang

November 2023 |
Technical Note |
Faculty Research

This note provides an overview of the evolving landscape of customer data privacy in 2023. It highlights two pivotal aspects that make privacy a central concern for businesses: building and maintaining customer trust and navigating the intricate regulatory environments. The note examines common privacy risks and their potential impacts on businesses, including reputational damage and compliance issues. It also offers insights into the differences between European and American regulatory practices. Furthermore, the note explores prevalent business practices related to data privacy and the challenges faced by industry professionals. It concludes by analyzing the perspectives of both consumers and regulators on privacy, identifying key challenges, and posing thought-provoking questions for further exploration in this digital age.

Keywords: Retail Industry; Technology Industry; Financial Services Industry; Telecommunications Industry

Citation

Educators

Psychological Factors Underlying Attitudes toward AI Tools

By: Julian De Freitas, Stuti Agarwal, B. Schmitt and N. Haslam

November 2023 |
Article |
Nature Human Behaviour

What are the psychological factors driving attitudes toward AI tools, and how can resistance to AI systems be overcome when they are beneficial? In this perspective, we first organize the main sources of resistance into five main categories: opacity, emotionlessness, rigidity, autonomy, and group membership. We relate each of these barriers to fundamental aspects of cognition, then cover empirical studies providing correlational or causal evidence for how the barrier influences attitudes toward AI tools. Second, we separate each of the five barriers into AI-related and user-related factors, which is of practical relevance in developing interventions toward adoption of beneficial AI tools. Third, we highlight potential risks arising from these well-intentioned interventions. Fourth, we explain how the current perspective applies to various stakeholders, including how to approach interventions that carry known risks, and point to outstanding questions for future work.

Keywords: Policy; Self; AI and Machine Learning; Attitudes; Technology Adoption

Citation

Read Now

Managing Customer Retention at Teleko

By: Eva Ascarza and Ta-Wei Huang

October 2023 |
Supplement |
Faculty Research

Citation

Purchase

Managing Customer Retention at Teleko

By: Eva Ascarza and Ta-Wei Huang

October 2023 |
Teaching Note |
Faculty Research

Teaching Note for HBS Case No. 523-005.

Keywords: Customer Relationship Management; United States

Citation

Purchase

Design and Evaluation of Targeted Interventions

By: Eva Ascarza and Ta-Wei (David) Huang

October 2023 |
Technical Note |
Faculty Research

Targeted interventions serve as a pivotal tool in business strategy, streamlining decisions for enhanced efficiency and effectiveness. This note delves into two central facets of such interventions: first, the design of potent decision guidelines, or targeting policies, through assessing individual reactions via A/B testing; and second, the strategic use of A/B tests to predict policy outcomes prior to their full-scale implementation. Complementing these insights, the note presents real-world data illustrations and essential coding guidance, furnishing readers with the hands-on skills needed to adeptly create and evaluate targeting policies.

Keywords: Marketing; Customer Relationship Management; Retail Industry; Apparel and Accessories Industry; Technology Industry; Financial Services Industry; Telecommunications Industry

Citation

Educators

Loris

By: Shunyuan Zhang, Das Narayandas, Stacy Straaberg and David Lane

October 2023 |
Case |
Faculty Research

In December 2022, Loris’s executive team considered their go-to-market strategy. Loris was an artificial intelligence (AI) software startup for the customer service industry with two products on the market: 1) Agent Assist which provided customer service agents (CSAs) with empathetic, on-brand responses to text-based live chat (live chat) conversations, and 2) Insights which provided customer experience (CX) leaders with CSA performance and customer satisfaction (CSAT) data. Loris was also developing a third product: Automated Quality Assurance (AQA) which analyzed quality assurance in customers’ email and live chat conversations. The Loris team faced challenges to growth with prospective clients cutting costs through laying off their CX leaders and automating customer conversations through chatbots including the recently-released ChatGPT generative AI chatbot. To increase marketplace traction in preparation for raising a Series B round, the Loris team was reevaluating two aspects of its go-to-market strategy. First was sales approach: Loris previously used a sales-led growth model with robust marketing and sales teams, but had begun experimenting with product-led growth (PLG) which focused on developing exceptional products so that word of mouth would drive quick and exponential sales. Loris’s PLG efforts had little success, though, and the team wondered if they should continue with PLG, revert to sales-led growth, or pursue pay-for-performance where clients only paid for Loris products upon Loris’s achieving agreed-upon revenue or cost savings. Second, was product strategy: Loris had been offering Agent Assist and Insights as a bundled suite, but was considering using one of those products or AQA as a foot-in-the-door approach to cross-sell and upsell other products. Which sales and product strategy would help Loris grow, especially given the threat from ChatGPT which both raised awareness of AI tools like Loris and served as competition to Loris?

Keywords: Decision Making; Decisions; Growth and Development Strategy; Product Marketing; Product Launch; Product Positioning; Business Strategy; Competition; Competitive Strategy; Technology Industry; United States

Citation

Educators

FARM Rio: Bringing a Brazilian Fashion Brand to the World

By: Isamar Troncoso and Jill Avery

October 2023 |
Case |
Faculty Research

FARM Rio, a twenty-six year old Brazilian fashion brand had recently put down roots in the U.S. The brand, known for its bold, colorful, nature-inspired tropical prints, was testing the waters in Europe to assess if and how the brand should further expand globally. Balancing two different geographic markets was proving to be more challenging than expected and the team had needed to make changes to the brand’s name and positioning, price points, and its product quality, styles, and fits to accommodate the needs of retailers and consumers in the U.S. Before deciding on a European investment strategy, the team was assessing the return-on-investment of the U.S. launch and determining if the company had achieved a sufficient level of product-market fit so that they could adjust if necessary. They were also working to optimize the distribution channel mix among its own branded stores, e-commerce, and wholesale partnerships. With the U.S. still requiring significant investment to fuel an aggressive growth path, the company would have to decide where to place its bets: in its initial market of Brazil where it was a market leader, in the U.S. which was showing strong initial promise, or in the untested waters of Europe, home to the world’s fashion capitals. As they evaluated global expansion possibilities, the team had to coordinate with their colleagues who were busy managing the brand back at home at the company’s headquarters in Rio de Janeiro.