David Reibstein - Faculty Research in Knowledge@Wharton

Today's Marketing Challenge: Turning the Data Deluge into Competitive Advantage

Wed, 09 Nov 2011 15:16:32 EST

In a new paper titled, "Closing the Marketing Capabilities Gap," Wharton professor George Day addresses the disconnect between the demands of markets and the ability of firms to meet those demands. Such a gap, he points out, is "costing firms profitability now and competitiveness in the future." Day and colleague David Reibstein talked with Knowledge@Wharton about the growing flood of data, new knowledge sharing technology, the socially networked and ever demanding consumer, and how some companies are successfully building their customer base, among other topics.

Brand Disloyalty: Recession-weary Consumers Take Discounts to the Extreme

Wed, 26 Oct 2011 14:21:51 EST

As food prices rise and the economy continues to sag, grocery shoppers are turning their backs on brand or chain loyalty in favor of finding the best bargains around. The shift has been a boon for warehouse chains, which sell items in bulk. It has also created an entire culture built around "extreme couponing" -- combining multiple discounts to amass stockpiles of products for pennies on the dollar. How should grocery chains and consumer goods companies deal with shoppers' changing habits?

How Sustainable Is Groupon's Business Model?

Wed, 25 May 2011 16:03:17 EST

Online group buying sites are experiencing rapid growth in all areas, from partner businesses to subscribers to revenues. Venture capitalists are actively investing in the sites, which is driving up business valuations. But that "wild exuberance" is miscalculated, warns Wharton marketing professor David Reibstein in an interview with Knowledge@Wharton. Taking Chicago-based Groupon as a case in point, he says the industry's current growth rates are unsustainable, and its business model is flawed.

Back to the Future: Will Rising Commodities Prices Create a New 'Inflation Generation'?

Wed, 13 Apr 2011 15:12:19 EST

Commodities prices are surging -- from oil to cotton to grains to gold. These higher costs pose challenges for companies in industries like apparel, food retailing and appliances as they try to pass on price increases without alienating consumers. At the same time, higher commodities prices raise the specter of a spike in inflation down the road, a major concern for policymakers and the Federal Reserve.

Executives Speak Up, in Real-time, on Innovation, Financial Risk, Hiring and Other Concerns

Wed, 16 Mar 2011 15:44:15 EST

Many insights about business behavior come in one of two forms: minute-by-minute anecdotes from news outlets or long-term studies from industry groups and academia that take years to complete. New research from Wharton attempts to uncover insights that are both timely and deep. Through brief online surveys of a wide spectrum of industry executives, researchers have compiled real-time commentary from executives on such topics as innovation, global financial risk and corporate social responsibility, among others.

Logo Overhaul: Will Customers Still Answer the Siren Call of Starbucks?

Wed, 02 Feb 2011 15:51:26 EST

Starbucks has emerged over the last 20 years as one of the premier consumer brands in the world. Now, the company has decided to give that brand a facelift by revamping its ubiquitous logo. While logo overhauls can successfully communicate a company's evolution and growth, they can also trigger a backlash among loyal customers. In the case of Starbucks, the new logo highlights a strategic shift for the company, but has sparked criticism from outspoken fans as well.

Mexico's Drug War: The Battle to Remain Safe, Low-cost and Competitive

Wed, 15 Sep 2010 15:42:34 EST

Mexico became a manufacturing mecca thanks, in part, to its inexpensive labor and proximity to the massive U.S. market. But there is a new reality on the ground these days: a surge in violence tied to the war on drug cartels mounted by Mexican President Felipe Calderon. The result has been a wave of kidnappings, extortion and murder that is threatening the country's economic health and causing multinationals to examine closely how they operate and invest in Mexico.

Will Customers Be the Excess Baggage of Airline Consolidation?

Wed, 28 Apr 2010 14:56:07 EST

After losing $60 billion in the last decade -- and billions more recently when a cloud of volcanic ash grounded flights across Europe -- airlines are looking to consolidate as a way to return to profitability amid continued struggles with high fuel prices, competition from low-cost carriers, and a limited customer pool that shriveled even more during the recession. But experts are skeptical about the "bigger is better" strategy. Many observers say the carriers have proved downright flighty at following through on making changes that improve operations and put the customer first.

The Crowded, Caffeinated Soft Drink Sector: Who Will Bubble Up to the Top?

Wed, 02 Sep 2009 16:37:02 EST

The ritual is now a part of big-time, as well as small-town, football games. As the clock winds down, players grab an orange vat with a green label and douse the winning coach. This "Gatorade shower" has made the sports drink one of the world's best-known brands and helped pave the way for other niche products and beverage categories that now compete with traditional carbonated soft drinks. What marketing challenges do soft drink companies face, especially given health concerns and the recessionary economy? Wharton faculty and other experts weigh in.

How Hyundai Sells More When Everyone Else Is Selling Less

Wed, 10 Jun 2009 17:08:51 EST

In 2008 -- a brutal year for the auto business -- Hyundai Motor's global unit sales rose 2%, lifting revenues by 5%. In the first three months of this year, the South Korean automaker's global market share rose to 4.7%, compared to 4% a year earlier. With industry-leading guarantees, an intense focus on quality and a program to reassure buyers worried about their economic future, the once-derided company has won hearts -- and business.

Best Buy vs. Wal-Mart: Is There Room for Both, and Others?

Wed, 01 Apr 2009 17:13:39 EST

With the demise of electronics retailer Circuit City in March, Best Buy and Wal-Mart Stores are ramping up their struggle to capture added share of the consumer electronics market. Best Buy is positioning itself as the provider of quality service and sales help; Wal-Mart is using its dominance across all retail categories to position itself as the low-price option in consumer electronics. Wharton faculty and industry analysts say instead of fighting to the death, both stores can coexist if they follow clearly defined strategies focusing on service and price.

Backlash: How Early Adopters React When the Mass Market Embraces a New Brand

Wed, 18 Mar 2009 17:02:42 EST

A well-established principle of product development holds that a small group of early adopters can spur mass-market acceptance of a new product. What is less well understood is how those early adopters react when that product or its brand is accepted by the mass market. As Wharton marketing professors David Reibstein and John Zhang explain in this video, the company could experience a backlash as early adopters move on to other new products. A case in point: Porsche saw a decline in sports car sales after it entered the SUV mass market. Research by Reibstein and Zhang discusses reasons for the backlash and suggests a strategy for dealing with it.

The Shopper of Tomorrow: Trading Down

Wed, 18 Feb 2009 17:51:20 EST

Attention Shoppers: We no longer have the following items -- "a sense of entitlement," "conspicuous consumption" and "a golden period of luxury." At least that is the word from Wharton faculty and other experts who point to a new logic that is defining not just what U.S. consumers buy, but how they view the shopping experience.

The Financial Crisis Reaches a New Arena: Professional Sports

Wed, 10 Dec 2008 17:25:28 EST

For decades, sports have existed in a protective bubble. Even in recessions, fans could be counted on to keep buying tickets to games and keep beefing up the huge television audiences that draw top dollar from advertisers. But the current recession seems to be bursting the bubble. Says Wharton professor Eric Bradlow: "Advertising revenue is down. Corporate boxes and corporate sponsorships are going to be down. There's no question the [financial crisis] is going to affect the economics of the sports industry."

A Precarious Road: How Retailers Can Navigate Inflation's Hazards

Wed, 06 Aug 2008 17:31:38 EST

Retailers are in a tough situation, locked between rising product costs and a limited ability to raise their prices. Even cost-savvy market leaders such as Costco are having a difficult time. But Wharton faculty say that handled carefully, the current inflationary period may actually be a business opportunity for some companies. The key: Forgetting some of the old rules of retailing.

Africa's Mining Industry Digs Deeper to Meet Demands of Commodities 'Super Cycle'

Wed, 23 Jul 2008 13:40:28 EST

Diamonds aren't forever. Just ask John J. Teeling, executive chairman of Dublin-based exploration company African Diamonds. During a panel discussion at the recent Wharton Global Alumni Forum in Cape Town, South Africa, Teeling noted that despite its storied past as a leader in gold and diamond production, South Africa "is mined out." Yet conference participants overall suggested that mining will continue to play a major economic role throughout Africa, including in South Africa, as emerging markets like China and India fuel a long-term commodities "super cycle" and African nations become more adept at extracting value from their abundant natural resources.

If Online Marketing Is the Future, Why Are Some CMOs Stuck in the Past?

Wed, 06 Feb 2008 15:51:11 EST

Americans spend an average of 14 hours a week online and 14 hours watching TV. But marketers spend 22% of their advertising dollars on TV and only 6% online, according to data compiled and analyzed by Google. Why are some chief marketing officers and major advertisers reluctant to add digital technology to the marketing mix, despite the Internet's ability to help target huge audiences and build brand awareness? Wharton faculty and marketing experts offer a number of answers, but they also note that CMOs and others will soon have no choice but to start taking advantage of an increasing number of online advertising options.

Super Bowl Showstoppers: Despite the Economy, the Big Game Is Still on for Advertisers

Wed, 23 Jan 2008 16:49:57 EST

Even against the backdrop of an increasing likelihood of recession, television advertising spots for February's Super Bowl XLII were nearly sold out by early January -- several weeks sooner than in the past -- and advertisers are paying record prices. While the power of television has waned as new media compete for consumers' attention, the Super Bowl appears to have retained -- and solidified -- its position as the ultimate in television marketing, according to Wharton faculty and industry analysts.

The Price Is Right, but Maybe It's Not, and How Do You Know?

Wed, 03 Oct 2007 14:47:58 EST

When Apple dropped the price of its iPhone by a third after only two months on the market, even its most loyal buyers complained bitterly, forcing CEO Steve Jobs to apologize and offer a partial rebate. According to Wharton faculty and analysts, the iPhone episode reflects an evolving marketplace where innovation, fierce competition and globalization are changing strategic approaches to pricing. Meanwhile, pricing is gaining new interest as management looks for ways to increase revenues after years of focusing their attention on downsizing and cost-cutting.

When a Black Tee Shirt Is More than a Black Tee Shirt: Why Brands Aren't Losing Their Luster

Wed, 05 Sep 2007 15:46:23 EST

As sales of Apple's iPod, Coca-Cola and North Face clothing show, despite serious challenges from private label manufacturers and low-price global production, branding remains an important way for consumers to choose among products in a crowded marketplace. Brands are a short-hand means of conveying quality and lower risk, according to Wharton faculty and marketing analysts, and they also play a growing role in building consumers' identities. But, these experts add, with little room to compete on cost, brands will need to be vigilant when it comes to differentiating themselves from increasingly sophisticated competitors.

Verizon's High-Speed Network: If They Build It, Will You Come?

Wed, 21 Mar 2007 15:21:30 EST

Verizon is betting billions of dollars on a new fiber-optic network that could transform it from a telephone company to a cutting-edge technology player. If the strategy works, the company could leapfrog over rivals, such as AT&T and Comcast, by offering faster Internet service and potentially richer video on demand. But if Verizon's fast network fails to entice consumers, the company will have created a multi-billion-dollar boondoggle. Wharton faculty and others examine the two different scenarios.

Brand It Like Beckham: Can the Soccer Star Sustain the Hype?

Wed, 24 Jan 2007 15:12:24 EST

The sports world went into overdrive this month when it was announced that soccer star David Beckham had signed a landmark five-year sports contract worth an estimated $250 million to play soccer with the Los Angeles Galaxy. But what many Wharton sports and marketing experts are wondering is whether Beckham can live up to the hype surrounding the deal and produce enough star power to not only boost the team's revenue, but also raise the profile of Major League Soccer in the U.S.

Retailers Are Trying to Avoid the Christmas Crunch, but Consumers Aren't Buying It

Wed, 13 Dec 2006 15:19:43 EST

"Black Friday" -- the day after Thanksgiving that signals the start of the holiday shopping season in the U.S. -- was particularly charged this year, marked by midnight store openings and brawls over scarce sale items. Despite the hoopla, retailers are expected to post only modest gains this month, according to Wharton faculty and retail analysts. A key problem, they note, is that shoppers continue to procrastinate on holiday purchases, despite highly visible, early-season marketing promotions. The one area where sales are moving at a brisk pace: online retail.

Online Companies Want a Piece of Old-style Media Business

Wed, 29 Nov 2006 15:45:38 EST

After conquering the advertising frontier in cyberspace, Google, Yahoo and eBay are now turning to traditional media for future growth by brokering ad sales for offline media like radio, television and print. The Internet players' foray into offline advertising could drive down rates, but advertisers and media companies may not completely abandon the current system of relationship-based sales for Internet auctions, according to Wharton faculty and industry executives.

Blu-ray vs. HD-DVD: Knocking Each Other Out?

Wed, 15 Nov 2006 16:21:19 EST

High definition televisions are expected to be hot sellers this holiday season, but consumers are likely to have a tough time sorting out the newest generation video discs and the players that go with them. The culprit: Two competing high definition DVD formats -- Blu-ray and HD-DVD -- and no sign of a clear winner.

'Smart Growth': Innovating to Meet the Needs of the Market without Feeding the Beast of Complexity

Wed, 25 Oct 2006 16:12:26 EST

As companies struggle to innovate in today's competitive environment, they need to continually guard against adding to their "clutter" -- the creeping impact of complexity on efficiency and cost-competitiveness. In this three-part special report, experts from Wharton and George Group Consulting discuss how management can approach this problem by thinking "ambidextrously" -- that is, focusing on innovation and broad exploration while minimizing the impact of clutter on operational processes and costs. Also, in the accompanying podcast (with transcript), Mike McCallister, CEO of Humana, discusses balancing innovation and complexity in the health care industry with Wharton management professor Michael Useem and Stephen Wilson, engagement director in George Group's Conquering Complexity practice.

Burgers and Other Goods in the Blink of an Eye: How Effective Are Short Ads?

Wed, 18 Oct 2006 16:48:45 EST

Clear Channel Communications, which owns more than 1,200 stations and is the nation's largest radio company, has begun selling five-second, two-second and even one-second spots that they hope will appeal to cost-conscious marketers. But how much can an advertiser communicate in a five-second "adlet" or a two- or one-second "blink," as these super-short ads are called?

Finding New Opportunities to Market 'Lost' and Other TV Shows

Wed, 28 Jun 2006 15:11:00 EST

In the spring of 1980, "Dallas" ended its season with the biggest network television cliffhanger ever. Viewers waited all summer to discover who shot conniving oilman J.R. Ewing; when CBS finally provided the answer that fall, a record 76% of American TVs in use were tuned into the show. In that pre-Internet, pre-podcast, pre-TiVo world, networks had only each other to compete with. Today, under pressure from on-demand media, networks are using new tricks to retain viewers. Their strategy this time around? Turn shows into communities and viewers into cult-like fanatics. ABC's "Lost" is probably the most visible example of this recent phenomenon, but it's not the only one. What strategies are networks and advertisers using to gain the attention of that ever-important consumer?

Death in the Middle: Why Consumers Seek Value at the Top and Bottom of Markets

Wed, 10 May 2006 17:29:46 EST

"In the U.S. and around the world, the consumer markets are bifurcating into two fast-growing pools of spending," writes author Michael J. Silverstein in his new book, Treasure Hunt: Inside the Mind of the New Consumer. "At the high end, consumers are trading up, paying a premium for high-quality, emotionally rich, high-margin products and services. At the low end, consumers are relentlessly trading down, spending as little as possible to buy basic, low-cost goods and services." Between both piles lies a vast range of mediocre, medium-range products that Silverstein claims is doomed to decline. What implications does this have for companies and their brands? David Reibstein, a Wharton professor of marketing, discussed that question with Silverstein, a senior vice president of The Boston Consulting Group.

Marketing Metrics and Financial Performance

Wed, 26 Apr 2006 21:22:34 EST

When companies talk about marketing these days, they are talking about things like promotional strategy, advertising, and distribution; customer perception; market share; competitors' power; margins and pricing; products and portfolios; customer profitability; and sales forces and channels. How does a company measure the effectiveness of the various components of its marketing strategy? What metrics are most effective, and how can these help maximize profits? A new book out from Wharton School Publishing titled Marketing Metrics: 50 + Metrics Every Executive Should Master, identifies the pros, cons and tradeoffs associated with each metric. The book is by Paul Farris, Neil Bendle, Phillip Pfeifer and Dave Reibstein. Reibstein, a marketing professor at Wharton, agreed to talk with Mukul Pandya, editor in chief of Knowledge@Wharton, and Robbie Shell, editorial director, about this new book.

The Coffee Wars Heat Up: New Strategies to Jolt the Caffeine-Conscious Consumer

Wed, 19 Apr 2006 16:18:31 EST

Consumers' love affair with expensive, customized cups of coffee shows no signs of abating, even though most orders consist of little more than a cup of water, a splash of milk, a spoonful of coffee grinds and 30 seconds of labor. Indeed, Starbucks has managed to turn its customers' craving for caffeine into a $6.4 billion a year business, with close to 6,000 company-owned coffeehouses already up and running, and five new ones opening each day. All of which explains why so many coffee sellers seem intent on taking away some of Starbucks' highly profitable market share. Yet according to Wharton marketing professors, some companies are so obsessed with swiping business from Starbucks, or losing customers to it, that they may be abandoning a niche that has already proved profitable.

Marketing for the Bottom Line

Wed, 01 Mar 2006 16:43:37 EST

That Wal-Mart, the low-cost mass retailer, and BMW Group, a high-end automaker, can have anything in common seems improbable. But they do. Both companies have figured out a way to put a long-term value on their customers, and are able to more effectively direct their marketing investment than most companies, says Wharton marketing professor David Reibstein. According to Reibstein, it is a mistake to treat marketing investments as short term. He advises finance executives not to hold marketing accountable for what happens in year one, but instead view marketing costs as a longer-term investment that has an impact over time. "There is a lot to gain in trying to measure and capture what the long-term value is," he says.

Farewell, Peter Drucker: A Tribute to an Intellectual Giant

Wed, 30 Nov 2005 15:55:06 EST

Decades ago, Peter F. Drucker single-handedly began the exploration of what he called "the dark continent of management." That exploration, which gave birth to the field of management, came to an end on November 11 when Drucker passed away at age 95. Wharton professors point out that Drucker's most important contributions are grounded in his writings on management and marketing. Despite his death, his legacy and impact as a role model will last.

Why the Red Sox Brand Keeps Hitting Home Runs

Wed, 19 Oct 2005 16:43:39 EST

Although legendary sports franchises like the New York Yankees baseball team and Manchester United football club have achieved global brand awareness, some would argue that baseball's Boston Red Sox has become the premier brand in sports today, particularly under a relatively new ownership team that fully recognizes and exploits the brand in unique ways. What have the owners done, why have they been so successful, and how can they keep promoting the brand, whether the Bosox win or lose?

Chinese Firms: Taking a Gamble on Finding Customers Abroad

Wed, 10 Aug 2005 15:55:55 EST

In recent years, U.S-based companies have flocked to China to set up manufacturing and other operations, taking advantage of favorable labor rates that are often a fraction of those in America. Now, however, Chinese companies that previously only served their domestic market are beginning to expand to the U.S. and other countries. Witness Beijing-based Lenovo's acquisition in 2004 of IBM's personal computing division. Last week, 30 Chinese executives met with several Wharton faculty members and visited nine U.S. companies -- including a casino in Atlantic City, N.J. -- to learn more about how business is conducted in the U.S.

Managing Brands in Global Markets: One Size Doesn't Fit All

Wed, 01 Jun 2005 17:22:46 EST

Theodore "Ted" Levitt of Harvard Business School set the marketing world abuzz in 1983 with a bold prediction: Globalization had arrived, and before long global companies would be selling products and services in the same way everywhere on earth. More than 20 years later, however, Levitt's prediction has not come to pass, according to Wharton marketing professors George S. Day and David J. Reibstein, who note that only a handful of truly global brands exist today despite the increased globalization of markets. Day and Reibstein, who address this issue in a book entitled "The INSEAD-Wharton Alliance on Globalizing: Strategies for Building Successful Global Businesses," suggest that adapting brands to local conditions can often be the best approach.

Million Dollar Booboo, Or Are the Oscars Still Golden?

Wed, 23 Mar 2005 12:10:33 EST

"And the winner is ..." For more than seven decades, the movie industry has banked on these words to introduce the highest motion picture achievement. But not every Hollywood story has a happy ending: This year, the buzz surrounding the Oscars appeared to be more about the survival of the Academy Awards show than about the winners. And while past Best Picture Oscar winners have traditionally witnessed a surge in box office receipts during the first post-awards weekend, the box office numbers for this year's critically acclaimed Million Dollar Baby were disappointing by comparison. All of which begs the question: Have the Oscars lost their luster? Wharton faculty and industry experts say that although it may be tarnished, the Oscar brand remains as strong as ever.

The $2.4 Million Question: What is the ROI for Super Bowl Ads?

Wed, 23 Feb 2005 16:12:25 EST

On the Monday following the Super Bowl, players and coaches are not the only ones scrutinizing the game highlights. With much at stake, advertisers and their ad agencies also play Monday morning quarterback, scanning popularity polls, buzz meters, and Internet blogs to determine the success or failure of their super-expensive 30-second spots. In other words, was the $2.4 million companies spent on each ad worth it? And who wins the coveted "water cooler" contest -- the groundswell that in years past has made the "wazzup" guys and Monster.com household names.

Boy Meets Girl: Gillette and P&G Hook up Their Brands

Wed, 30 Mar 2005 10:14:19 EST

The merger between Procter & Gamble and Gillette comes with the obvious chemistry of male and female product lines, but the two companies also share a culture of innovation and a history of cooperation, according to Wharton faculty and industry analysts. The combined entity will have annual sales of $60 billion and more than 200 brands. Of those 200, 21 have sales of more than $1 billion a year. Such increased market clout raises questions about the new company's impact on other consumer goods manufacturers, on retailers, and on brand strategy in general.

Mother and Child Reunion: Will the AT&T/SBC Merger Build or Destroy Value?

Wed, 30 Mar 2005 10:14:10 EST

SBC Communications' CEO, Edward E. Whitacre Jr., sees his company's acquisition of AT&T as a deal that will "renew America's leadership in communications technology." The $16 billion merger, however, also raises lots of questions that have yet to be answered, according to experts from Wharton and elsewhere. Unless these issues are resolved, according to one professor, the merger could end up as "a great opportunity to destroy value."

Few Survivors Predicted: Why Most Airlines Are Caught in a Tailspin

Wed, 09 Feb 2005 16:50:03 EST

Delta Airlines cuts fares in a price war that Merrill Lynch estimates will sap $2.5 billion in revenues from the six largest airlines. US Airways and United file for bankruptcy, and almost every other airline --Southwest is one of the exceptions -- reports significant losses. The cost of oil remains stubbornly high, adding significantly to cost pressures. The question is: How do you fix an industry littered with walking zombies? One answer, say Wharton faculty, is to let some of the sickest carriers die -- and stay dead.

James Bond's BMW and Other Product Placements: New, Racier Ways to Advertise

Wed, 15 Dec 2004 15:34:52 EST

The 30-second television spot, once the mainstay of mass marketing, is waning in influence as new technology, including the Internet, cable television and TiVo, fractures the viewing audience. Consequently, advertisers are turning to alternative forms of promotion to reach consumers, according to Wharton faculty and advertising executives. One strategy: Blur the lines between advertising and entertainment in order to build an emotional bond with the consumer. Think "Lion King."

Connecting Marketing Metrics to Financial Consequences

Wed, 17 Nov 2004 17:06:54 EST

Marketers are happy speaking their own language, replete with jargon like "awareness," "share of requirements" and "customer satisfaction." Such terminology works fine in the marketing department and with the advertising professionals who execute marketing plans. But there's a translation problem between that language and the language of profitability and stock price which is the mother tongue of corporate CEOs. "CEOs want to know what a 5% increase in customer satisfaction will do for the bottom line," says Wharton marketing professor David Reibstein, who talked about "Linking Marketing Metrics to Financial Consequences" at the Wharton Marketing Conference on October 15.

Executives Trade Stories on the Challenges of Doing Business in a Global Economy

Wed, 03 Nov 2004 15:18:15 EST

Christopher Rodrigues, CEO of Visa International, brandished a cell phone to make his point about global expansion during a conference in London last month organized by the Economist and the Wharton/INSEAD Alliance. This cell phone, he said, was the unlikely means by which companies like Visa will penetrate new markets, particularly in developing nations. Rodrigues was a keynote speaker at the conference, entitled "Delivering Profits in the Global Economy," whose participants shared their experiences in such areas as global branding, identifying new markets, centralized vs. decentralized management structures, and the leadership skills needed in global organizations.

Companies Must Learn to Achieve the Price Advantage (or Pay the Price)

Wed, 30 Jun 2004 11:55:47 EST

Pricing, the intersection at which untold numbers of buyers and sellers meet every day, lies at the core of any business. Yet it remains misunderstood and poorly managed, according to The Price Advantage, a new book by three consultants at McKinsey & Co. Even executives at successful companies may not fully appreciate how small changes in price can lead to large changes in profitability. Wharton marketing professor David J. Reibstein spoke recently with the authors about the themes in their book.

Whither Global Inequality? Reviving an Old Debate

Wed, 30 Jun 2004 11:55:47 EST

Almost everybody accepts that something should be done to reduce global inequality but few can agree on what. Is government intervention the solution or an obstacle? Does globalization drive further inequality or ease it? What is the proper role of multilateral agencies such as the World Bank or the International Monetary Fund? A panel of academics and business executives discussed these questions at the Global Business Forum organized by the Lauder Institute Alumni Association. Another panel asked whether a single global brand is better than several local brands. The speakers' answer: A resounding "it depends."

Low-carb, High-carb: What's a Baker/Pasta Maker to Do?

Wed, 16 Jun 2004 15:47:10 EST

With the public’s appetite for low-carbohydrate food products on the rise, what is the right strategy for a baker or spaghetti maker these days: Buck the trend or join in the feast? Marketing experts at Wharton say the answer will depend on what manufacturers of breads, pastries, pasta and other high-carb foods think about the future of the low-carb craze. If they feel it’s a temporary fad, then it’s smart not to spend a lot of money launching a low-carb product line to supplement their existing high-carb offerings. But if they feel the low-carb trend represents a permanent shift in dietary habits, they should go ahead and produce low-carb alternatives. What’s clear is that where finicky consumers and diet fads are concerned, there are no easy answers.

Getting Close to the Customer: Quantitative vs. Qualitative Approaches

Wed, 05 May 2004 13:10:03 EST

After adapting information technology to develop ever more sophisticated research methods, marketers are taking a second look at more human, qualitative approaches to tapping into the hearts and minds of consumers. As one Wharton marketing professor says: “We can put each customer’s order on a microchip, but as far as having a sense of what’s inside making him tick,” the answers remain elusive. He and others suggest that companies use both quantitative methods – such as data mining – and qualitative methods, ranging from “concept banks” to “brand communities” to customer advisory boards, always keeping in mind the cost-effectiveness of these varied approaches.

When the CEO is the Brand, But Falls from Grace, What's Next?

Wed, 07 Apr 2004 14:56:28 EST

Company founders have long believed that placing their name on their company signals their willingness to stake their personal reputation and stand behind their products. That’s fine when things are going well and the company and the CEO whose name it bears are held in high regard. But what if the CEO falls from grace? What happens to a company if the CEO's name is in effect its brand — and then that name is tarnished? Marketing experts at Wharton and elsewhere say that making a celebrity out of a business owner can be a good thing, as long as certain safeguards are in place.

CEOs Are Ridiculed for Huge Salaries: Why Aren't Athletes and Entertainers?

Wed, 19 Nov 2003 14:50:39 EST

Actors, athletes and executives are among the most populous inhabitants of the rarified atmosphere of multimillion dollar incomes. Why is it, then, that corporate executives are coming under fire for excessive pay when athletes like Michael Jordan and entertainers like Oprah Winfrey seem to stir no such feelings of resentment? Part of the answer, suggest Wharton faculty and others, is that people see – and get – a direct benefit from what athletes and entertainers provide.

Darn Those Pop-Up Ads! They're Maddening, But Do They Work?

Wed, 13 Aug 2003 00:00:00 EST

They create clutter and are as inescapable as humidity in August. But just how annoying are those pop-up ads that appear unwanted on your computer as you cruise the Internet? How effective are they at selling stuff? E-commerce experts at Wharton and elsewhere say that pop-ups are not universally loathed and irrevocably worthless. Being intrusive does not necessarily translate into bad advertising.

Forging a Link Between Shareholder Value and Social Good

Mon, 19 May 2003 00:00:00 EST

To endure and build long-term value for shareholders, companies must also do well by society, according to speakers at a recent symposium titled, �Building and Valuing a Firm�s Sustainability Strategies,� sponsored by the Wharton Social Impact Management Initiative. Poverty, globalization and the environment all have an impact on business, yet are often perceived as issues that fall beyond the responsibility of corporate management. That shouldn�t be the case, argued symposium participants, who discussed the challenges of operating within the context of a worldwide community.

In Service Businesses, Does Growth Always Lead to Profits? Think Again

Wed, 09 Apr 2003 00:00:00 EST

In the movie �Field of Dreams,� Kevin Costner�s character takes on the job of building a ballpark because of a promise: If you build it, they will come. Does the same kind of thinking � if you achieve growth, you will be profitable � hold true for service businesses? No, according to two Wharton faculty members who say it is not by chance that organizations with a heavy emphasis on service have managed to successfully combine growth and profitability while other companies have not. One key issue: economies of scale don't work the same way in services as they do in manufacturing.

Is the Happy Meal over for McDonald�s?

Wed, 18 Dec 2002 00:00:00 EST

Despite its stature as a global mega-brand, with 30,000 restaurants and 46 million customers a day, McDonald�s can�t seem to supersize its earnings. Sales and profit growth at the pioneering global fast-food business has stalled and the company�s shares are trading at seven-year lows. Last month, McDonald�s announced it would record its first quarterly loss ever, following a disastrous price war with U.S. burger rivals. The question now for McDonald�s is how to build on the formula that has made it the king of the fast food business for more than 40 years.

Marketers Turn to Metrics to Measure the Impact of Their Initiatives

Wed, 14 Aug 2002 00:00:00 EST

Until recent times marketing was perhaps the only corporate department that did not use metrics that were meaningful to bottom-line-oriented CEOs and CFOs. But that indifference to metrics is becoming a thing of the past. Marketing executives are paying more attention than ever to ways in which they can measure the impact of marketing initiatives on their companies� financial performance. Developing appropriate metrics to capture the financial impact of marketing will be a key topic for discussion at an upcoming conference co-sponsored by Wharton, McKinsey & Company and the Marketing Science Institute.

What�s In a Name? Not Much Without a Branding Strategy

Wed, 17 Jul 2002 00:00:00 EST

As businesses struggle to differentiate themselves in an increasingly crowded marketplace, the challenge of choosing a company name looms large. How creative should a name be and what kind of image should it project? Knowledge@Wharton looked at some existing corporate names � old and new, effective and not so effective � and asked marketing professors for their views of the corporate name game.

Will Commission Cuts Kill the Small Travel Agent?

Wed, 08 May 2002 00:00:00 EST

When an industry�s revenue base vanishes, it�s time to collapse � or transform. That�s the choice travel agents have faced since March when eight of the nation�s ten largest airlines reduced their base commissions to zero. As a result, agents will have to change from being commission-dependent retail clerks into service-focused professionals with knowledge that leisure travelers are willing to pay for, according to Wharton professors and other experts.

The Failure of Customization: Or Why People Don�t Buy Jeans Online

Wed, 27 Mar 2002 00:00:00 EST

Ever since the Internet emerged as a sales channel in the 1990s, it has been thought that one of the chief advantages of e-commerce would be its ability to facilitate the customization of goods and services for consumers. That promise, however, is not yet close to being realized, according to experts at Wharton and an e-commerce research firm.

The New Business Reality

Wed, 30 Jan 2002 00:00:00 EST

ideas about what effect those events would have on business and the economy. It was clear, however, that even before the attacks, major changes were underway that would alter the business landscape. To help understand these changes, Wharton�s Aresty Institute of Executive Education held a three-day symposium in December called Wharton on the New Business Reality: Scenarios and Strategies for the Future. Knowledge@Wharton covered the symposium.

The Microsoft Settlement: A Remedy That Pleases Almost No One

Wed, 05 Dec 2001 00:00:00 EST

The November 2, 2001 settlement between Microsoft and the U.S. Justice Department really didn�t settle anything, considering the amount of criticism leveled at the terms of the deal. But part of the problem, say Wharton professors, is the difficulty of finding remedies that are both effective and don�t cause injury. Given the growth of new economy firms, it�s a dilemma that is only going to get worse.

Will Consumers Be Willing to Pay for Their Formerly Free Lunch on the Internet?

Wed, 29 Aug 2001 00:00:00 EST

Now that many web operators have admitted the failure of advertising-based models that relied on attracting visitors with free content, the next step is charging for access to information. The question for content providers is whether Net users can be persuaded to pay for services that they are accustomed to receiving for nothing.

Can Priceline Remain Profitable?

Wed, 15 Aug 2001 00:00:00 EST

Priceline, the online travel company, once seemed to be headed for disaster like dot-coms such as Webvan and eToys. Instead, two weeks ago the company announced that it had made a small profit in the second quarter. Was this a flash in the pan? Will Priceline be able to keep up this performance? Experts at Wharton say the company is doing some things right, but it still faces massive challenges and growth will be hard to sustain.

How Companies Sponsor, Listen in and Learn From Chat Rooms

Wed, 01 Aug 2001 00:00:00 EST

When Chrysler wanted to promote interest in its new stylized PT Cruiser, the company set up chat rooms and discussion boards on its own corporate website where customers could share information about the product and create that all important buzz. Yes, there are downsides to corporate chat rooms/discussion boards, but for certain companies the benefits can be substantial.

Starting a Business Today: Less Competition But Also Less Cash

Wed, 20 Jun 2001 00:00:00 EST

With new headlines every week confirming the poor health of the U.S. economy, one might wonder who in their right mind would pick the present time to launch a new company. Actually, say some Wharton faculty, the outlook isn�t all that bad if you choose the right business in the right market. Or, as one professor says: "Asking whether or not it�s a good time to start a business is like asking how big is a fish��

Despite a Turbulent Take-off, Orbitz Is in Demand

Wed, 20 Jun 2001 00:00:00 EST

Since its bumpy launch on June 4, online travel agency Orbitz has overcome technology glitches and customer service problems on its way to providing what it says will be �the most low fares to Planet Earth.� Questions remain as to whether Orbitz can beat the competition and earn consumers� loyalty, but for now at least it seems that air travelers are more than willing to buckle their seatbelts and enjoy the ride.

Are There Lessons to Be Learned from Internet Porn Sites?

Wed, 09 May 2001 00:00:00 EST

Given that pornographic sites have long been considered one of the few moneymakers on the Internet, it was easy to understand why Yahoo recently tried to improve access to its adult offerings. The move backfired, but it did raise questions about the pervasiveness of adult material on the web and its relationship to more mainstream sites.

Can You Learn Anything From These Sites' XXXpertise?

Wed, 25 Apr 2001 00:00:00 EST

Winners and Losers in the E-Commerce Shakeout

Wed, 06 Dec 2000 14:32:21 EST

When the dust finally settles, who will win the e-commerce war? Which companies will lose the battle? As well-known companies like Pets.com continue to announce their decision to close down their operations, this question has crucial implications for the surviving dot-com companies as well as traditional brick-and-mortar businesses. A conference sponsored by the Wharton E-Business Initiative, the Marketing Science Institute and the William and Phyllis Mack Center on Managing Technological Innovation recently discussed what separates winners from losers in e-business. The overall conclusion: E-business is still in its infancy, and the rules are still being written�and re-written.

The Problem with Priceline

Mon, 16 Oct 2000 07:58:08 EST

Priceline may be one of the best-known shopping sites on the Internet, but with its stock price dropping sharply on Sept. 27 and profits still non-existent, some are beginning to wonder about the company�s viability. Knowledge@Wharton takes a look at Priceline�s strategy, market appeal, competitors and customer base.

Just-in-Time Education: Learning in the Global Information Age

Wed, 30 Aug 2000 13:27:55 EST

Is the lecture hall outdated? Management education needs to be radically rethought for an Internet age, becoming more customizable, with delivery anytime and anyplace, and more applied, interactive learning. Two Wharton professors, Jerry Wind and David Reibstein, discuss a new paradigm for management education facilitated by advances in information technology and how it might be integrated into a decision support system. Wind is also leading the creation of a program that attempts to implement these principles in practice.

What�s Behind the Food Industry�s Appetite for Mergers?

Wed, 05 Jul 2000 14:32:30 EST

The food industry apparently has a huge appetite for mergers. In the past few weeks Philip Morris has announced its intention to buy Nabisco Holdings for $14.91 billion, and Unilever has said it plans to pay an estimated $20.3 billion to acquire Bestfoods, the maker of Knorr soups and Skippy peanut butter. In a relatively smaller but still significant transaction, ConAgra has agreed to take over International Home Foods�the maker of Chef Boyardee pasta products and Bumble Bee seafood products�for $1.6 billion plus the assumption of debt. What is behind this sudden hunger for acquisitions? Huge egos, the Internet, cost savings through economies of scale, and a drive to regain dominance over retail distribution channels are feeding the frenzy, according to industry watchers�and the end isn�t here yet. More mergers�possibly involving smaller food companies�could be on their way. But the fast-paced M&A activity also has some industry watchers asking whether the strategy is worth the price.

How to Keep Customers In Line for Your On-line Business

Wed, 24 May 2000 14:45:26 EST

Too many new Internet businesses are so obsessed with getting customers that they don�t see the big picture: Success ultimately depends on getting those customers to make more than one purchase, says Wharton marketing professor David Reibstein. During a presentation on May 19 titled, �Keeping Your E-commerce Customers Coming Back,� Reibstein emphasized the importance of service and support. �The 1998-99 Internet retailing lesson was to buy and acquire customers. The April 2000 lesson may be to look at what people spend in the long run and figure out how to keep them around.�

Christmas E-tailers: Will It Be Ho-Ho or So-So?

Fri, 10 Dec 1999 09:12:52 EST

If you build it, they will come. That may be true for baseball fans, but what about for holiday shoppers? For many e-tailers who have spent millions building and advertising their web sites, it�s a make-or-break month. And for consumers, it will either be an exercise in frustration, or a very merry way to shop �til they drop.

Who's Buying on the Internet?

Wed, 01 Sep 1999 12:09:12 EST

Almost everyone who has anything to do with the electronic commerce explosion wants an answer to that question. David J. Reibstein, a marketing professor at Wharton, attempts a reply in a chapter from a new book, Digital Marketing. While many observers of e-commerce focus on the business-to-business market, Reibstein ploughs through data in the consumer market.