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Continued from previous page
A more recent study on the effect of inventory on buying habits,
meanwhile, challenged traditional economic frameworks that suggest
that full coffers negatively affect a person's willingness to buy:
laundry room shelves stocked with detergent, it stands to reason,
mean a consumer won't likely buy more on their next shopping
trip. Bell's research found, however, that when it comes to discretionary
food products such as ice cream and soda, the opposite
actually occurs. "If it's a discretionary food product, the level of
inventory seems to directly affect the rate of purchase," Bell said.
"People actually consume items like this more quickly when they
have more on hand. Other more mundane product categories like
paper towels, butter and detergent don't seem to be affected."
And in the brave new world of Internet retailing, Bell studied
the effects of word-of-mouth or other "social contagion" factors on
consumer willingness to try an online retailer, using data provided
by Lisa Kent, the CEO of netgrocer.com, who was introduced to
Bell by a Wharton MBA student. "For retailers, 'location, location,
location' is a familiar mantra," Bell said. "But for the Internet
retailer, the physical location of the store is meaningless, and this
unique market context, with geographically dispersed customers
and competitors, raises important and largely unstudied questions
about the evolution of the customer franchise."
Bell's study found a significant "neighborhood effect," with a
50-percent increase in the base rate of consumers trying an online
retailer's services once they talked about or otherwise observed its
use locally. "What seems to be critical," Bell said, "is the location
of existing customers relative to new potential customers. And why
this is really important for the manager is that if this effect is really
going on, maybe there's a way for you to feed the process. Maybe
if you put a billboard up on a major highway and get people in a
very urban, dense region to buy first it's going to spread a lot more
quickly." Interestingly enough, this effect disappears for repeat purchases—once
consumers have their own experience they rely on this
and are more likely to disregard the actions of others.
As for the future, Bell has ongoing projects in retailing customer
base evolution, customer response to marketing initiatives, and
coordination issues. He is also interested in trying to explain and
describe fundamental market characteristics, such as price dispersion
and the diffusion of information, and is working on a textbook
using his marketing strategy notes as a starting point.
"I'd like to advance the use of scientific approaches to tackle
important marketing problems," Bell said. "I'm a firm believer in
the value of data, models and empirical analysis to complement
managerial intuition, and I try to demonstrate this value in my own
research, whether explaining a particular market phenomenon or
simply quantifying the response to a marketing decision. This view
of academic research has a big influence on my teaching as well."
Bell enjoys introducing students to a new "spin" on marketing—namely
that marketing problems are amenable to scientific
analysis and that practitioners can benefit tremendously from this
approach. This philosophy, Bell said, is typically somewhat surprising
to students, as they often have a completely different view of
marketing. "It's very gratifying when they come to embrace this
idea," Bell said. "I've been fortunate to teach the marketing strategy
elective because this course allows me a lot of flexibility with respect
to content and approach. I enjoy interacting with students, challenging
them and being challenged in the classroom, and I feel very
fortunate to be able to interact with students of the caliber that we
have at Wharton."
Frequent contributor Nancy Moffitt is the former editor of the Wharton Alumni Magazine.
EDITOR'S NOTE: Complete versions of most of David Bell's research
papers can be found at
www-marketing.wharton.upenn.edu/people/faculty/bell.html.
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