From Merchandising to Electronic Commerce

Wharton started researching and teaching marketing before the field existed, initiating courses in what was then known as "merchandising." The School went on to conduct some of the earliest studies of consumer preferences and created conjoint analysis, one of the most powerful analytical tools for marketing. It carried marketing professionals into the age of television, and Wharton faculty continue to advance understanding of the rapidly evolving world of electronic business. Today, Wharton has one of the largest, most cited and most accomplished marketing departments in the world, with strengths in e-commerce, consumer behavior, strategy, modeling, and international marketing.

Marketing was a virtually unsettled frontier when Wharton began its first initiatives in this area. In 1909, Herbert Hess, an advertising expert, came to Wharton and launched one of the first programs in the field, a course in advertising and salesmanship. He established a "merchandising" department at Wharton that boasted ten faculty members by 1923. At the time, marketing had few laws or analytical frameworks, but Wharton faculty soon began to change this with publications and research that put an indelible imprint on the profession and on the study of marketing.

Hess pioneered consumer marketing research in the 1920s and 1930s. He initiated one of the earliest investigations of consumer preferences by analyzing such factors as crowd psychology, sense experience, instinct, memory, and attention.

Under the leadership of Wroe Alderson, Wharton began to build a more scientific basis for marketing research. The School became a major force in applying analytic models to marketing challenges. Alderson created Wharton's first marketing theory seminar in the 1960s. With a firm belief that theory and practice go hand in hand, he wrote the book, Marketing Behavior and Executive Action, which focused on social science rather than institutional economics.

This analytical approach was greatly advanced by Marketing Professor Paul Green, who developed conjoint analysis in the late 1960s. This measurement tool allows companies to analyze consumer preferences and buying intentions, as well as how they may react to changes in existing products/services or product introduction. After its development, conjoint analysis became the marketing discipline's most powerful technique for analyzing consumer tastes and helped make Green marketing's most cited author. The framework has been used internationally by thousands of companies, including the hotel conglomerate Marriott Corporation in creating its Courtyard by Marriott chain, and by regional transportation agencies in the New York/New Jersey metropolitan area to investigate the potential of the now-successful EZPass electronic toll collection device.

In 1996, Wharton took its marketing expertise into the digital age with the founding of the Wharton Forum on Electronic Commerce. This collaborative industry/academic partnership engages in a wide range of studies of marketing principles in this emerging environment, drawing together the best of senior faculty at Wharton and other schools. Forum faculty represent a wide range of disciplines — from marketing to public policy to operations to technology — thus bringing the range of perspectives needed to understand electronic commerce and its implications for business. They are studying issues such as privacy, advertising, analyzing customer data, disintermediation, and the impact of site design. Among its initiatives, the Forum established the Wharton Virtual Test Market, which now has more than 18,000 panel members around the globe participating in studies of the new medium. Thomas P. Gerrity, former Wharton dean, assumed directorship of the Forum on July 1, 1999.

"At the crux of marketing is understanding the customer, and Wharton's faculty have been pioneers in the development of market research techniques that enable businesses to better understand their customers. That's going to be one of the major features of e-commerce — that ability to learn what your customers really want and offer it to them."
David J. Reibstein, William Stewart Woodside Professor, Professor of Marketing

Herbert Hess (above center) came to Wharton in 1909 to establish the forerunner of Wharton's Marketing Department. Wroe Alderson (above left, seated), was one of the first researchers to apply analytical models to marketing. His student, Paul Green (standing), went on to create conjoint analysis, one of the most powerful techniques for consumer analysis. It made Green the most cited author in marketing. The Wharton Forum on Electronic Commerce, an industry-academic partnership, is advancing understanding of marketing in a digital age.

"There isn't another marketing department with the size and depth of Wharton's. The combination of talent and size at Wharton is really unparalleled."
Paul Green, Professor of Marketing