Wharton Marketing Department Turns 100 World’s Largest Marketing Faculty Turns Research Into Action
As Wharton’s Marketing Department celebrates its 100th anniversary this year, its professors – the world’s largest, most cited, and most published marketing faculty – are constantly renewing their commitment to combine innovative research with real-world results.
“This is a department that focuses on translating state-of-the-art, cutting-edge research into decision tools that managers can use to make better decisions,” explains current chairman Stephen Hoch. "And this was the case from the get go."
Indeed, the concept of “conjoint analysis” – which revolutionized 20th century marketing by focusing on what to sell in the future, rather than on what appealed to consumers in the past – originated with Wharton marketing professor emeritus Paul Green. One of the icons of 20th century marketing, Green transformed business practice around the world, from lodging and transportation (including the creation of Courtyard by Marriott hotels and the EZPass highway toll system) to medical research, public policy, and industrial engineering.
Analytical Business Solutions
Today’s marketing department continues Green’s tradition, using research and quantitative techniques to provide practical solutions for companies around the world. “With the use of scanner data and great analytics, marketing today is much more a science than an art,” explains professor David J. Reibstein, the former executive director of the Marketing Science Institute. “The strength of the department now is in this use of analytics.”
For example, in the late 1990s, professor Leonard Lodish led a consortium of manufacturers, ad agencies, and TV networks in a landmark study called “How TV Advertising Works,” whose results forever changed how large companies manage their advertising. The research revealed that nearly half a company’s ads were ineffective, while it also provided a company with new tools to manage its TV advertising and set priorities for ad campaigns.
Creating alternatives to long-held, ineffective business practices focuses much of the marketing department's research. Professor Peter Fader worked with the music industry in the late 1990s to create diagnostic forecasting models. “It's important to realize just how astonishingly consistent the buying patterns are across industries,” argues Fader. “People are people. When you focus on the behavioral data as opposed to the surface-level details of a product, it doesn't really matter what product it is.”
Similarly, associate professor David Bell and assistant professor Xavier Dreze proposed a radical change in trade promotions for stores and manufacturers: “pay-for-performance” based on what retailers sell, instead of up-front discounts with no sales incentives. Their work has more than doubled the allocations that packaged goods retailers make to efficient pay-for-performance deals.
Identity, Emotion, and Variety
The marketing department’s research also investigates the more subjective and qualitative aspects of consumer behavior. For example, assistant professor Americus Reed II works on the role of consumers' self-concepts in buying decisions. Why do smokers keep smoking? Why do brands like Harley Davidson, Starbucks, and Nike engender such loyalty? In a recent study, Reed and marketing colleague Lisa Bolton found that brand judgments linked to a consumer’s sense of identity are more immovable or "sticky" than other kinds of consumer loyalties.
Along similar lines, assistant professor Patricia Williams examines how emotional responses influence consumers’ behavior. Most recently, she studied how advertising impacts older and younger consumers. Her research confirmed the belief that older consumers care more about emotional appeals, but not because they have reduced cognitive abilities. “With a perception that time is ending,” Williams explains, “you care less about learning new facts, and more about having emotionally satisfying encounters and making your life pleasurable in an affective sense."
In her work, professor Barbara Kahn, vice dean of Wharton and director of the Undergraduate Division, explores how variety affects buying habits. Kahn's research finds that the perception of variety, even when illusory, stimulates people to consume more. This finding forms part of the recent body of work that suggests that choice, price, and other environmental factors may affect the ability to control eating or spending as much as willpower.
Identifying and understanding such quirks of consumer behavior, Hoch says, is one of the ways that the marketing department “relishes diversity in different approaches to the problems that marketers face day in and day out.” This range of methods is reflected in the department’s wide portfolio of innovative research, as well as in its depth and breadth of rigorous courses, such as Consumer Behavior, Retail Merchandising, and Entrepreneurial Marketing.
“At the end of the day,” as Hoch concludes, “one of the great things about being a marketing professor at Wharton is that we have a whole heck of a lot of fun.”
You can read more about the Wharton marketing department in this special feature of the Wharton Alumni Magazine.
