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FieldExperimentsinMarketing DuncanSimester MITSloanSchoolofManagement January2015 FieldExperimentsinMarketing Marketingisadiversefieldthatdrawsfromaricharrayofdisciplinesandabroadassortmentof empiricalandtheoreticalmethods.Oneofthosedisciplinesiseconomicsandoneofthemethodsused toinvestigateeconomicquestionsisfieldexperiments.Thehistoryoffieldexperimentsinthemarketing literatureissurprisinglylong.EarlyexamplesincludeCurhan(1974)andEskinandBaron(1977),who varyprices,newspaperadvertising,anddisplayvariablesingrocerystores.Thischapterreviewsthe recenthistoryoffieldexperimentsinmarketingbyidentifyingpaperspublishedinthelast20years (between1995and2014).Wereporthowthenumberofpaperspublishedhasincreasedduringthis period,andevaluatedifferentexplanationsforthisincrease.Wethengroupthepapersintofivetopics andreviewthepapersbytopic.Thechapterconcludesbyreflectingonthedesignoffieldexperiments usedinmarketing,andproposingtopicsforfutureresearch 1. PapersthatReportFieldExperiments Wefocusonthefiveleadingmarketingjournalsthatpublishpaperswithaneconomicsfocus.They include:theJournalofMarketing(JM),theJournalofMarketingResearch(JMR),MarketingScience (MktSci),QuantitativeMarketingandEconomics(QME),andthemarketingdepartmentofManagement Science(MngSci).1Toidentifyrelevantpaperswefirsthadaresearchassistantreadeveryissueofthe journalspublishedbetween1995and2014.WethensupplementedthisinitiallistwithaWebofScience topicsearch. Thisprocessyieldedover300papers.Wethenreadandscreenedthesepaperstogenerateafinal sampleof61papers.2Inthisscreeningwerestrictedattentiontostudiesinwhichtheresponsemeasure representedabehavioralresponseinthe“field”.Weexcludedstudiesinwhichtheresponsewasa surveyorperceptualmeasure,suchascustomerevaluationsorpurchaseintentions.Wealsoexcluded studieswheretheresponseswereobtainedinalaboratorysetting,includingstudieswheretheresponse environmentwascreatedbytheresearchers. Thescreeningalsorestrictedattentiontostudiesthatreportedexperiments,ratherthanjustanalysisof historicaldata.Anexperimentincludesatleasttwoexperimentalconditions,withexogenousvariation introducedbytheresearchers.Inmostcasesthisexogenousvariationresultsfromvariationacross randomlyselectedcustomersamples.Inothercasesitinvolvesrotationoftreatmentsovertime,or matchedpairsofproductsinanauctionsetting. The61papersactuallyreportfindingsfromatotalof86fieldexperiments,with18(30%)ofthepapers reportingmultiplefieldexperiments.Thisincludestwelvepapersthatreporttwoexperiments,five papersthatreportthreeexperimentsandonepaperthatreportsfindingsfromfourexperiments. 1 ThetwomajormarketingjournalsnotincludedinthislistareJournalofConsumerResearch(JCR)andtheJournal ofConsumerPsychology(JCP).Paperspublishedinthesetwojournalshaveastronglypsychologicalperspective. 2 Althoughwebelievethatthelistof61papersisextensive,itisunlikelytobecomplete.Werecognizethatwewill haveoverlookedsomepapersthatreportfieldexperiments,andapologizetotheseauthors. 1|P a g e DateofPublication Ourfirstinvestigationwastocomparethedatesthepaperswerepublished.Thepublicationdatesare summarizedinFigure1.Papersreportingfieldexperimentswererarebetween1995and1999,withjust threeexamplesidentified.Thefrequencyhassinceincreasedsharply;between2010and2014atotalof 37fieldexperimentpaperswereidentified. Figure1:PublicationsbyYear 40 37 35 NumberofPapers 30 25 20 13 15 8 10 5 3 0 1995to1999 2000to2004 2005to2009 2010to2014 Thisfigurereportsthenumberofpaperspublishedby5-yearperiod.Thesamplesizeis 61(papers). Therearelikelytobemultiplereasonsforthistrend.Oneexplanationisthatthefieldhasbecomealot moreconcernedaboutendogeneitywheninterpretingresultsestimatedusinghistoricaldata.Before 2000,themarketingliteraturecontainednumerouseconometricpapersstudyinghistoricalsupermarket scannerdata.3Manyoftheseearlypaperspaidlittleattentiontotheendogeneityoftheindependent variables.Thishassincechanged.Thequantitativemarketingfieldnowpaysconsiderableattentionto thelimitationsinherentininterpretingendogenousvariables.Thefocusonendogeneitycanpartlybe attributedtoa1999paperthathighlightedtheselimitations(Villas-BoasandWiner1999).Thechange alsocoincideswiththedevelopmentofstructuralmodelsinthenewempiricalIOliterature.Publication inaleadingquantitativemarketingjournalnowrequiresthattheauthorsjustifythesourceoftheir identification.Manypapersusingeconometricsmethodsnowusestructuralmodelstoaddressthis concern.Fieldexperimentsprovideresearcherswithanalternativemechanismtoovercomethishurdle. Theincreasedprominenceofconcernaboutendogeneitymayhavecontributedtothesharpincreasein thenumberofpublishedfieldexperiments. 3 ThisliteraturetracesitsoriginstoGuadagniandLittle(1983),whichdemonstratedhowtoapplymultinomiallogit toscannerdata. 2|P a g e Asecondexplanationforthegrowthinthenumberofpublishedfieldexperimentsisthatithasbecome easiertoconductfieldexperiments.ThedevelopmentoftheInternetcoincideswiththegrowthinthe numberofreportedexperiments.ItisnowpossibletoconductfieldexperimentsusingeBayandGoogle AdWords,withoutrequiringactiveparticipationfromacooperatingcompany.Evenforstudiesthatdo requirecooperation,thiscooperationisoftenmucheasiertoobtaininanInternetsettingbecausethe costofconductingtheexperimentsisrelativelylow,andbecausemanyfirmsalreadyconducttheirown experiments.Firmsthatconductexperimentsaspartoftheirownoperationshaveimplicitlyrevealed thattheyunderstandthevalueoffieldexperiments,andarelikelytohaveinvestedininfrastructureto supporttheirimplementation.4 Wecanevaluatethisexplanationbyinvestigatingwhethertheformatusedtoimplementexperimental variationhaschangedovertime.Inparticular,wegroupedthestudiesintothreecategoriesaccording tothetypeofexperimentalmanipulation: Physical in-personinteractionsinahome,ataworkplace,orinabricksandmortarretail store(includingshelf-signageorproductassortments) DirectMail telephone,catalogorotherdirectmail Internet searchordisplayadvertising,eBay,email,Twitter,websitecontent,oranother computerorInternetinteraction InFigure2wereporthowuseofthesemanipulationshaschangedovertime.Thetotalsamplesizeis60 observations.5 Inthefiveyearsbetween2010and2014therewerenineteenpaperspublishedthatusedtheInternet toimplementexperimentalvariation,representingmorethanhalfofthefieldexperimentpaper publishedduringthisperiod.Nineteenpapersinthisfiveyearperiodcontrastswithjustthreepapersin thepreviousfifteenyears.WeconcludethatitislikelytheInternetcontributedtothegrowthinfield experimentpapersacrossthedataperiod. However,itisnotablethatwealsoseegrowthinthenumberofpapersimplementingexperiments throughphysicalmanipulationsin-home,attheworkplace,orinphysicalretailstores.Therewere twelvepapersreportingphysicalmanipulationsbetween2010and2014,comparedtoatotalofjust ninepapersinthepreviousfifteenyears.Itseemsthattheeaseofconductingexperimentsonthe Internetisnotacompleteexplanationforthegrowthinthenumberofpublishedpapers. 4 WemightexpectthatifitiseasiertoconductfieldexperimentsinInternetsettingsthenpapersthatusethis settingaremorelikelytoreportfindingsfrommultipleexperiments.Itturnsoutthatthereverseistrue;papers reportingfindingsfromInternet-basedfieldexperimentsareactuallylesslikelytoreportmultiplestudies. 5 Infourpapersthedescriptionofthetreatmentwasinsufficienttoallowclassification.Moreover,threepapers eitherreportedmultiplestudiesusingdifferenttypesofvariation,oruseddifferenttypesofvariationacross differenttreatmentswithinthesamestudy.Thesethreepaperswerecodedasappearinginmultiplecategories. 3|P a g e Figure2:PublicationsbyTypeofExperimentalManipulation 20 15 10 5 0 1995to1999 2000to2004 Physical 2005to2009 DirectMail 2010to2014 Internet Thisfigurereportsthenumberofpaperspublishedusingeachtypeofexperimental manipulationineach5-yearperiod.Thesamplesizeis60. Athirdexplanationisthatthetopmarketingjournalsarepublishingmorepapers(notjustmorefield experimentpapers).In2006MktSciincreasedfromfourissuesayeartosixissuesayear,andin2008JM andJMRmadethesametransition.Inaddition,QMEbeganpublicationin2003.Theresultisanincrease inthetotalnumberofpublishedpapers.Toinvestigatetheextenttowhichthisexplainstheincreasein thefrequencyoffieldexperimentpapers,wecountedthetotalnumberofpaperspublishedacrossthe 20-yearperiod(1995to2014)andreportahistogramoftheproportionpublishedineach5-yearperiod. Wedothisseparatelyforallpapers,andforjustthosepapersthatreportfieldexperiments.6The findingsarereportedinFigure3. Whiletherehasbeengrowthinthetotalnumberofpaperspublished,thisgrowthisalotsmallerthan thegrowthinthenumberoffieldexperimentpapers.Whencountingallofthepaperspublished between1995and2014,wefindthat31%werepublishedinthelast5years(2010-2014).Incontrast, 64%ofallfieldexperimentspaperswerepublishedinthatperiod. Weconcludethatthesharpgrowthinthenumberofmarketingpapersreportingfieldexperimentscan beattributedtoseveralfactors.Thefielditselfhasgrownandsotherehasbeengrowthinthenumber ofpaperspublished,includingfieldexperimentandnon-fieldexperimentpapers.Second,theeaseof conductingfieldexperimentsovertheInternetmayalsohavecontributedtothephenomenon.Finally, themarketingfieldnowpaysmoreattentiontotheendogeneityofindependentvariables.Field experimentsareaneffectivemechanismforresolvingconfoundsduetoendogeneity. 6 ThetotalnumberofpapersinMktSci,JMandJMRarecalculatedusingentriesintheWebofScience.We excludedpaperspublishedinMngSciastheWebofSciencedoesnotidentifywhichdepartmenteditoraccepted thepaper.UnfortunatelytheWebofSciencedoesnotindexthefirstfewissuesofQME,andsoforthisjournalwe manuallycountedthenumberofpaperspublishedineachissue. 4|P a g e Figure3:HistogramoftheNumberofPapersPublishedinEach5-YearPeriod AllPapersComparedtoFieldExperimentPapers %ofallpapersacrossall20years 80% 61% 60% 40% 20% 31% 19% 18% 31% 21% 13% 0% 5% AllPapers FieldExperimentPapers Thisfigurereportsahistogramofhowmanypaperswerepublishedineach5-year period.Weseparatelyreportthefindingsforallpapers,andforjustthosepapersthat reportfindingsfromafieldexperiment.Thesamplesizeis3,250forallpapers,and61for thefieldexperimentpapers.Thepercentageswithineachcurveaddto100%. ChoiceofTopics Inthefigurebelowwecategorizethe61papersintogeneraltopicareas.Thiscategorizationrevealsthat thepapersaredominatedbytwotopics:pricingandadvertising.Furtherinvestigationalsorevealsclear differencesinthedistributionoftopicsovertime.Priorto2010,halfofthepapers(12of24)addressed pricingtopics,withonlytwopapersinvestigatingadvertisingissues.However,thisdominancehas reversed,withmorepapersinthelastfiveyearsstudyingadvertisingissues(13)thanpricingissues(11). Understandably,therecentfocusonadvertisinghasbeendominatedbyresearchquestionsrelatedto Internetadvertising.ManyofthesepapersstudycharacteristicsofInternetadvertisingthatsimplydid notexistatthestartofthedatasample.Forexample,dynamicretargetingofadvertising(targeting advertisementsusingindividualbrowsingbehaviorsonotherwebsites)wasnotpossibleearlierinthe dataperiod.Similarly,personalizingadvertisingusinginformationpostedonFacebookpagesisa relativelyrecentadvertisingtechnique. Inthesectionsthatfollowwebrieflysurveythepapersoneachofthesetopics.Wealsosummarizeallof thepapers,groupedbytopic,inatableasanAppendixtothischapter. 5|P a g e Figure4:ChoiceofTopics 30 23 20 15 11 8 10 4 0 Pricing Advertising Model Product Validation Development Other Thisfigurereportsthenumberofpublishedpapersbytopic.Thesamplesizeis61 papers. 2. PricingTopics The23papersinvestigatingpricingissuescanbegroupedintofoursub-topics: 1. 2. 3. 4. Whototargetwithdiscounts? Whattypesofdiscountsaremosteffective? Priceasasignal Multi-parttariffsandotherpricingschemes Theeffectivenessofdiscountshasbeenafavoriteresearchtopicinthemarketingfield.Thisinpart reflectsboththepervasivenessofdiscounts,andrecognitionthattheycanhavetremendouspositive andnegativeimpactsonunitsalesandfirmprofits.Forexample,Ailawada,Harlam,CésarandTrounce (2007)studytheunitsalesandprofitimpactofeverydiscountofferedbythenationalpharmacychain CVSin2003.Theyreportthatmorethan50%ofthepromotionsareunprofitablebecausethelossof marginisnotfullyoffsetbytheincrementalsales.Usingaverylarge-scale13-weekfieldtest,inwhich theysimplywithheldpromotionsin15productcategoriesin400stores,theydemonstratedthatCVS couldimproveitsprofitsbyover$50million. WhotoTargetwithDiscounts? Threefieldexperimentscontributetoourunderstandingofwhoshouldreceivediscounts.Dholakia (2006)showsthatsendinga$5-offdiscountcoupontocustomerswhopreviouslypaidfullpricecan actuallyleadtolessdemand.Thisstudywasconductedusingrandomlyselectedcustomersofalarge 6|P a g e automobileservicingfirm.7AndersonandSimester(2001a)reportthatofferingextendedpayment termstocustomersofaprestigiousjewelrycatalogcanlowerdemand.Theauthorsinterpretthiseffect asanadversequalitysignal,withtheinstallmentbillingsignalingthattheproductsaresuitablefor customerswhoaremoresensitivetopricethanquality.Inalaterstudywithadifferentcatalogretailer, thesameresearchteamreportthatdeepdiscountshavemorepositivelong-termexternalitieswhen targetedatnewcustomerscomparedtoexistingcustomers(AndersonandSimester2004).Forthe existingcustomersthelong-termeffectswerenegative;thedeepdiscountsresultedinthesecustomers acceleratingtheirpurchasesandbecomingmorepricesensitive.Incontrast,deeperdiscountsincreased futurepurchasesbynewcustomers,apparentlyduetomorefavorableexpectationsaboutfutureprices. Collectivelythesestudiessuggestthatdiscountsaremosteffectivewhentargetedatcustomerswho are:newer,whohavepaidlowerpricesinthepast,andwhoarerelativelymoreconcernedaboutprice thanquality. WhichDiscountsareMostEffective? Fieldexperimentshavebeenusedtoaddressnotjustwhoshouldreceivediscounts,butalsowhatform thediscountsshouldtake.Collectivelytheliteraturenowprovidesarichanswertothisquestion.Inthe oldestpaperinoursample,HochandDhar(1996)reportthefindingsfromtwofieldexperiments conductedat86supermarketstoresintheDominick’sFinerFoodssupermarketchain.8Theyshowed thatcouponsleadtoa35%largerincreaseinunitsalesthananequivalentdiscountintheshelf-price. Moreover,becauseredemptionofcouponsisincomplete,thisleadstoa108%largerincreaseinprofits. Intwolarge-scalefieldexperimentsconductedatthe(apparently)same86supermarkets,Wansink, KentandHoch(1998)illustratetwowaysthatretailerscanincreasethenumberofunitsthatcustomers purchase.Imposingaquantitylimitof12unitspercustomersledtocustomerspurchasingtwiceas manyunits(perbuyer)comparedtoaquantitylimitof4units.Framingdiscountsusingmultipleunit promotions(e.g.2for$1.50)insteadofsingleunitpromotions(75-centseach)alsoincreasedthe numberofunitsthatcustomerspurchased.Bothoftheseeffectsareinterpretedasexamplesof customersanchoringonretailer-providedcuestodecidehowmanyunitstopurchase.Inanother exampleofframing,Chen,Marmorstein,TsirosandRao(2012)showthatdescribingadiscountas“50% morefree”ismoreeffectivethan“33%offtheregularprice”,eventhoughbothareeconomically equivalent.Theirstudyismotivatedbyrelatedevidencethatcustomerstendtofocusonthe% magnitudeofthediscount,andneglectthebaseoverwhichthepercentageiscalculated. RamanathanandDhar(2010)presentfindingssuggestingthattheimpactofdifferenttypesof promotionsmayvaryaccordingtothecustomer’spsychologicalorientation.Customersenteringa Chicagogrocerystorewereprimedtothinkofeitherenjoyingthemselvesoractingsensibly.Those primedtoenjoythemselvespurchasedmoreitemswhentheyreceivedcouponswithlongerexpiration dates,andwhenthecouponswereframedas“Get$xOff”ratherthan“Save$x”.Incontrast,customers 7 RelatedfindingsfromtwofieldexperimentsarereportedbyAndersonandSimester(2010),whichispublishedin aneconomicsjournal.Customersofapublishingcatalogandanapparelcatalogwerelesslikelytoplacea subsequentorderiftheyreceivedacatalogcontaininglowerpricesthantheyhadrecentlypaidforthesameitem. 8 ThisisthesameretailerthatprovidedthedataforthenowwidelyusedDominick’sscandatapanel. 7|P a g e primedtoactsensiblypurchasedmoreitemswhentheyreceivedcouponswithshorterexpirationdates andwhenthecouponsread“Save$x”. Therehavebeenseveralstudiesinvestigatingtheimpactofframingdiscountsas“freesamples”or“free gifts”.BawaandShoemaker(2004)usetwofieldexperimentstodisentanglethreeeffectsofoffering freesamples:demandacceleration(temporalsubstitution),cannibalization,anddemandexpansion. Theyshowthatunlikecoupons,freesamplescangeneratepositivelong-termeffectsthatcanendure forasmuchas12monthsaftertheevent.Inalongitudinalstudyinthefinancialservicessector,Haisley andLoewenstein(2011)investigatedhowofferingcustomersunexpectedgiftsaffectedtheir subsequentdepositbalances.Theyfoundthatanincreasingsequenceofgifts($35then$100)hada morepositiveimpactonsubsequentbalancesthanadecreasingsequence($100then$35).They describedthisasan“aversiontodeterioration”.ShuandGneezy(2010)studyhowexpirationdateson giftcertificatesaffectredemptionrates.Participantswhoreceivedgiftcertificateswithalonger expirationdatahadmorefavorableperceptionsofthefirm,butwereactuallylesslikelytoredeemthe certificates.Theyattributethisprofitablecoincidencetoprocrastination,andsupportthisclaimusinga follow-upsurvey.LaranandTsiros(2013)investigatehowuncertaintyaboutwhichfreegiftwillbe offeredinfluencetheeffectivenessofthesepromotions.Ifcustomerswereprimedtothinkabouttheir decisions,theyrespondedmorefavorablyiftheyknewwhatfreegifttheywouldreceive.Incontrast,if theywereprimedtomakemoreemotionaldecisionsthentheuncertaingiftwasmoreeffective. Wealsohighlightthreeparticularlyinnovativestudies.Hui,Inman,HuangandSuher(2013)investigate theimpactofsendingdiscountsthroughmobilephonetechnology.Theyshowthatsendingcouponsfor productsthatarelocatedfurtherawayfromthecustomers’plannedin-storeshoppingpathsare effectiveatincreasingunplannedpurchases.TsirosandHardesty(2010)studyhowtomosteffectively removediscounts.Theyshowthatphasingoutadiscountgraduallyismoreeffectiveatraisingunitsales thanremovingthediscountallatonce.Theyattributethisinparttohighercustomerexpectationsabout futurepricelevels.Gaurav,ColeandTobacman(2011)studytheadoptionofrainfallinsuranceinrural Indianvillages.Theinsuranceisarelativelysophisticatedfinancialproduct,andtheyfindthattraining customersabouttheproductsisgenerallymoreeffectivethanofferingotherformsofmarketing promotions.Theexceptionisa“MoneyBack”guaranteeifthefarmersneverhavecausetoclaimonthe insurance,whichworksalmostaseffectivelyasthetrainingprograms. PriceasaSignal Athirdgroupofpricingstudiesfocusesonthesignalingroleofprices.Usingdatafromanapparel catalog,AndersonandSimester(2001b)highlighttheimportanceofrationinghowoftensalesignsare used.Theymotivatethisstudyasatestofanearlierpaperthatarguesthatsalesignsserveacredible signalingrole,enablingpoorlyinformedcustomerstoevaluatewhichpricesarelowrelativelytoother pricesinthemarket(AndersonandSimester1998).Akeyfeatureofthatmodelisthatthesalesignsare self-regulating;anyonesignbecomeslesscrediblethemoreoftenitisused.Inarelatedstudy, AndersonandSimester(2003)measuretheimpactof9-digitpriceendings(e.g.$1.99or$49).Usinga seriesofthreefieldexperimentsconductedattwodifferentwomen’sapparelcatalogs,theyshowthat $9priceendingsincreasedemand,andthatthisdemandincreaseisstrongeronneweritemsthanfor establisheditems.However,theeffectappearstobeweakenedwhenthe$9dollarendingis 8|P a g e accompaniedbya“sale”sign.Theyinterpretthesefindingsasevidencethatthepriceendingsservea similarsignalingroleto“sale”signs,revealingtocustomerswhichitemsarediscountedcomparedto otherpricesinthemarket. Gneezy,GneezyandLauga(2014)investigatetheinformationthatpricessignalaboutquality.When customersseehighpricestheyanticipatehigherquality,andsoreactmoreadverselyifqualityislow.As aresult,customersevaluatealowqualityproductwithahighpricemorenegativelythanalowquality productwithalowprice.TheyestablishthisresultusingafieldexperimentatasmallCalifornia vineyard. Twootherpapersinthissignalingstreamhavealreadybeendiscussedascontributionstothe discountingliterature.RecallthatAndersonandSimester’s(2001a)evidencethatextendedpayment termsloweredsalesataprestigiousjewelrycatalogwasinterpretedasevidencethattargetingprice sensitivecustomerscanunderminethecredibilityofaretailer’squalityclaim.Similarly,theevidence thatdeeperdiscountstofirst-timecustomerscanmakethesecustomersmoreloyalalsohadasignaling interpretation(AndersonandSimester2004),althoughinthiscasethesignalwasaboutfutureprices ratherthanquality. Multi-PartTariffsandOtherPricingSchemes Thefourthstreamofpricing-relatedfieldexperimentsaddressesmulti-periodandmulti-parttariffs togetherwithotherinnovativepricingschemes.LambrechtandTucker(2012)reportoneofthefew fieldexperimentsconductedinabusiness-to-businesssetting.Theycollaboratewithawebhosting providerintheUnitedKingdomtoinvestigatetheimpactofvaryingboththemonthlypriceandthe framingof“hasslecosts”inthefirstperiodofamulti-periodcontract.Ratherthanevaluatingtheentire contractterm,theyshowthatcustomersinthismarketevaluatetheoutcomeineachdistinctperiod.As aresult,theyshowthatifcustomersincurhasslecostsinthefirstperiod,thenitismoreeffectiveto lowerthefirstperiodpriceanddefersomeofthisrevenueuntillaterperiods. AndersonandSimester(2008)showthatpricedifferentiationcanlowerdemandifitisperceivedtobe unfair.Theirfieldexperimentwasconductedinawomen’sapparelcatalogthatsellsplus-sizes.Because thecostofproducingverylargegarmentsishigherthanthecostofproducingsmallergarments,the retailersoughttochargehigherpricesonitslargestsizes.Theresultsrevealedanasymmetry;therewas nochangeindemandatthesmallersizes,butdemandfellsharplyforthelargersizes(evenafter controllingfortheabsolutepriceitself).Theyinterpretthesefindingsasevidencethatprice differentiationcanlowerdemandifitisperceivedtobeunfair.However,customersactuallyhaveto experiencetheunfairness;itisnotsufficienttoseeothercustomerstreatedunfairly. Twopapersfocusonmulti-parttariffschemes.Danaher(2002)usestheexogenousvariationintroduced throughafieldexperimentinthetelecommunicationsmarkettodevelopanoptimalpricingmodelfora 2-parttariff.Theschemeincludesbothamonthlyaccessfee,togetherwithaper-minuteusageratefor cellularphoneservice.Theresultshighlighttheimportanceofaccountingforbothusageandcustomer retention.Solelyfocusingonusageandignoringattritionwillsubstantiallyunder-estimatethesensitivity ofrevenuetoprice.Yao,Mela,ChiangandChen(2012)alsostudycellularphonepricing,althoughin theircasetheyuseafieldexperimenttorecoverestimatesofcustomerdiscountrates(ratherthan 9|P a g e revenuepricesensitivity).Customers’planchoicesrevealmuchfasterconsumerdiscountingoffuture periodsthanwenormallyassume. Perhapsthemostunusualpricingschemerepresentedintheliteratureisa“pay-what-you-want” (PWYW)scheme.Kim,NatterandSpannreportthreefieldexperimentsconductedinGerman restaurantsandamovietheatre.ThefirmsrotatedPWYWschemesandtheirstandardpricingschemes ondifferentdays.Ingeneral,customerschosetopaylowerpricesthanthepricesthefirmsregularly charged.However,thiswasnotalwaysthecase.Customersinoneoftheexperimentschosetopayan averageof$1.94forahotbeverage,comparedtotheregularpriceof$1.75.Inanotherexperiment, customersonaveragechosetopaylessforabuffetlunch($6.44)thantheregularprice($7.99),butthe PWYWschemeattractedenoughextrademandtogeneratesignificantlyhigherdailyrevenue. 3. AdvertisingTopics Thefifteenpapersthatfocusonadvertisingrelatedissuescanbegroupedintothreebroadsub-topics: 1. Doesadvertisingimpactpurchasing? 2. Whichadvertisingmessagesaremosteffective? 3. Optimizingpaidsearchadvertising IsthereanImpactonPurchasing? Fourpapersinvestigatewhetheradvertisingcanimpactpurchasing,includingtwopapersthatreacha relativelynegativeconclusion.LewisandReiley(2014)studywhetherdisplayadvertisementsatYahoo! causedofflinepurchasesatadepartmentstore.Despiteacontrolledrandomizedenvironmentanda samplesizeof1.6millioncustomers,theyareonlyjustabletoestablishastatisticallysignificanteffect. LambrechtandTucker(2013)studytheeffectsof“dynamicretargeting”ofadvertisements.Dynamic retargetingdescribesthewidelyusedpracticeofusingbrowsinghistoryfromotherwebsitestoselect whichadvertisingcontenttodisplay.Theyfindthatthispracticedoesnotincreaseadvertising effectiveness.Theexceptioniswhenthebrowsinghistoryindicatesthatacustomerisrelativelycloseto makingapurchase.Itisonlythenthatdynamicretargetingiseffective. Anotherpaperwithakeyfindingthatiseffectivelyanullresultfocusesontheimpactofdigitalvideo recorders(DVRs)onadvertisingeffectiveness.TheintroductionofDVRsledtoconcernthattelevision advertisingwouldbecomelesseffectivebecausecustomerscouldfilteroutadvertising.Inthisvery large-scalescalestudy,theauthorsfoundnoevidencethatthiswasthecase.Insteadtheauthors concludedthatfilteringoutadvertisementsoccursrelativelyinfrequently.Incontrasttothetwo previouspapers,thiscouldbeconsideredarelativelypositivepaperabouttheimpactofadvertising.It suggeststhatthewidespreadconsumeradoptionofDVRtechnologywillnotdiminishtheimpactofTV advertising. Thefourthpaperinthissequenceinvestigatestheimpactofcompetitiveadvertising.Competingcatalog retailerssharethenamesandaddressesoftheirbestcustomersonareciprocalbasisinordertolower thecostsofprospectingfornewcustomers.Usingarandomizedfieldexperiment,Andersonand Simester(2013)measurehowallowingcompetitorstotargetyourcustomerswithcompetingcatalogs 10|P a g e impactsafirm’sownsalestothosecustomers.Althoughwemightexpectanegativeeffectdueto substitution,theyactuallyfindthatformanycustomersthecompetitors’advertisingincreased purchasesfromtheoriginalfirm.Thispositiveeffectwasparticularlystronginproductcategoriesin whichcustomerslearnproductsizesthatarefirm-specific(suchasfootwear).Thisleadstheauthorsto attributetheirfindingstotheimportanceofproductstandards,customerlearningandswitchingcosts. WhichMessagesAreMostEffective? Anadditionalninepapersfocusonimprovingmessagingtoincreaseadvertisingresponserates.They includeseveralpapersthataddresstargetingorpersonalizationofadvertisingmessages.Forexample, Tucker(2014)reportsafieldexperimentconductedonFacebookthatstudieshowcustomersreactto advertisementsthatarepersonalizedbasedonacustomer’spostedpersonalinformation(seealso LambrechtandTucker2013,whichisdiscussedabove).Fortuitously,theexperimentcoincidedwitha widelypublicizedchangeinFacebook’sprivacypolicies,whichgaveusersmorecontrolovertheir personalizationsettings.Thefindingsrevealthatgivingcustomerstheoptionofcontrollingtheir personalizationsettingsgreatlyimprovedtheperformanceoftargetedadvertisements.Schumann,von WangenheimandGroene(2014)studyhowtomitigateadversecustomerreactionstotargetedInternet advertising.Theyshowthatreciprocityappeals(“Ourserviceisfreeofchargetoyou–targeted advertisinghelpsusfundit”)aremoreeffectivethanrelevanceclaims(“Youwillseemoreinteresting andlessirrelevantadvertisementsinthefuture”). Threestudiesinvestigatehowmessagingshouldbecustomizedtodifferentcustomersegmentsusing dimensionsotherthanpriorbrowsingbehavior.BergerandSchwarz(2011)studymessagesthatprompt customerstorecommendproductstoothercustomers(word-of-mouth).Theyshowthatmessagesthat linkabrandtoaproductcuearemoreeffectivewhencustomersdonotalreadyhavestrong associationsbetweenthebrandandthecue.UsingaGoogleAdWordsfieldexperimentconductedin Israel,Kronrod,GrinsteinandWathieu(2012)demonstratethattheuseofassertivemessages(“You mustsavetheMediterranean”)aremoreeffectivewhencustomersalreadybelieveinthecause,butare lesseffectiveformoregeneralcauses,forwhichcustomers’preferencesareweaker. BeyondKronrod,GrinsteinandWathieu(2012),twootherstudiesinvestigatehowtodesignmessaging thatencouragescustomerstoengageinmoreenvironmentallyfriendlybehavior.Inanambitiousstudy, WhiteandSimpson(2013)collaboratewithalargemetropolitancitytoencourageresidentstoleave theirgrassclippingsontheground,ratherthandisposeofthemthroughthemunicipalwastesystem (whichsendstheclippingstolandfills).Usinghangersplacedonthefrontdoorsofresident’shome,they testedsixdifferentmessagingconditions,togetherwithaControlcondition.Theythenmeasuredthe reductioninwaste.Varyingthetypeofappealafterprimingafocusoneitherindividualorsocial benefitshadasignificanteffectonresidents’behavior.Spangenberg,Sprott,GrohmanandSmith(2003) reporttwostudies.Inthefirststudytheyinvestigatehowmessagesinoutdooradvertisingmedia (billboards)canincreaserecycling.Inthesecondstudytheyvarythecontentofmessagesinsertedina healthclub’smonthlynewslettersandbillingstatement,withthegoalofincreasingmembervisitstothe club.Theyshowthatframinganappealasaself-predictionincreasesitseffectiveness.Specifically,inthe fitnessclubstudy,themessage“Fitnessguilt?”wasmoreeffectiveatincreasingmembervisitsthanthe alternativetreatment“Workoutat[fitnessclubname]”. 11|P a g e TwootherexamplesofmessagingtestswerereportedbyTuckerandZhang(2010and2011).Bothof thesestudiesinvestigatehowreportingparticipationinatwo-sidednetworkincreasesparticipationin thenetwork.Thefirstexample(TuckerandZhang2010)isanotherrareexampleofastudyina business-to-businessmarket.Thesettingwasawebsitethatresemblescraigslist.org,andtheoutcome measurewasthenumberofsellerswhochosetolistonthesite.Thefieldexperimentrandomized whethertodisplaythenumberofbuysand/orsellersand(ifso)thenumberofbuyersand/orsellersto claim.Theyfindthatalargenumberofsellerscandeteradditionallistings,unlessonlythenumberof sellersisrevealed(notthenumberofbuyers).Displayingmanybuyerswillattractmoresellersaslongas thenumberofsellersisalsorevealed.Theyconcludethatmarketswithmorecompetitorscanappear moreattractivetoentrants,astheremustbesufficientdemandtoattractsomanycompetitors(a positivenetworkexternality).Thesecondstudy,TuckerandZhang(2011),usesdatafromawebsitethat listsweddingservicevendors.Theyrandomizewhetherthewebsiterevealsthepreviousnumberof clicksonavendor.Wemightexpectthatrevealingthisinformationwouldincreasethepopularityofthe vendorswiththemostclicks.Instead,theyshowthatthesamelevelofhistoricalclicksresultsinalarger liftforbrandswithanichemarketposition,comparedtoabrandwithamainstreamposition. Customersappeartoinferthatthesebrandsmustprovidehighqualityinordertoovercometheir narrowreach. Thefinalpaperinvestigatingtheimpactofadvertisingmessagesincludesapairofstudiesconducted usingmatchedpairsofmusicCDauctionsoneBay.DholakiaandSimonson(2005)studytheimpactof messagingthatexplicitlyrecommendsthatpotentialbidders“comparethepriceofthisCDwiththe pricesofsimilarCDslistednexttothisone”.Theyfindthatthesemessagesleadtomorecautious biddingbehavior.Thewinningbidderstendedtosubmitlaterbids,submitfewerbids,andavoid participatinginsimultaneousauctions.Theyinterpretthefindingsasevidencethatmakingcompeting optionsmoresalientmakescustomersmoreriskaversebecauseopportunitycostsbecomemore prominent. OptimizingPaidSearchAdvertising Twopapersbydifferentteamsinvestigatehowtooptimizepaidsearchadvertising.YangandGhose (2010)beginbyusinganhistoricalpaneldatasettoinvestigatehowtheresponsetopaidsearch advertisingisaffectedbythepresenceoforganic(unpaid)searchresults.Theythentesttherobustness ofthemodelpredictionsusingan8-weekfieldexperimentonGoogle.Theyconfirmedthatwhenpaid searchispresent,sothatcustomerscanseebothpaidandorganicsearchresults,thecombinedclickthroughrate(CTR)was5.1%highercomparedtowhentherewasnopaidsearchpresent.The conversionrate(probabilityofapurchase)alsoincreasesby11.7%. Agarwal,HosanagarandSmith(2011)investigatetheimportanceofpositioninpaidsearchadvertising. Specifically,theyaskwhetherbeingthefirstsearchresult,secondresult,oralowerresult,impactsboth click-throughrates(CTR)andconversion(purchases).Aswemightexpect,theclosertothefirstposition, thehighertheCTR.However,theoppositeistrueforconversionrates.Appearinglowerintherankof searchresultscanactuallyincreaseconversionratesbecauseconversionisconditionalonclicking.Asa result,onlythemostmotivatedcustomersclickonlowerresults,andthesearethecustomersthatare 12|P a g e morelikelytoconvert.Givenadvertisersgenerallypayforclicksirrespectiveofconversions,itmaybe optimalformanyadvertiserstopreferlowerpositionsinthesearchorder. 4. Product-RelatedTopics Weidentifiedsevenpapersthatpresentfieldexperimentsaddressingproduct-relatedtopics.This includesfourstudiesfocusedonmarketresearchandproductdevelopmentissues,andthreepapers focusedonproductsizes. MarketResearchandProductDevelopment Twostudiesinvestigatetherolethatmeremeasurementcanhaveoncustomerpurchasingbehavior. Chandon,MorwitzandReinartz(2005)asked251customersofanonlinegrocerabouttheirpurchase intentions.Asecondrandomlyselectedsetof140consumersservedasthecontrol(andwerenotasked anyquestions).Thestudyrevealedthatthecustomerswhoweresurveyedweresignificantlymorelikely tomakeasubsequentpurchase,andweresignificantlymoreprofitablefortheretailer.Twoyearslater, adifferentresearchteamconductedarelatedstudyintheautomotiveservicesindustry(Borle, Dholakia,SinghandWestbrook2007).Atelephonesurveywasadministeredto3,773randomlyselected customers.Subsequentservicevisitsbythesecustomerswerethencomparedwitharandomlyselected controlsampleof1,227customers.Thiscomparisonrevealedthatparticipatinginthesurveyincreased purchasesandmadecustomersmoreresponsivetofirmpromotions. Theothertwostudiesonthistopicusefieldexperimentstovalidatenewmarketresearchmethods. Urban,Hauser,Qualls,Weinberg,BohlmannandChicos(1997)validateamethodforconducting researchveryearlyintheproductdevelopmentprocess.Forecastsofnewproductsalesaremore valuabletheearliertheyareavailable.Theauthorsinvestigatethepossibilityofusingmultimedia representationsofpotentialnewproductstoprovideearlierandlesscostlyforecasts.Theyconducttwo fieldexperiments,whichconfirmthatmultimediacomputerinteractionscanbothrealisticallyportray customers’informationsources,andyieldforecaststhatarenotsignificantlydifferentfromtraditional methods.Neslin,Novak,BakerandHoffman(2009)proposeamodelthatisdesignedtomaximize responseratestoonlinemarketresearchpanels.Themodelisdynamic,optimizingoveradiscrete numberofstudiesinafiniteperiod,wherethisfiniteperiodcanbeextendedusingarollinghorizon. Theycomparetheirmodelagainstthecurrentmanagerialheuristic,andreportsignificantlyhigher responserates. ProductSizesandBundling Consumers’assessmentsofrelativepackagevolumesareoftenbiasedwhenpackageshavedifferent shapes.Krider,RaghubirandKrishna(2001)investigatethisbiasbycomparinghowcustomersreactto productpackagesthathavethesamevolumebutdifferentshapes.Inauniversitycafeteriathatsells creamcheesetocomplementbagels,theauthorscomparedemandfora¾ozroundtubofcream cheeseanda¾ozsquaretubofthesamecreamcheese.Customersweresignificantlymorelikelyto purchase2tubsofcreamcheesefortheirbagelondaysthatonlytheroundtubsofcreamcheesewere available.Thisfindingisconsistentwithotherevidenceintheirpaperthatcustomersperceiveround containerstobesmallerthanrectangularcontainersofthesamevolume. 13|P a g e LeszczycandHaubl(2010)reportfindingsfromthreefieldteststhatinvestigatetheprofitabilityof productbundling.UsingaseriesofeBayauctionsofcollectablepostagestamps,theycomparethe profitabilityofbundlingrelatedandunrelateditems.Theirfindingsrevealthatbundlingsubstitutesor unrelateditemsinanauctionislessprofitablethansellingthemseparately,butbundlingismore profitablewhentheitemsarecomplementary.Athirdstudyrelatedtoproductbundlinghasalready beendiscussedasanexampleofapricing-relatedpaper.Recallthatinanexperimentconductedat86 supermarketstores,Wansink,KentandHoch(1998)comparedtheeffectivenessofmultipleunit promotions(e.g.2for$1.50)versussingleunitpromotions(75-centseach).Themultipleunit promotionsincreasedthenumberofunitsthatcustomerspurchasedbyanaverageof32%. 5. ModelValidation Themarketingfieldhasalongtraditionofdevelopingmodelsthatoptimizemarketingdecisions. Traditionallythesemodelsarevalidatedbymeasuringgoodnessoffit,eitherin-sampleorwithholdout samples.Alimitationofthisvalidationisthatitgenerallyreliesonassumptionsinherentinthemodels, andsoerrorsintheassumptionsarealsointroducedtothevalidationprocess. Becauseoftheselimitations,researchershavebegunusingfieldexperimentsasameansofvalidating marketingmodels.Fieldexperimentsprovideanalmostidealvalidationsetting;differentpolicescanbe implementedintreatmentandcontrolsettingsandtheiroutcomescompared.Thisprovidesa“modelfree”basisforvalidation,togetherwithacomprehensivetestofalloftheassumptionsinthemodel. Forexample,Simester,SunandTsitsiklis(2006)proposeamodelfordynamicallyoptimizingcatalog(and otherdirectmarketing)mailingdecisions.Catalogfirmsregularlysendcatalogstocustomers,andmust decidewhoshouldreceiveeachcatalog.Traditionallythesedecisionshavebeenmademyopically;the companiessendcatalogstocustomerswhoaremostlikelytorespondtothatcatalog.Themodel proposedinthispaperoptimizesasequenceofmailingdecisionsoveraninfinitehorizon.Themodel beginsbyproposingamethodfordividingcustomersintodiscreteMarkovstatesusingasetofvariables describingeachcustomer’spurchasingandmailinghistories.Transitionprobabilitiesandrewardsare thenestimatedforeachstrategy(mailornotmail)ineachstatespace.Finally,astandardpolicyiterationalgorithmisusedtocalculatetheoptimalpolicyineachstate.Theauthorsthentesttheir proposedmethodbyvaryingcatalogmailingdecisionsfor60,000customersofanapparelcatalogovera periodofsixmonthsincluding12catalogmailingdates.Thefindingsrevealedthatthemodelperformed wellforlow-valuedandmoderately-valuedcustomers.However,duringtheinitialmonthsofthe experiment,theresultswerelessfavorableforthemostvaluablecustomersinthesample.Further investigationrevealedanexplanationforthepoorinitialoutcomeforthesecustomers:inthetraining datathereweretoofewoccasionsinwhichthefirmhadnotmailedtothesecustomerstoprovidea reliableestimateoftheoutcome. 14|P a g e Thesecomparisonsnotonlyvalidatetheproposedmodels,buthavealsoprovedvaluableasasourceof insightsabouttheunderlyingphenomenon.9 InadditiontoSimester,SunandTsitsiklis(2006),weidentifiedsevenotherpaperspublishedinthelast twentyyearsthatemployfieldexperimentstovalidateoptimizationmodels.Theseincludetwopricing models,threeadvertisingmodelsandtwonewmarketresearchmethods.Allbutoneofthesepapers waspublishedin2006orlater,suggestinggrowinginterestinthisapproach.Althoughsomeofthe papersinvolverelativelysmallnumbersofparticipants(seeforexampleUrbanetal.1997;andBelloni, Lovett,BouldingandStaelin2012),othersincludelargenumbersofparticipantsandextended treatmentperiods.Forexample,Mantrala,Seetharaman,Kaul,GopalakrishnaandStam(2006)compare theoutcomewhenimplementinganoptimalpricingmodelin200experimentalstoresoveraperiodof8 weeks. 6. OtherTopics Oursearchrevealedanadditional10studiesthatdonotfiteasilywithinthepreviousfourtopics. Notably,thesepapersareallrelativelyrecent,withthefirstpublishedin2008,andeightofthem publishedinthelastfiveyears.Wehavegroupedthesepapersintofivetopics: 1. 2. 3. 4. 5. Salesforceoptimization Word-of-mouthandreferrals Participationinonlinecommunities Encouragingpositivebehaviors Othertopics SalesForceOptimization Kumar,VenkatesanandReinartz(2008)reportfindingsfromtwolarge-scalefieldexperiments.One experimentwasconductedwithamultinationalbusiness-to-businesstechnologyfirm,whilethesecond studywasconductedwithafirminthetelecommunicationsindustrythatsellstobothbusinessesand retailconsumers.Thestudiescompareda“customer-focus”inwhichthetimingofsalescallswas coordinatedwithforecastsofcustomers’purchasingdecisions.Inthiscondition,salescallswerealso coordinatedacrossproductcategories,sothatifacustomerwasexpectedtopurchaseinmultiple categoriesassignedtodifferentsalesteams,thecustomerreceivedajointvisitfrombothteams.This coordinatedpolicywascomparedwithastandardpolicy,whichlackedcoordination.Thetwo treatmentswererandomlyassignedwithinmatchedpairsofcustomers.Thefindingsrevealedthat coordinationledtosignificantlyhigherprofitsandreturn-on-investment.Lim,AhearneandHam(2009) alsoinvestigatesalesforceoptimizationissuesusingrandomizedfieldexperiments,althoughtheyfocus onsalesforceincentives.Specifically,theycomparetheimpactofdifferentprizestructuresinsales contests.Theirfindingsindicatethatasalescontestshouldincludemultipleprizewinners,andrank orderingprizesincontestswithmultiplewinnersdoesnotincreasesalesorrevenues. 9 ThefindingsintheSimester,SunandTsitsiklis(2006)fieldexperimentledtoasubsequentpaper(Mannoretal. 2007)inwhichtheauthorsdocumentedthepotentialforpositivebiaswhenapplyingdynamicprogramming modelstofielddata. 15|P a g e Word-of-MouthandReferrals Inawidely-citedpaper,GodesandMayzlin(2009)investigatewhetherfirmactionsdesignedto encourageword-of-mouth(WOM)leadtohighersales.TheyfindthatWOMismoreeffectiveat increasingsalesifitcomesfromrelativelylessloyalcustomers.TheyalsoreportthatWOMgenerates moresalesifitcomesfromacquaintances,ratherthanclosefriends.Kumar,PetersonandLeone(2010) usefourfieldexperimentsconductedwithafinancialservicesfirmtoidentifywhichcustomersafirm shouldtargetwhendesigningcustomerreferralprograms.Theyusethefindingstovalidateanapproach forcomputingthe“customerreferralvalue”foreachcustomer. ParticipationinanOnlineCommunity InastudyconductedinGermanyinvolvingeBayusers,Algesheimer,Borle,DholakiaandSingh(2010) measuretheimpactofaprogramdesignedtoincreaseparticipationinthefirm’sonlinecommunity. Customersintherandomlyassignedtreatmentgroupreceivedmultipleemailmessagesinviting participation,whilethoseinthecontrolgroupdidnotreceivethesemessages.Overthenextyear customersinthetreatmentgroupspentlessandlistedfeweritemsthancustomersinthecontrolgroup. Twoyearslateranoverlappingresearchteamconductedafollow-upstudyagainusingGermaneBay users(Zhu,Dholakia,ChenandAlgesheimer2012).Emailmessagestoarandomlyselectedtreatment groupwereagainusedtoinviteparticipationinthefirm’sonlinecommunity.Thefindingsrevealthat participantsengageinmorerisk-seekingbiddingbehavior.Thiseffectisonlytruewhencommunity membershavestrongtiestoothermembersofthecommunity.Thefindingsarereplicatedinasecond fieldexperimentconductedwithprosper.com. ToubiaandStephen(2013)studywhypeoplecontributetothemicrobloggingsiteTwitter(seealsoour earlierdiscussionofBergerandSchwarz2011,whoaskwhycustomerscontributeword-of-mouth).They experimentallymanipulatedthenumberofTwitterfollowers,andcomparedtheirpostingactivitiestoa randomlyassignedcontrolledgroup.Theirfindingssuggestthatmanyuserscontributebecausethey careabouthowpeopleperceivethem,ratherthanbecausetheyderiveintrinsicutilityfromtheactivity. EncouragingPositiveBehaviors Weearlierdescribedtwopapersthatstudyhowadvertisingmessagescanleadtopro-socialbehavior (WhiteandSimpson2013studywastereduction,andSpangenberg,Sprott,GrohmanandSmith2003 studyrecyclingbehavior).Twootherpapershavefocusedonencouragingpositivebehaviors.Raju, RajagopalandGilbride(2010)examinehowtoencouragechildrentochoosehealthierfoodoptions.The mosteffectiveinterventionwastoestablisha“friendlyhealthfuleatingcompetitionwithstudentsatthe samegradelevelfromotherparticipatingschools.”Askingthechildrentosignapledgetoeatmore fruitsandvegetables,andprovidingdirectincentivesforhealthychoices(e.g.pencils,stickers,key chains)alsoledtoimprovedeatinghabits,evenupto10weeksaftertheinterventionsended. SomanandCheema(2011)comparemethodsforimprovingsavingsratesamonglow-incomelaborersin ruralIndia.Financialplannersvisitedthe146familiesinthestudyfor15weeks,andgavethemasavings goal,whichwasplacedinasealedenvelope.Experimentalvariationsincludedthesizeofthisgoal, whethertheirpicturesoftheirchildrenwereprintedontheenvelope,andwhetherthesavingsgoalwas 16|P a g e pooledintoasingleenvelopeorsplitbetweentwoenvelopes.Althoughthesizeofthegoaldidnot affectthesavingsrate,savingsweresignificantlyhigherinthephotographcondition,andwhenthe savingswerepartitionedintomultipleenvelopes. OtherTopics Theremainingtwopapersstudydiversetopics.DaggerandDanaher(2014)reportfindingsfromfield experimentsdesignedtomeasurehowremodelingastoreimpactsstoredemand.Thefirstofthese studieswasconductedatan“equipmentretailerandserviceprovider”thatretaineditsoriginalretail space,whileremodelingnewspaceinthebuildingtoserveasareplacementretailspace.The researchersrandomlyrotatedtheretailoperationsbetweenthenewandoldspacesforaperiodofsix weeks.Theyfoundthattheremodeledspaceincreasedsalessignificantlymorefornewcustomersthan forexistingcustomers.Theyreplicatetheirfindingsinasecondstudyconductedinalargedepartment store. HaruvyandLeszczyc(2010)conductedaseriesofexperimentsusingpairsofsimultaneousauctionsto measuretheimpactofarangeofauctionfeatures,including:auctiondurations,shippingcosts,thelevel ofopenreserveprices,andtheuseofsecretreserveprices.Theresultsrevealconsiderableprice dispersionwithintheauction-pairs.Theyalsoconfirmthattheauctionfeatureshadsignificanteffectson finalprices,whichtheauthorsattributetotheroleofsearchcosts. 7. DesigningExperimentsandFutureTopics Weconcludebyreflectingonwhatisrequiredtopublishfieldexperimentsinthemarketingliterature. Wealsodiscusstherangeoftopicsthathavebeenstudied,andidentifytopicsthatremainrelatively under-studied. DesigningExperimentsfortheMarketingLiterature Fieldexperimentspublishedinmarketingobviouslysharemanyofthesamecharacteristicsasfield experimentspublishedineconomicsjournals.However,therearesomedistinguishingfeatures. Publishinganyempiricalstudyinthemarketingliteraturerequiresmorethanmerelydocumentingan effect.Researchersareexpectedtoalsoshedlightonthemechanismthatcausestheeffect.For example,itisnotsufficienttojustshowthatmultipleunitpromotions(e.g.2for$1.50)aremore effectivethansingleunitpromotions(75-centseach).Wansink,KentandHoch(1998)werealso expectedtoexplainthisresultasanexampleofamoregeneralphenomenon.Theyinterpretedtheir findingasanexampleof“anchoringandadjustment”. Thisrequirementcanbeaformidableobstacleforfieldexperiments,asitisoftennotpossibleto interviewcustomers,ortootherwisecollectintermediateprocessmeasuresthatcanrevealunderlying causes.Instead,therearefourapproachesthatresearchershavegenerallyusedtoinvestigatethecause oftheireffects,andtheyoftenusetheseapproachesincombination. First,manypapersreportinteractionsratherthanjustmaineffects.Forexample,TuckerandZhang (2011)donotjustreportthemaineffectofrevealingpopularityinformationonawebsite.Instead,they comparetheseeffectsfornicheversusmainstreambrands.Similarly,BergerandSchwarz(2011) 17|P a g e comparetheeffectofadvertisingmessageonword-of-mouthforcustomerswhohavestrongandweak associationsbetweenthebrandandthemessage.Forresearchersseekingtopublishfieldexperiments inmarketing,itisimportanttogivecarefulthoughttowhatinteractionstheycanmeasure,andhow thoseinteractionswillhelpclarifythecauseoftheireffects.Insightfulinteractionsareoftenviewedas the“clever”elementofastudy.Ideallytheinteractionsareconsistentwithaproposedargument,and aredifficulttoreconcilewithalternativeexplanations.Indeed,thisisthebenefitofreporting interactions;theyaremorelikelytobeimmunefromalternativeexplanations. Toestimateinteractions,researcherssometimesusemultiplefieldexperiments(recallthat30%ofthe papersreportresultsfrommultiplefieldexperiments).Althoughtheadditionalstudiesareoccasionally positionedasreplications(e.g.Danaher2002),theyarealsooftenusedtoinvestigateinteractions(e.g. AndersonandSimester2003).Otherstudiesreportasingleexperiment,butincludealargenumberof experimentaltreatments.Forexample,inGaurav,ColeandTobacman’s(2011)studyofdemandfor rainfallinsuranceamongruralIndianfarmers,theyinclude14differentexperimentalconditions.In general,studieseitherreportmultipleexperimentsormultipletreatments(andnotboth).10 Whereapaperreportsasinglefieldexperimentwithjusttwoconditions,itiscommontocomplement thefieldexperimentwithoneormorelaboratoryexperiments.Examplesinclude,Kronrod,Grinstein andWathieu(2012),whoaddtwolaboratoryexperiments,andKrider,RaghubirandKrishna,who reportfivelaboratoryexperiments.Inpapersthatincludemultiplelaboratoryexperiments,thefield experimentoftenservesalessprominentrole.Inparticular,thelaboratoryexperimentsmayestablish themaineffect,replicatetheeffect,andinvestigateinteractions,whereasthefieldexperimentis relegatedtoconfirminggeneralizabilityinafieldsetting. Athirdapproachusedtoinvestigateexplanationsistocombinethefieldexperimentwithacustomer survey.Forexample,recallthatAndersonandSimester(2001a)measuredhowcustomersreacttoan installmentbillingofferinapremiumjewelrycatalog.Customersdidnotpurchaseasmuchinthe installmentbillingcondition,whichtheyinterpretedasanadversequalitysignal,revealingthatthe productsaretargetedatcustomerswhoaremoresensitivetoqualitythanprice.Tosupportthis interpretation,theymailedcatalogssimilartothoseusedfortheexperimentaltreatmentstoother randomlyselectedcustomersamples,togetherwithashortsurvey.Customerswhoreceivedthe installmentbillingversionweremorelikelytoexpressconcernaboutproductquality.Onerespondent wroteonthesurveyinstrument:“Itmakes[catalogname]looktackytohaveinstallmentplans–kindof likeFranklinMintdolls”(atpage326).ShuandGneezy(2010)provideasimilarexampleofusinga surveytovalidateanexplanationfortheirexperimentalfindings. Thefourthapproachistousefieldexperimentdatatoestimateastructuralmodel.Forexample,ina recentworkingpaperDubé,LuoandFang(2016)reportfindingsfromtwofieldexperimentsinwhich theysentSMS(text)messagestoChinesemobilephoneusersofferingpromotionsonmovietickets. Theyrandomlyvaried(a)thesizeofthediscount,(b)whetherthetextindicatedtheserviceprovider woulddonatetoalocalcharityforeveryticketpurchased,and(c)thesizeofthedonation(ifany). Surprisingly,theyshowthatcustomersarelessresponsivetolargerdonationswhenthediscountsare 10 Thepair-wisecorrelationbetweenthenumberofexperimentsandthe(maximum)numberofconditionsis −0.14. 18|P a g e large.Theyestimateastructuralmodeltoprovideevidencethatthiseffectresultsfrom“self-signaling”; largerpricediscountspromptconsumerstoinferthattheirpurchasesarenolongeraltruistic.The authorsobservethatwithoutthestructuralmodelthereisnoobviouswaytotestthismechanismand disentangleitfromalternativeexplanations.Thisapproachofusingastructuralmodeltoexplainthe findingsinafieldexperimentisstillrelativelynovelinthemarketingliterature.Thestructuralmodeling andfieldexperimentliteratureshavegrownatsimilartimes,perhapspartlybecausetheyoffer alternativesolutionstoresolvingendogeneityconcerns(seeearlierdiscussion).Thispaperrecognizes thatthetwoapproachesarenotjustalternatives;theycanalsocomplementeachother.Giventherapid growthininterestinbothmethods,oncethebenefitsofcombiningthemethodsaremorewidely recognizedweshouldanticipatemanymorepapersusingthiscombinationofmethods. Randomization Randomizationofferswell-documentedstatisticaladvantageswhencomparingtreatmentandcontrol conditions.However,randomizationisnotrequiredtopublishfieldexperimentsinthemarketing literature.In29%ofthepapers,experimentaltreatmentswerenotassignedbyrandomization(inthree papersitwasunclearwhetherthestudiesusedrandomization).Insomecasesrandomizationcouldhave ledtocontagionbetweentheexperimentaltreatments.Forexample,inSomanandCheema’s(2011) studyofhowtoincreasesavingslevelsamongruralIndianlaborers,participantswereassignedto conditions“accordingtogeographicandsocialclusterstominimizethepossibilityofhouseholdsfrom differenttreatmentconditionsmeetinganddiscussingtheirparticipation”(atpageS17).Inothercasesit isnotobvioushowrandomizationcouldbeachieved.Forexample,inthestudiesinvolvingmatched pairsofauctionsoneBay(DholakiaandSimonson2005,LeszczycandHaubl2010,andHaruvyand Leszczyc2011),thematchedpairsserveastreatmentandcontrolsamples.Randomizingthe experimentaltreatmentsbetweenproductswithinapairwouldnotbemeaningful,eitherbecausethe productsareidentical,orbecausetheexperimentalvariationinvolvesdifferencesintheproduct bundlesthemselves. Intheabsenceofrandomization,acommonapproachistorotatetreatmentsacrosstime.Forexample, inDaggerandDanaher’s(2014)studyofastoreremodeling,“theoriginalretailenvironmentservedas thecontrol,usedinweeks1,4and5.Thenewenvironment,whichrepresentedthetreatment condition,wasinplaceforweeks2,3and6”(page66).11OtherexamplesincludeYangandGhose (2010),wherethetreatmentwasimplementedbyrotatingsponsorshipofkeywordsintwoweek intervals,andKrider,RaghubirandKrishna(2001),whorotateacrossdaystheshapeofcreamcheese packagesinastore. FutureTopics Thissurveyoftherecentmarketingliteraturerevealsaremarkablediversityinfieldexperimenttopics. Thismirrorsthediversityoftopicsinthefieldgenerally.Firmshaveawiderangeofleversthattheycan usetoinfluencedemand,andthemarketingliteratureconsequentlyhasawiderangeoftopicsto 11 DaggerandDanaher(2014)didrandomlyassignthetreatmentstothesixweeks,althoughitiscommonfor rotationtooccurwithoutrandomization. 19|P a g e choosefrom.Notably,theInternethasincreasedtherangeofleversavailabletofirms,andthishas furtherbroadenedthetopicsthatarestudied. Whilethediversityofavailabletopicsmakesthefieldattractivetoresearchers,itisalsoaweakness. Almostwithoutexceptionthepaperswehavediscussedraisenewresearchquestions,ratherthan buildingonpreviousresearch.Otherfieldsbenefitfromgreaterfocusintheirresearchtopics;suchas thestudyofpricerigidityinthemonetaryeconomicsliterature.Thisisnotthecaseinmarketing,which lacksbroadagreementabouttheresearchquestionsthatshouldbeprioritized.Asaresult,therehasnot beenatraditionofextendingpreviousfindingsandcomprehensivelyansweringwell-definedproblems. Althoughtherearesomeexceptionstothisobservation,manyoftheexceptionsreflectadedicationtoa researchquestionbyasingleresearchteam(orbyteamswithoverlappingresearchers). Despitethediversityoftopics,therearetopicsthatareclearlyunder-represented.Noneofthepapers investigateissuesrelatedtomanagingupstreamordownstreamchannelpartnerships.Forexample, noneofthepapersinvestigatethebenefitsofexclusivityinsupplyordistributionrelationships,orthe roleofstandardizationtofacilitatecoordination.Theabsenceofstudiesonthesetopicsmayinpart reflectthedifficultyofimplementingexperimentalvariation.Variationinchannelrelationshipsalmost alwaysrequiresconflict,whichdisruptsrelationshipsthatfirmshaveoftenspentconsiderabletime building. Thereisalsorelativelylittleresearchstudyingbusiness-to-businessmarkets.Onlyfiveofthepapers reportfieldexperimentsinwhichfirmstargetotherbusinesses(thisincludesonestudytargetingrural farmersinIndia).Thispaucityofstudiesmayreflectdifficultiesingeneratingsufficientsampleinthese markets.Experimentationmayalsobehinderedbygreatertransparency,whichcouldleadtobusiness customersinthedifferentexperimentalconditionsbecomingawareoftheexperimentalvariation (althoughthislimitationwouldalsoseemrelevantinseveraloftheInternetstudies).Athirdpossibilityis thatthetimerequiredtoimplementchangeandobserveoutcomescouldbelongerinbusiness-tobusinesssettingsthaninconsumermarkets. Whatisperhapsmostsurprisingisthelackofpapersinvestigatingthefeasibilityofusingfield experimentstooptimizemarketingdecisions.Aswehavealreadyrecognized,themarketingfieldhasa longhistoryofdevelopingmodelstooptimizemarketingdecisions.Indeed,eightofthepapersthatwe reviewedreportonfieldexperimentsdesignedtovalidateexampleofoptimizationmodels.However, fieldexperimentsarethemselvesanoptimizationmethod.Byexperimentallychangingmarketing variablesandcomparingtheoutcomes,firmscouldinprincipleusefieldexperimentstoimproveprofits bysearchingacrossthespaceofpossibledecisions. Noneoftheempiricalpaperswesurveyedinvestigatethefeasibilityofthisapproach.Perhapsthe closestexampleisDanaher(2002),whichusesthedatafromafieldexperimentimplementedbya telecommunicationscompanytodevelopastatisticalmodelthatoptimizesatwo-parttariff(pricing) scheme.However,inthisexamplethefieldexperimentisusedasasourceofdata,whilethe optimizationispursuedusingmoretraditionalmethods. Althoughwecouldfindnoempiricalpapersthatstudywhetherfirmscouldusefieldexperimentsasa practicaloptimizationmethod,thereisarecenttheoreticalpaper.Li,Rusmevichientong,Simester, 20|P a g e TsitsiklisandZoumpoulis(2015)investigatehowmanyexperimentsareneededtosetpricesina productcategory,asthesizeofthecategorygrows.Settingpricesacrossaproductcategoryrequires estimatingalargematrixofcross-productdemandelasticities(becauseitemsinthesamecategorymay besubstitutesorcomplements).Theyshowthatifthecategoryhasafavorablestructure,thenumberof experimentsneededmaygrowjustlogarithmicallywiththenumberofproducts.Theyconcludethat firmsmaybeabletoobtainmeaningfulestimatesusingapracticallyfeasiblenumberofexperiments, evenincategorieswithalargenumberofproducts.Toourknowledge,thisistheonlypaperthat formallyinvestigateswhenitisfeasibletooptimizemarketingvariablesusingfieldexperimentsalone. However,thispaperpresentstheoreticalresultsusinginformationtheory;itdoesnotreporttheresults ofanyfieldexperiments. 8. Conclusions Fieldexperimentsarenolongerararityinthemarketingliterature.Thesharpgrowthinthenumberof papers,particularlyinthelastfiveyears,meansthattheyarenowamainstreammethodfor undertakingempiricalresearch.Thegrowthinthenumberofpapersismatchedbytremendousgrowth inthenumberofauthorswhoareparticipatinginthesestudies.Between1995and1999just11authors authoredorco-authoredapaperusingafieldexperiment(inoursample).Between2010and2014 therewere75authorsrepresented.12 Thereappeartobeatleastthreereasonsforthisgrowthinthenumberoffieldexperimentpapers.First, themarketingfieldhasbecomeincreasinglyconcernedabouttheinterpretationofendogenous independentvariables.Thisconcerndoesnotariseifexperimentaltreatmentsareexogenously manipulated.Second,thefieldhasgrowngenerally,andsotherearemorepapersofalltypesbeing published.Third,theInternethasmadeiteasiertoimplementfieldexperiments,oftenwithoutthe needforcooperationfromfirms. Oursurveyrevealsthatbefore2010,fieldexperimentpapersinmarketingweredominatedbypricing topics.Since2010,atleastsomeofthisfocushasshiftedfrompricingtoadvertising,withmanyofthe recentpapersinvestigatingtopicsrelatedtoInternetadvertising.However,evenwithinthepricingand advertisingtopics,thereisaremarkablelevelofdiversityintheresearchquestions.Veryfewofthe papersbuildonapreviousfieldexperimentpaper.Werecognizethisasbothastrengthandweakness ofthefield. Animportantcriterionforpublishingafieldexperimentinatopmarketingjournalistheabilityto extendthefindingsbeyonddocumentingamaineffect,toalsoprovideinsightsaboutthecauseofthat effect.Althoughexplainingeffectsisobviouslyvaluedineconomicsjournals,thisobjectivereceiveseven greateremphasisinthemarketingfield.Fieldexperimentsarenotalwayswell-suitedtoevaluating competingexplanations.Forthisreason,manyofthepapersreportinteractions,ratherthanjustmain effects.Otherresearcherscomplementtheirfieldexperimentswithlaboratoryexperimentsorcustomer surveys,inordertoprovidesupportfortheirinterpretations. 12 Acrossall20yearsthereare123uniqueauthorsorco-authorsofpapersinthesample. 21|P a g e Althoughanexplanationforaneffectisgenerallynecessary,randomizationisnot.Almost30%ofthe fieldexperimentspublishedinmarketingdonotemployrandomizationtoassignexperimental treatments.Whentreatmentsarenotrandomized,theyaregenerallyrotatedovertime.Wealso identifiedthreepapersthatreportfieldexperimentsusingmatchedsetsofproductsauctionedoneBay. Althoughwehavehighlightedthediversityintopics,ourreviewalsoidentifiedseveraltopicsthatare yettoreceiveattention.Theseincludetheproblemsofmotivatingandcoordinatingupstreamand downstreamchannelrelationships.Therearealsoveryfewstudiesofbusiness-to-businessmarkets. Finally,werecognizedthatfieldexperimentsarethemselvesanoptimizationmethod;firmscoulduse fieldexperimentstoimproveprofitsbysearchingacrossthespaceofpossibledecisions.Althoughthere issomeinitialtheoreticalworkinthisarea,thefeasibilityofusingfieldexperimentsinthisroleremains animportantbutunder-studiedtopic. 22|P a g e 9. References Agarwal,Ashish,KartikHosanagar,andMichaelD.Smith(2011),“Location,Location,Location:An AnalysisofProfitabilityofpositioninonlineAdvertisingMarkets,”JournalofMarketingResearch,Vol. XLVIII,December,1057-1073. Ailawadi,KusmL.,BariA.Harlam,JacquesCésar,andDavidTrounce(2007),“QuantifyingandImproving PromotionEffectivenessatCVS,”MarketingScience,26(4),566-575. 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Yao,Song,CarlF.Mela,JeongwenChiang,andYuxinChen(2012),“DeterminingConsumers’Discount RateswithFieldStudies,”JournalofMarketingResearch,Vol.XLIX,December,822-841. Zhu,Rui(Juliet),UtpalM.Dholakia,Xinlei(Jack)Chen,andRenéAlgesheimer(2012),“DoesOnline CommunityParticipationFosterRiskyFinancialBehavior?”JournalofMarketingResearch,Vol.XLIX, June,394-407. 26|P a g e Appendix:SummaryofthePapers PricingIssues Whototargetwithdiscounts? Avoidsendingdiscountstocustomerswhopreviouslypaidfullprice. Dholakia(2006) Avoidofferingdiscountstocustomerswhoaremoresensitivetoqualitythanprice. AndersonandSimester(2001a) Deepdiscountshaveamorefavorablelong-termimpactfornewcustomersthanfor existingcustomers. AndersonandSimester(2004) Whattypesofdiscountsaremosteffective? Morethan50%ofthepromotionsareunprofitablebecausethelossofmarginisnotfully offsetbytheincrementalsales. Ailawada,Harlam,Césarand Trounce(2007) Couponsaremoreeffectiveforincreasingsalesandprofitsthandiscountsofftheregular price. DharandHoch (1996) Multipleunitpromotions(e.g.2for$1.50)aremoreeffectivethansingleunitpromotions (75-centseach).Largerquantitylimitsincreasethenumberofunitsthatcustomersbuy. Wansink,KentandHoch(1998) Framingadiscountas“50%morefree”ismoreeffectivethan“33%offtheregularprice”. Chen,Marmorstein,Tsirosand Rao(2012) Theoptimaldesignofacoupondependsuponthecustomer’spsychologicalorientation. RamanathanandDhar(2010) Freesamplescanleadtopositivelong-termdemandeffects. BawaandShoemaker(2004) Asequenceofincreasingcustomerbonusesismoreeffectiveatdrivingusageand retentionthanasequenceofdecreasingbonuses. HaisleyandLoewenstein(2011) Longerdeadlinesongiftcardsleadtolowerredemptionrates. ShuandGneezy(2010) Uncertaintyaboutafreegiftcaninfluencetheeffectivenessofpromotion,depending uponwhethercustomersareprimedtomakeemotionalorthoughtfuldecisions. LaranandTsiros(2013) Returningpromotedpricestoregularlevelsgraduallywillgeneratemoredemand. TsirosandHardesty(2010) Promotionsthatextendstoretripscanleadtoanincreaseinunplannedexpenditure. Hui,Inman,HuangandSuher (2013) Trainingcustomerstoappreciatethebenefitsoftheproductcanbemoreeffectivethan promotions. Gaurav,ColeandTobacman (2011) PriceasaSignal 9-digitpriceendingscansignalapriceisdiscounted,particularlyfornewproducts. AndersonandSimester(2003) “Sale”signsarealesscrediblesignalwhentheyareusedtoooften. AndersonandSimester(2001b) Higherpricessethigherexpectations,andsocustomersevaluatealowqualityproduct morenegativelywhenithasahigherprice. Gneezy,GneezyandLauga (2014) Promotionscanlowerdemandbysignalingthataproductissuitableforcustomerswho aremoresensitivetoqualitythanprice. AndersonandSimester(2001a) 27|P a g e Usingdiscountstoattractfirst-timecustomerscanmakethesecustomersmoreloyalby signalingthatthefirmoffersgoodvalue. AndersonandSimester(2004) Multi-PartTariffsandOtherSchemes Customersevaluateoutcomeswithinaperiod,ratherthanacrosstheentirecontract. LambrechtandTucker(2012) Amulti-partpricingsystemcanlowerdemandifcustomersinterpretitasunfair. AndersonandSimester(2008) Whendesigningarevenuemaximizing2-parttariffinthetelecommunicationsmarketitis Danaher(2002) importanttoaccountforbothusageandcustomerretention,assolelyfocusingonusage willsubstantiallyunder-estimatethesensitivityofrevenuetoprice. Consumersaresurprisinglyshort-termfocusedwhenchoosingbetweenlinearprice schemesand3-parttariffs. Yao,Mela,ChiangandChen (2012) Howdocustomersrespondtoapay-what-you-wantpricingscheme? Kim,NatterandSpann (2009) AdvertisingIssues Isthereanimpactonpurchasing? IttakesalotofdatatomeasuretheimpactofInternetadvertisingonconsumerspending. LewisandRiley(2014) Retargetingisgenerallyineffective,unlessconsumersareclosetopurchasing. LambrechtandTucker(2013) DVR'sdonotappeartoaffecthouseholdspending. Bronnenberg,DubeandMela (2010) Competitors’advertisingcanincreaseyourdemand. AndersonandSimester(2013) Whichmessagesaremosteffective? Framinganappealasaself-predictionincreasesitseffectiveness. Spangenberg,Sprott,Grohman andSmith(2003) Matchingthetypeofappealwithafocusoneitherindividualversussocialbenefitscan improveadvertisingeffectiveness. WhiteandSimpson(2013) Highlightingthebenefitsoftargetingislesseffectivethanemphasizingreciprocityforfree Schumann,vonWangenheim access. andGroene(2014) Controloverpersonalizationcanmakepersonalizedadvertisementsmoreeffective. Tucker(2014) Marketswithmorecompetitorscanappearmoreattractivetoentrants,astheremustbe sufficientdemandtoattractsomanycompetitors. TuckerandZhang(2010) Advertisingpopularityinformationcanbenefitnichebrands,becausecustomers recognizethatthesebrandsmustofferhighqualitytoovercometheirnarrowreach. TuckerandZhang(2011) Appealstoexplicitlycompareanofferwithcompetingoffersproducesmorecautious biddingbehaviorinauctions. DholakiaandSimonson(2005) Theeffectofadvertisingonword-of-mouthisstrongerforthosewhodonotalready associatethebrandwiththemessage. BergerandSchwartz(2011) Assertivemessagingismoreeffectiveifcustomersbelieveinthecause,butlesseffective Kronrod,GrinsteinandWathieu 28|P a g e iftheyarenotyetconvinced. (2012) Optimizingpaidsearchadvertising Clicksandrevenuesfororganicsearcharehigherinthepresenceofpaidsearch. YangandGhose(2010) Clicksdecreasewithsearchpositionbutconversionmayincreaseswithsearchposition. Agarwal,HosanagarandSmith (2011) MarketResearchandProductDevelopmentIssues MarketResearch Meremeasurementofpurchaseintentionsmayincreasethecorrelationbetweenstated purchaseintentionsandactualpurchaseprobabilities. Chandon,MorwitzandReinartz (2005) Participationincustomersatisfactionsurveysincreasessubsequentpurchaselikelihoods. Borle,Dholakia,Singhand Westbrook(2007) Multimediacomputerinteractionscanrealisticallyportraycustomer’sinformation sources,andprovideforecaststhatarenotsignificantlydifferentfromtraditional methods. Urban,Hauser,Qualls, Weinberg,BohlmannandChicos (1997) Anoptimalcontactmodelforincreasingresponseratestoonlinemarketingresearch panels. Neslin,Novak,Bakerand Hoffman(2009) ProductSizesandBundling Ifacustomerneedsafixedquantity,theywillpurchasemoreunitswhentheproductisin aroundpackagecomparedtoasquarepackageofequalvolume. Krider,RaghubirandKrishna (2001) Bundlingsubstitutesorunrelateditemsinanauctionislessprofitablethansellingthem separately,butbundlingismoreprofitableforcomplementaryproducts. LeszczycandHaubl(2010) Multipleunitpromotions(e.g.2for$1.50)aremoreeffectivethansingleunitpromotions (75-centseach). Wansink,KentandHoch(1998) ValidatingOptimizationModels PricingModels Categorypricingofautomobileparts. Mantrala,Seetharaman,Kaul, GopalakrishnaandStam(2006) Scholarshipsanduniversityadmissiondecisions Belloni,Lovett,Bouldingand Staelin(2012) AdvertisingModels Optimizingsearchengineadvertisingbids. SkieraandNabout(2013) Anadvertisingcontactmodelforcatalogmailing. Simester,SunandTsitsiklis (2006) Estimatingtheincrementalimpactofmarketingactivitiesindifferentchannels. LiandKannan(2014) 29|P a g e Banneradvertisingoptimization. Urban,Liberali,MacDonald, BordleyandHauser(2014) MarketResearchandProductDevelopmentModels Increasingresponseratestoonlinemarketingresearchpanels. Neslin,Novak,Bakerand Hoffman(2009) Forecastingcustomerdemandforreallynewproducts. Urban,Hauser,Qualls, Weinberg,BohlmannandChicos (1997) OtherTopics SalesforceOptimization Coordinatingsalescallstomatchforecastsofcustomers’purchasingdecisionscan increaseprofits. Kumar,VenkatseanandReinartz (2008) Salesforcesalescontestshouldincludemultipleprizewinners,andrankorderingpricesin Lim,AhearneandHam(2009) contestswithmultiplewinnersdoesnotincreasesalesorrevenues. Word-of-MouthandReferrals Word-of-mouthismoreeffectiveatincreasingsalesifitiscomesfromrelativelylessloyal customers,andfromacquaintancesinsteadoffriends. GodesandMayzlin(2009) Whichcustomersshouldafirmtargetwhendesigningcustomerreferralprograms? Kumar,PetersonandLeone (2010) ParticipationinanOnlineCommunity Participationinanonlinecommunityleadstolessspendingandfewerlistings. Algesheimer,Borle,Dholakia andSingh(2010) Participationinanonlinecommunitymakescustomersmorewillingtoengageinrisky biddingbehavior,particularlywhentiestoothercommunitymembersarestrong. Zhu,Dholakia,Chenand Algesheimer(2012) UserscontributetoTwitterbecausetheycareabouthowpeopleperceivethem,rather thanbecausetheyderiveintrinsicutilityfromtheactivity. ToubiaandStephen(2013) EncouragingPositiveBehaviors Competitions,pledgesandincentivescanallimprovechildren’sfoodchoices. Raju,RajagopalandGilbride (2010) Earmarkingearningscanincreasesavingsrates. SomanandCheema(2011) Other Remodelingaretailspaceincreasessalesmorefornewcustomersthanestablished customers. DaggerandDanaher(2014) Auctionoutcomescanbeinfluencedbyshippingcosts,secretreserveprices,andother auctionfeatures. HaruvyandLeszczyc(2011) 30|P a g e