Gary Lilien ISMS-MSI Practice Prize
Introduction
Stephen Anderson-Macdonald, Rajesh Chandy and Bilal Zia have won the 2015-2016 award
Press Release July 10, 2016
World Bank Research Team Wins 2015-2016 Gary Lilien ISMS-MSI Practice Prize Award
The 2015-2016 Gary Lilien ISMS-MSI Practice Prize has been awarded to Stephen Anderson-Macdonald (Stanford University), Rajesh Chandy (London Business School), and Bilal Zia (World Bank) for their work “The Impact of Marketing Skills on Business Growth, Prosperity, and Survival: Insights from a Randomized Controlled Trial in Collaboration with the World Bank.”
The Award competition and the ceremony took place June 17 at the INFORMS Society for Marketing Science Conference held in Shanghai. The Conference, with over 740 attendees, highlights advances in the conceptualization, empirical testing and application of marketing science techniques.
The World Bank team presented evidence from the first randomized evaluation of the impact of sales and marketing skills training relative to finance skills on business practice and performance. The empirical setting of the research was among micro-enterprises in Cape Town, South Africa. The team offered intensive sales and marketing training to one randomly selected group of entrepreneurs, intensive finance and accounting training to another, and no training to a control group. It found that marketing skills have a substantial impact on business growth, employment, and prosperity. Both financial and marketing training increased profits by an average of 61% and owner happiness by about 10%. However, while financial training tended to improve profits relative to the control by reducing costs, marketing increased them by growing the business and employing more staff.
“This work—as well as that of the other finalists–represents the finest of what marketing scientists have to offer practitioners. Each finalist used targeted marketing science modeling approaches to help the client organization improve its profits and performance substantially" noted Practice Prize Committee Chair John Roberts, Professor of Marketing at the University of New South Wales.
The other finalists (in alphabetical order) were:
Thomas Blake (eBay Research Labs), Chris Nosko (University of Chicago and eBay Research Labs), and Steven Tadelis (UC Berkeley and eBay Research Labs) with their application entitled “Consumer Heterogeneity and Paid Search Effectiveness: A Large Scale Field Experiment”
The eBay team looked at the net effect of paid advertising by estimating the extent to which paid search advertising cannibalized url visits that would have eventuated by organic search anyway. It found that brand-keyword ads have no measurable short-term benefits. For non-brand keywords, it found that new and infrequent users are positively influenced by ads but that more frequent ones are not. Accounting for cannibalization takes key word purchases by eBay from being extremely profitable to loss-making. Eliminating bidding on its own brand name keywords is estimated to have saved eBay $US40 mm.
Joost Bosma (National Dutch Railways), Martin Heijnsbroek (MIcompany), and Peter C. Verhoef (University of Groningen, Customer Insights Center) describing their research on “An Analytical Based Service Monitor and Improvement System for the National Dutch Railways: A Big Data Approach”
In many service industries firms aim to increase customer satisfaction. This research involved a project for the Dutch National Railways in which the team identified the major drivers of customer satisfaction, as well as predicted customer satisfaction. The results allowed the management of the Dutch National Railways to developed new initiatives, such as the development of a seating app and a stronger social media strategy, to substantially increase user-satisfaction towards the target level of 77% (even during severe winter freezes) at little or no overall additional cost.
Vivek F. Farias (Massachusetts Institute of Technology), Srikanth Jagabathula (New York University), and Devavrat Shah (Massachusetts Institute of Technology) with their work on “Building Optimized and Hyperlocal Product Assortments: A Nonparametric Choice Approach used by Celect”
Bricks-and-mortar retailers with multiple stores must address the local tastes and preferences of the customers in those different locations. For each store location, and given a dollar budget, the firm must decide how many of each product, style and color to carry—the assortment problem. The authors bring a new methodological approach to this assortment problem, using individuals’ historical shopping patterns to predict demand for required stock keeping unit levels for specific stores. They report an improvement of 6.65% in revenue when the approach was implemented, in line with model forecasts.
Marc Fischer (University of Cologne and University of Technology Sydney) for his study entitled “Managing Advertising Campaigns for New Product Launches in the Automobile Industry: An Application at Mercedes-Benz”
This research introduced a new approach to manage advertising campaigns for new product launches at Mercedes-Benz, based on an innovative method to create a single-source database. Management used the calibrated model to monitor the effectiveness of expenditures across media channels, predict advertising key performance indicators at varying budget levels, and identify cost savings from optimizing the total budget and media mix. By going against conventional wisdom which recommends a move from TV to digital media, the strategy was able to achieve savings of $US 12.3 mm in the German market alone.
Along with Professor Roberts, the judges for the competition were Steve Cohen, In4mation Insights and industry representative; Professor Dominique Hanssens, UCLA and ISMS President; Professor Bernd Skiera, Goethe University at Frankfurt and European Marketing Academy (EMAC) representative; Professor K. Sudhir, Yale University and Editor-in-Chief of Marketing Science; and Earl Taylor, Chief Marketing Officer, Marketing Science Institute. The judges selected the five finalists from over two dozen excellent entries and expressions of interest.
Established in 2003, the Gary Lilien ISMS-MSI Practice Prize is awarded for an outstanding implementation of marketing science concepts and methods. The methodology used must be sound and appropriate to the problem and organization, and the work should have had significant, verifiable and, preferably quantitative impact on the performance of the client organization.
In addition to the Informs Society for Marketing Science and the Marketing Science Institute, the Gary Lilien ISMS-MSI Practice Prize is co-sponsored by EMAC and the Journal, Marketing Science.
Past papers describing these marketing science implementations are available in the journal Marketing Science and a capsule describing each finalist in this round is expected to appear in a future issue. Videos of past finalists and winners are available at techtv.mit.edu/collections/isms. Videos of the 2015-2016 presentations will be available at the site in the near future.
Enquiries: John Roberts (johnr@agsm.edu.au), Vice President Practice ISMS
