The reason for this growth has been an increased awareness by GSB students and the business world in general that marketing issues are central to the success of firms. This growth has been made possible through a determined effort to attract first-rate scholars and teachers to our marketing group. In the past five years, we have hired seven new faculty members. There is excitement in the air as this group of energetic scholars sets about solving important marketing problems.
The work of our faculty and students is supported by the James M. Kilts Center for Marketing. The Kilts Center funds development of the MBA curriculum, provides scholarships for students concentrating in marketing, and provides resources for faculty research. Just this last year, we created a new program of marketing fellowships that offers exceptional MBA students a two-year, $50,000 scholarship and a mentorship with a prominent business leader in marketing. The fellowship program will help us compete for the top talent among prospective students with a strong interest in marketing.
The papers in this issue of Capital Ideas reflect the diverse interests and strengths of our faculty. The papers take on a wide range of important current topics in marketing including optimal bidding in auctions, channel design, nonverbal consumer communication, and the geography of brands.
In the first article, �Strategic Bidding on eBay,� Robert Zeithammer looks at consumer behavior in online auctions. Zeithammer finds that buyers should be strategically �forwardlooking� in that they should take into account information about future auctions of the same product. His elegant theoretical model, drawing on a theory of dynamic optimization, predicts that sophisticated forward-looking bidders should lower their bids when there are more (and sooner upcoming) future auctions for substitute products. Based on two different datasets from eBay, it seems that eBay bidders do indeed behave as expected. The findings have implications not only for buyer and seller strategies on eBay, but also for the design of auctions in general�for example, how information about upcoming auctions should be made available.
The second article, �Changing Channels,� highlights research by Pradeep Chintagunta that recognizes the role of the Internet in today�s business world. Chintagunta�s research is a marvelous example of the use of modeling, including empirical model calibration, to implement the idea of channel management in a specific industry: personal computers. Managing multiple channels and channel relationships within each channel is a complex task of strategic importance. The PC industry demonstrates that technological innovation, such as the advent of the Internet, can dramatically alter the competitive landscape. Marketing is essential to managing these major changes, and firms that understand such changes as sources of opportunity can reap considerable benefits.
Suresh Ramanathan and Ann McGill�s research, highlighted in �Just One Look,� is no less innovative. Using rigorous experiments, they document that nonverbal communication between consumers colors their experiences. Because many consumer experiences are joint ones, Ramanathan and McGill�s research has broad potential applicability. Designing �experiences� is becoming a central focus for marketers. Ramanathan and McGill�s findings are groundbreaking for product and service design strategies, as well as measuring consumer satisfaction.
The article �The Geography of Brands,� on research by Sanjay Dhar and Jean-Pierre Dub�, documents an important finding: a brand�s share varies considerably across local markets. They find preliminary evidence of an advantage to the brands that enter the local market early. Building early relationships with the trade and with the consumer� through advertising with the latter�might be the source of lasting differences across markets. This research is critical to manufacturers, who must think strategically at the national level about the long-run effects of marketing investments, advertising, and distribution. Could it be that early availability in the stores plus establishing early positions in consumers� minds and reinforcing these positions over time via advertising create permanent �local presence� strength for the brand?
This research continues the common thread for Marketing at the GSB�a commitment to objective and rigorous scholarship with the potential to make substantial longrun contributions.
Abel P. Jeuland
Charles H. Kellstadt Professor of Marketing at the University
of Chicago Graduate School of Business
Peter E. Rossi
Joseph T. and Bernice S. Lewis Professor of Marketing and
Statistics and Director of the James M. Kilts Center for Marketing
at the University of Chicago Graduate School of Business