Handbook of Marketing Analytics Methods and Applications in Marketing Management, Public Policy, and Litigation Support Edited by Natalie Mizik Professor of Marketing and J. Gary Shansby Endowed Chair in Marketing Strategy, Foster School of Business, University of Washington, USA Dominique M. Hanssens Distinguished Research Professor of Marketing, Anderson School of Management, University of California, Los Angeles, USA Cheltenham, UK • Northampton, MA, USA MIZIK_9781784716745_t.indd 3 14/02/2018 16:38 © Natalie Mizik and Dominique M. Hanssens 2018 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical or photocopying, recording, or otherwise without the prior permission of the publisher. Published by Edward Elgar Publishing Limited The Lypiatts 15 Lansdown Road Cheltenham Glos GL50 2JA UK Edward Elgar Publishing, Inc. William Pratt House 9 Dewey Court Northampton Massachusetts 01060 USA A catalogue record for this book is available from the British Library Library of Congress Control Number: 2017950469 This book is available electronically in the Business subject collection DOI 10.4337/9781784716752 ISBN 978 1 78471 674 5 (cased) ISBN 978 1 78471 675 2 (eBook) Typeset by Servis Filmsetting Ltd, Stockport, Cheshire MIZIK_9781784716745_t.indd 4 14/02/2018 16:38 Contents List of contributors ix Overview of the chapters xviii Introduction 1 Natalie Mizik and Dominique M. Hanssens METHODS CHAPTERS PART I ExPERIMENTAL DESIGNS 1 Laboratory experimentation in marketing 11 Angela Y. Lee and Alice M. Tybout 2 Field experiments 32 Anja Lambrecht and Catherine E. Tucker 3 Conjoint Analysis 52 Olivier Toubia PART II CLASSICAL ECONOMETRICS 4 Time-series models of short-run and long-run marketing impact 79 Marnik G. Dekimpe and Dominique M. Hanssens 5 Panel data methods in marketing research 107 Natalie Mizik and Eugene Pavlov 6 Causal inference in marketing applications 135 Peter E. Rossi PART III DISCRETE CHOICE MODELING 7 Modeling choice processes in marketing 155 John Roberts and Denzil G. Fiebig 8 Bayesian econometrics 181 Greg M. Allenby and Peter E. Rossi v MIZIK_9781784716745_t.indd 5 14/02/2018 16:38 vi Handbook of marketing analytics 9 Structural models in marketing 200 Pradeep K. Chintagunta PART Iv LATENT STRUCTURE ANALySIS 10 Multivariate statistical analyses: cluster analysis, factor analysis, and multidimensional scaling 227 Dawn Iacobucci PART v MACHINE LEARNING AND BIG DATA 11 Machine learning and marketing 255 Daria Dzyabura and Hema Yoganarasimhan 12 Big data analytics 280 Asim Ansari and Yang Li PART vI GENERALIzATIONS AND OPTIMIzATIONS 13 Meta analysis in marketing 305 Donald R. Lehmann 14 Marketing optimization methods 324 Murali K. Mantrala and Vamsi K. Kanuri CASE STUDIES AND APPLICATIONS PART vII CASE STUDIES AND APPLICATIONS IN MARKETING MANAGEMENT 15 Industry applications of conjoint analysis 375 Vithala R. Rao 16 How time series econometrics helped Inofec quantify online and offline funnel progression and reallocate marketing budgets for higher profits 390 Koen Pauwels 17 Panel data models for evaluating the effectiveness of direct-to-physician pharmaceutical marketing activities 402 Natalie Mizik and Robert Jacobson MIZIK_9781784716745_t.indd 6 14/02/2018 16:38 Contents vii 18 A nested logit model for product and transaction-type choice planning automakers’ pricing and promotions 415 Jorge Silva-Risso, Deirdre Borrego and Irina Ionova 19 visualizing asymmetric competitive market structure in large markets 431 Daniel M. Ringel and Bernd Skiera 20 User profiling in display advertising 448 Michael Trusov and Liye Ma 21 Dynamic optimization for marketing budget allocation at Bayer 458 Marc Fischer and Sönke Albers PART vIII CASE STUDIES AND APPLICATIONS IN PUBLIC POLICy 22 Consumer (mis)behavior and public policy intervention 473 Klaus Wertenbroch 23 Nudging healthy choices with the 4Ps framework for behavior change 486 Zoë Chance, Ravi Dhar, Michelle Hatzis, Michiel Bakker, Kim Huskey and Lydia Ash 24 Field experimentation: promoting environmentally friendly consumer behavior 502 Noah J. Goldstein and Ashley N. Angulo 25 Regulation and online advertising markets 511 Avi Goldfarb 26 Measuring the long-term effects of public policy: the case of narcotics use and property crime 519 Keiko I. Powers 27 Applying structural models in a public policy context 539 Paulo Albuquerque and Bart J. Bronnenberg PART Ix CASE STUDIES AND APPLICATIONS IN LITIGATION SUPPORT 28 Avoiding bias: ensuring validity and admissibility of survey evidence in litigations 549 Rebecca Kirk Fair and Laura O’Laughlin MIZIK_9781784716745_t.indd 7 14/02/2018 16:38 viii Handbook of marketing analytics 29 Experiments in litigation 561 Joel H. Steckel 30 Conjoint analysis in litigation 572 Sean Iyer 31 Conjoint analysis: applications in antitrust litigation 590 Michael P. Akemann, Rebbecca Reed-Arthurs and J. Douglas Zona 32 Feature valuation using equilibrium conjoint analysis 609 John R. Howell, Greg M. Allenby and Peter E. Rossi 33 Regression analysis to evaluate harm in a breach of contract case: the Citri-Lite Company, Inc., Plaintiff v. Cott Beverages, Inc., Defendant 633 Rahul Guha, Darius Onul and Sally Woodhouse 34 Consumer surveys in trademark infringement litigation: FIJI vs. vITI case study 640 T. Christopher Borek and Anjali Oza 35 Survey evidence to evaluate a marketing claim: Skye Astiana, Plaintiff v. Ben & Jerry’s Homemade, Inc., Defendant 652 Alan G. White and Rene Befurt 36 Machine learning in litigation 661 Vildan Altuglu and Rainer Schwabe Index 671 MIZIK_9781784716745_t.indd 8 14/02/2018 16:38 Contributors Michael P. Akemann is a Managing Director at Berkeley Research Group, LLC, a strategic advisory and expert consulting firm. He is an economist who consults and testifies on antitrust, intellectual property, and general commercial damages issues. Sönke Albers is Professor of Marketing and Innovation, Kühne Logistics University, Hamburg, Germany. Professor Albers’ research interests include marketing planning, sales management, and diffusion of innovations. Paulo Albuquerque is Associate Professor at INSEAD. His research interests focus on firm decisions to introduce new products and consumer decisions to search, use, and buy products online. Greg M. Allenby is Helen C. Kurtz Chair in Marketing, Professor of Marketing, and Professor of Statistics at the Ohio State University Fisher College of Business. Professor Allenby’s research focuses on the develop- ment and application of quantitative methods in marketing. His research is used to improve product, pricing, promotion and targeting strategies at leading firms. Vildan Altuglu is Principal at Cornerstone Research. She specializes in applying economic analysis and marketing research techniques to con- sumer fraud and product liability, privacy and data breach, antitrust, intellectual property, and general business litigation matters. She holds a Ph.D. in Marketing from Columbia Business School. Ashley N. Angulo is Postdoctoral Associate at Disney Research within the Behavioral Science unit studying social influence and decision-making. Asim Ansari is the William T. Dillard Professor of Marketing at the Columbia Business School. Professor Ansari’s research addresses customer relationship management, customization of marketing activities and product recommendations over the internet, social networks modeling and Bayesian modeling of consumer actions. Lydia Ash is Director of People Operations at Google and people strate- gist for many of the key growth businesses. An organizational design expert, current key projects include architecting an innovative incentive structure system for performance management and career development. ix MIZIK_9781784716745_t.indd 9 14/02/2018 16:38 x Handbook of marketing analytics Michiel Bakker Director of Google’s Global Food program. Michiel and his team take pride in fueling the minds and bodies behind Google’s inno- vative products, serving over 150,000 delicious, nutritious, responsibly sourced meals around the world each day. Michiel has over 25 years of global food and beverage operations experience, including 17 years with Starwood Hotels and Resorts. Rene Befurt is a vice President in the Boston office of Analysis Group, Inc. Dr. Befurt specializes in applying marketing research methodologies to both litigation and strategy casework. His expertise lies in cases involv- ing false advertising and trademark disputes, the assessment of disclosures on consumer decision-making, choice modeling, valuations of product features, and general marketing and branding strategies. T. Christopher Borek is a Managing Principal in the Washington, DC office of Analysis Group, Inc. as well as a Senior Policy Scholar in the Center for Business and Public Policy in Georgetown University’s McDonough School of Business. Dr. Borek specializes in the application of microeconomics, finance, and statistics to litigation and complex busi- ness problems. He expertise is in intellectual property, antitrust, consumer harm, finance, and tax disputes. Deirdre Borrego is Senior vice President and General Manager of the Data and Analytics Division at J.D. Power. In this role, she is the senior leader responsible for managing all aspects of business strategy and product development, operations, talent development and financial performance. The Data and Analytics Division provides the automotive, financial serv- ices and insurance industries with unparalleled insights helping clients make more informed decisions ranging from marketing, inventory man- agement, pricing and vehicle valuations. Bart J. Bronnenberg is Professor of Marketing and the GSB Trust Faculty Fellow for 2017–2018 at Stanford University, and a research fellow at the Center for Economic Policy Research (CEPR) in London. He studies distribution and retailing, the persistence of branding effects, and (online) search behavior. Zoë Chance is an assistant professor in marketing at the yale School of Management. She is an expert in persuasion, focusing on tiny tweaks that help people lead richer, healthier, happier lives. Pradeep K. Chintagunta is the Joseph T. and Bernice S. Lewis Distinguished Service Professor of Marketing at the Booth School of Business, University of Chicago. He conducts research into the analysis of household purchase behavior, pharmaceutical markets, and technology products. MIZIK_9781784716745_t.indd 10 14/02/2018 16:38 Contributors xi Marnik G. Dekimpe is Research Professor of Marketing at Tilburg University and Professor of Marketing at KU Leuven. His research focuses on econometric models of marketing effectiveness, with particular reference to international retailing and to the impact of macro-economic fluctuations on marketing. Ravi Dhar is the George Rogers Clark Professor of Management and direc- tor of the Center for Customer Insights at the yale School of Management and Professor of Psychology in the Department of Psychology, yale University. He is an expert in consumer behavior and branding, marketing management, marketing strategy, and consumer decision-making. Daria Dzyabura is an Assistant Professor of Marketing at the New york University Stern School of Business. Her research focuses on methods for analyzing complex decision-making rules and developing efficient forecasting methods for multi-faceted buying situations. Denzil G. Fiebig is a Professor of Economics at the UNSW Australia Business School. His primary expertise is in micro-econometrics and in particular discrete choice modelling. He also has research interests in forecasting and applied econometric methods. His recent empirical work has concentrated on health economics with an emphasis on modelling the behavior of individuals and health practitioners as they interact to determine utilization of health care and services. Marc Fischer is Professor of Marketing and Market Research, University of Cologne, Germany, and Professor of Marketing, University of Technology Sydney, Australia. His expertise includes the measurement and management of marketing performance, brand management, and the optimization of marketing mix. Avi Goldfarb is Ellison Professor of Marketing at Rotman School of Management, University of Toronto. Dr. Goldfarb’s research focuses on understanding the impact of information technology on marketing, on universities, and on the economy. His research has also explored the value of brands and the role of experience in managerial decision-making. Noah J. Goldstein is Associate Professor of Management and Organizations, Psychology, and Medicine at the UCLA Anderson School of Management. He studies social influence in a number of contexts, including consumer behavior, management, and medicine. Rahul Guha is Senior vice President at Cornerstone Research. He heads the firm’s antitrust and competition practice and is the former head of its life sciences practice. He holds a PhD in Marketing from Cornell University. 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