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Uncovering Clues from Marketing Data

April 30, 2014

The data collected at thousands of point-of-sale terminals and consumer homes offer clues into the singular popularity of soft drinks, ice cream, and canned soup brands. For academic researchers, these data serve as a real-world laboratory to study the underlying mechanisms driving consumer shopping behavior as well as the strategies of competing retailers and branded goods manufacturers.

In 2012, Booth’s Kilts Center for Marketing announced a groundbreaking agreement with The Nielsen Company to make the latter’s databases available to academic researchers. On May 6, the collaboration will take center stage at an inaugural conference, Marketing Insights at Chicago Booth. The daylong conference at Gleacher Center will showcase a range of research that uses the data to generate insights on topics including how consumers choose between private label and brand name goods, and the impact of the financial crisis on brand strength.

The Nielsen datasets are made up of Consumer Panel Data that track purchases by 40,000 to 60,000 US households dating back to 2004 and Retail Scanner Data on sales generated by over 35,000 stores across 90 participating retail chains dating back to 2006.

Jean-Pierre Dubé, Sigmund E. Edelstone Professor of Marketing and director of the Kilts Center, said the conference will highlight the breadth and scope of the research that’s under way. “We hope to provide our audience with an overview of the types of research ideas that have been stimulated by the Nielsen data,” Dubé said.

Consumer packaged goods companies and retailers typically use Nielsen data to track, for example, the sales and market shares of their products. Researchers, in contrast, are more likely to pursue bigger picture questions, such as how economic and environmental dynamics influence consumer-purchasing decisions. Academic inquiries can help stimulate new ways to use the data by consumer packaged goods manufacturers and retailers as they develop and refine their marketing strategies, Dubé said.

Beyond this conference, Kilts would like to develop a consortium of companies that supports research on topics of mutual interest to industry and academics, using these and other datasets, said Art Middlebrooks, clinical professor of marketing and executive director of the Kilts Center.

“The consortium companies will get early access to the insights being generated by the research, perhaps earlier than their competitors,” Middlebrooks said.

The conference also will feature John Burbank, president of Nielsen Strategic Initiatives, who will discuss the digital revolution in marketing. Platforms such as Facebook enable marketers to connect what consumers watch—on television, on the internet, and on their phones—to what they buy, in completely new ways. That integration, he will argue, enables advertisers and media companies to better understand their audiences. Media companies can attract the right advertisers at the best price, and advertisers can be confident that they are getting the best possible audience. Finally, new datasets will be available, providing further opportunities for academic research.

Among the research being presented:

• The effect of recession on demand for private label goods: Günter J. Hitsch, professor of marketing, will present his research on private label demand and the recession. Hitsch, along with Dubé and Peter Rossi, a professor at UCLA Anderson School of Management, have explored whether the 2008-09 economic downturn caused consumers to migrate to less expensive private label products. The researchers found that sales of private labels goods have been growing, but much of the growth has been a long-term trend predating the recession. Hitsch will discuss the elasticity of demand for private label products with respect to income and implications for the management of private label and national brands in the presence of large income and wealth shocks.

• How subsidies alter purchasing habits: Romana Khan of Özyeğin University in Turkey, will present research that tracked the purchasing patterns of families enrolled in the federal Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), which subsidizes the purchase of nutritious foods for low-income women and their children. The study by Khan; Sanjay Dhar, James H. Lorie Professor of Marketing; and Ting Zhu of the University of British Columbia’s Sauder School of Business, evaluates how participation in WIC impacts the consumption patterns and preferences of participants and as a consequence, the performance of brands included in the program. Initial results suggest that new habits in the purchase of healthy foods persisted even after participants left the program.

• Sophisticated shoppers and the brand premium: Dubé will present research into the factors that influence consumers to opt for generic products over brand names. Dubé, along with Matthew Gentzkow, Richard O. Ryan Professor of Economics and Neubauer Family Faculty Fellow; Jesse Shapiro, Chookaszian Family Professor of Economics; and Bart Bronnenberg of Tilburg University in the Netherlands found that a consumer’s profession and specific product knowledge were key factors. For example, doctors, nurses, and other health-care professionals knowledgeable about the drug’s ingredients were more likely to buy generic headache medicines. In a similar way, professional chefs familiar with food ingredients were more likely to purchase private label pantry staples such as salt, sugar, and baking powder.—Judith Crown

For more faculty research on consumer data, visit Booth's Capital Ideas

For more information about other speakers from this event, visit the Kilts Center for Marketing events page

To learn more about Nielsen datasets available to tenure-line faculty and PhD students, visit the Kilts Center for Marketing.