Editorial---Marketing Science and the Financial Crisis

W you look at the title of this editorial, you might be expecting a piece that discusses page reductions, cost cutbacks, etc. at Marketing Science— the journal—as driven by the current worldwide economic crisis. Marketing Science does not appear in italics in the title because I am not referring to the journal—in fact, submissions have never been higher, and our submissions globally have increased by more than 20%. Moreover, thanks to increased funding by INFORMS and our marketing science subdivision, ISMS, we have had a 50% page increase for Marketing Science, articles now appear in print 8–10 months after acceptance due to a reduced backlog, and articles are published within 3–5 months of acceptance via Articles in Advance. Thus, the demand for a greater supply of journal pages and faster turnaround times has been met; we are economically countercyclical! Rather, this editorial is written to spur research and thinking in the field of “Marketing Science”—on the impact that down economic times have on the research and teaching that we do. That is, it would be an “embarrassment” ifMarketing Science (the journal) and marketing science scholars were thought takers from other disciplines during this crisis. Who hasn’t seen popular press articles suggesting that total advertising is down? Many of us have been called by newspapers to quote on whether this is the time to cut back or aggressively spend on advertising. Or, what about those articles that suggest the shift from mass marketing to forms of advertising that are more directly measurable (e.g., paid search, banner ads, etc.)? More specifically, there are many general research problems and research paradigms that are directly within the “heart” of what we publish at Marketing Science (and teach at our respective institutions) that could incorporate aspects of financial constraints. This list is not meant at all to be exhaustive, but some examples that come to mind are as follows: 1. Customer Lifetime Value: How are attrition rates affected? What is a reasonable time horizon? Are acquisition costs higher or lower than before? Are the same retention tactics working? Has the ability to forecast out-of-sample customer value deteriorated? 2. Structural Models: As we hear almost daily about layoffs and store closings, isn’t the ability to take the utility function of the firm and competitors (as opposed to simply consumer demand) more important than ever? What about problems that involve endogenous network externality (consumption of others, entry decisions of others, etc.)? 3. Choice Modeling: Are people utilizing the same decision rules as before, or are people becoming more (price) lexicographic? Should budget constraints play a larger role in choice models? 4. The “No-Choice Option”: Whether it is in analytical models that have assumptions about market coverage, consumer behavior papers that look at choice uncertainty and deferral, or statistical models that try to forecast consumer’s choices, is the No-Choice Option the default now, and should it take greater prominence in our models? 5. Are Past Lessons from Marketing Strategy Outdated?: Will the same optimal market and organizational structures hold? Do firms need to reorganize, launch products in different ways, increase the importance of test markets, and/or look for products that more quickly penetrate versus skim? Does the classic “5-P, 4-C” framework still apply? If yes, has the importance of the “context C” increased dramatically? In summary, now is not the time for marketing science or Marketing Science to “sit on the sidelines.” We are a cross-disciplinary and applied field that sits at the interface of economics, statistics, psychology, decision making, etc., which are all relevant to how consumers optimize, act, and think during economically challenging periods. Furthermore, papers that go the extra mile can have an impact on practice and social welfare, something marketing science and Marketing Science strives for.