UC RIVERSIDE/J D POWER TEAM WINS
2006 INFORMS SOCIETY FOR MARKETING SCIENCE PRACTICE PRIZE

The 2006 INFORMS Society for Marketing Science Practice Prize competition judges declared a winner at the 28th Marketing Science Conference on 9 June, hosted by the Katz Graduate School of Business at the University of Pittsburgh. The Prize is supported by grants from the Marketing Science Institute, the Brand Science Institute, the Institute for the Study of Business Markets, the European Marketing Academy, and the Australian Marketing Institute, in conjunction with the Australian and New Zealand Academy of Marketing.

The winning entry was “Incentive Planning System: A DSS for Planning Pricing and Promotions in the Automobile Industry” by a joint team of Professor Jorge Silva-Risso from the University of California, Riverside and J.D. Power’s Irina Ionova.

Their work reports on a promotion analysis tool that enabled automobile manufacturers to improve the timing, frequency, and components of their promotional activity to maintain sales but reduce margin loss. The authors presented evidence of savings in the order of two billion dollars, with Daimler Chrylser executives alone claiming annual benefits of $500 million. The research used the sales data available to J D Power to help it work with individual car manufacturers to calculate the dynamic impact of sales promotions. The work was implemented in a phased approach, allowing an evolutionary increase in sophistication amongst its users.

The 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. The 2006 Practice Prize Committee was comprised of Nils Andres, (representing the Brand Science Institute), Pete Fader, Delaine Hampton from Procter and Gamble, Dominique Hanssens (representing the Marketing Science Institute), Manfred Krafft, Gary Lilien (representing the Institute for the Study of Business Markets), John Roberts (Prize Committee Chair), Steve Shugan (as Marketing Science editor), Jan-Benedict Steenkamp (representing the European Marketing Academy), and Tulin Erdem (as ISMS President).

The other finalists in the competition were:

“The Power of CLV” by
V. Kumar, Denise Beckman, Tim Bohling, Rajkumar Venkatesan
This research described a carefully planned and implemented program within IBM to optimize the number of times the organization “touches” its customers, incorporating innovations with respect to alignment with corporate objectives, forecasting cost to serve, imputing unobserved contribution margins, and allowing for inter-dependence of purchase incidence and quantity.

“ BRAN*EQT: A Model and Simulator for Estimating, Tracking, and Managing Multi-category Brand Equity” by
Venkatesh Shankar, Pablo Azar, and Matthew Fuller
In the BRAN*EQT study the researchers examine the drivers of the Allstate brandname. By understanding how advertising investments directly influenced the brand equity of Allstate, the researchers were able to make brand building activities within the firm accountable. This lead to advertising changing from being viewed as a discretionary cost, to a strategic investment. One of the useful aspects of the research was to untease the benefits of corporate branding into the advantages that were captured by each of the divisions within Allstate.

“Planning New Tariffs at Tele.Ring – An Integrated STP Tool Designed for Managerial Applicability” by
Martin Natter, Andreas Mild, Alfred Taudes, and Udo Wagner
Telering is a leading cellular phone supplier within Austria. A new entrant threatened its position and past experience suggested its share could become marginal as it was squeezed by different players within the market. By undertaking a detailed segmentation study Telering was able to identify a new market opportunity of no upfront subscription charges, which would be difficult for other competitors to mimic. A sophisticated perceptual mapping study not only made the resulting service innovation credible to senior management, overcoming internal barriers to its launch, it also provided ideas as to how the product could be introduced with a compelling and relevant advertising campaign.

As with previous competitions, the presentations were professionally videotaped and have been edited especially for classroom use. These DVD versions of the presentations are in “chapter” format, enabling rapid and easy selection of the aspects of the presentations that instructors wish to highlight. DVD adopters also have access to the papers and the related competition powerpoint presentations for their use in the classroom.
This material, along with the material from previous competitions (available now) will be available by October 15 at http://www.informs.org/Edu/MarketingScience

In addition, papers and reports on these outstanding implementations of marketing science will be appearing in a forthcoming issue of Marketing Science. Short 3 to 4 minute video summaries of each of the presentations are now available at
http://www2.informs.org/Edu/MarketingScience/

We are already soliciting entries for the 2007 Practice Prize Competition. Look for a forthcoming announcement or contact John Roberts at JHRoberts@london.edu for submission details.

Submitted by John Roberts, Chair 2006 ISMS Practice Prize Competition Committee
Contact : JHRoberts@London.edu or johnr@agsm.edu.au