Eric Anderson

Anderson, Eric T. and Duncan Simester. 2001. Are Sale Signs Less Effective When More Products Have Them?. Marketing Science. 20(2): 121-140.

Anderson and Simester (1998) recently presented an equilibrium model predicting that customers who lack knowledge of market prices rely upon point of purchase sale signs to help evaluate posted prices. Their model predicts that sale signs increase demand but that the increase is smaller when more products have them. This moderating effect is critical to their argument. It regulates how many sale signs stores use and makes customer reliance on these cues an equilibrium strategy. We analyze data from a variety of sources, including historical data from a women's clothing catalog, a field study in that catalog, survey responses to catalog stimuli, and grocery store data for frozen juice, toothpaste and tuna. The analysis yields three conclusions. First, sale signs are less effective at increasing demand when more items have them. Second, total category sales are maximized when some but not all products have sale signs. Third, placing a sale sign on a product reduces the perceived likelihood that the product will be available at a lower price in the future, but the effect is smaller when more products have sale signs. By ruling out alternative hypotheses, the second and third conclusions suggest that moderation of the sale sign effect is in part due to Anderson and Simester's (1998) prediction that sale signs lose credibility when used on more products. The consistency of these findings is particularly reassuring given that limitations in the data do not extend across all of the data sources. Together the findings offer evidence supporting Anderson and Simester's equilibrium justification for customer reliance upon sale signs. The results are also of considerable practical importance to retailers. The demand effects that we observe are large, in some cases exceeding 50%.

Anderson, Eric T.. 2005. Keurig At Home. Case 5-105-005 (KEL021).

In February 2003, President and CEO Nick Lazaris faces critical decisions on Keurig’s launch of a new consumer coffee brewing system. Keurig has successfully sold single cup brewing systems through commercial distribution channels and is now expanding to the lucrative consumer segment. However, a meeting with key strategic partners six months prior to launch raised questions about the product design. This prompted the Keurig management team to revisit their decisions on product design, pricing, and the marketing plan. With six months to launch, what should they do?

Anderson, Eric T. and Elizabeth L Anderson. 2012. Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership. Case 5-411-751 (KEL714).

From 2002 to 2011, coffee-machine manufacturer Keurig Incorporated had grown from a privately held company with just over $20 million in revenues and a plan to enter the single serve coffee arena for home consumers, to a wholly owned subsidiary of Green Mountain Coffee Roasters, Inc., a publicly traded company with net revenues of $1.36 billion and a market capitalization of between $8 and $9 billion.

In 2003 Keurig had introduced its first At Home brewer. Now, approximately 25 percent of all coffee makers sold in the United States were Keurig-branded machines, and Keurig was recognized as among the leaders in the marketplace. The company had just concluded agreements with both Dunkin’ Donuts and Starbucks that would make these retailers’ coffee available for use with Keurig’s specialized brewing system.

The company faced far different challenges than when it was a small, unknown marketplace entrant. John Whoriskey, vice president and general manager of Keurig’s At Home division, had to consider the impact that impending expiration of key technology patents and the perceived environmental impact of the K-Cup® portion packs would have on the company’s growth. Whoriskey also wondered what Keurig’s growth potential was, and how the new arrangements with Starbucks and Dunkin’ Donuts could be leveraged to achieve it.

Anderson, Eric T. and Vasilia Kilibarda. 2015. NASCAR: Leading a Marketing Transformation in a Time of Crisis. Case 5-214-257 (KEL889).

It is February 2011 and Brian France, CEO of NASCAR (the National Association for Stock Car Auto Racing), is facing a crisis. In the last five years, attendance at weekend NASCAR races has fallen 22 percent and television viewership has declined 30 percent. Key marketing sponsors have recently left the sport. At the same time, the U.S. economy was only beginning to recover from an economic recession that had an adverse impact on the sport of auto racing as a whole. Some leaders within NASCAR counseled Brian that these trends in attendance, viewership, and sponsorship stemmed from the recession and that NASCAR should continue with business as usual. But Brian sensed that the industry needed fundamental change and that he, as CEO of NASCAR, was the one that must lead this change.

With Brian at the helm, NASCAR embarked on an unprecedented amount of qualitative and quantitative research to assess the strengths and weaknesses of the entire industry. At the center of this research was the NASCAR consumer. Highly engaged, enthusiastic consumers were at the heart of an industry business model that had been successful for decades. But in 2011, marketing within all of NASCAR needed to transform, as it was clear that consumers were disengaging with the sport.

As the consumer research results unfold, Brian and leaders within NASCAR must make tough choices and set priorities. The case focuses on four key areas in which decisions need to be made by NASCAR leadership: digital marketing and social media, targeting the next-generation NASCAR consumer, enhancing the star power of NASCAR drivers, and enhancing the consumer experience at NASCAR events. Focus group videos offer students a customer-centric deep-dive into these challenges.

At its heart, this is a case about great leadership and transforming marketing throughout an entire industry. A wrap-up video from CEO Brian France summarizes how NASCAR executives tackled the difficult questions posed in the case.

A Spanish translation of this case is available.

Anderson, Eric T., Daniel Abraham, Elizabeth L Anderson and Gus Santaella. 2013. Tupelo Medical: Managing Price Erosion. Case 5-412-750 (KEL707).

Robert Davidson, pricing manager for Tupelo Medical, was concerned about the variability in price paid for its top-selling product, the Micron 8 Series blood pressure monitoring system. Using historical transaction data, Davidson must determine the appropriate price floor. Setting a price too high risked the loss of a large number of customers, putting the company at substantial risk due to the importance of the product. Setting a price too low would impact Davidson’s ability to meet the stated objective of increasing margins by 3 percent. He wondered what the optimal price floor would be and what the expected profits would be for that new price floor. Additionally, the company’s business varied considerably by geographic region, account size and account type. As a result, he needed to consider whether it made sense to set a single price floor or whether he could improve profits by allowing some variability in the price floor by customer segment.

Anderson, Eric T. and Duncan Simester. 2001. Are Sale Signs Less Effective When More Products Have Them?. Marketing Science. 20(2): 121-140.

Anderson and Simester (1998) recently presented an equilibrium model predicting that customers who lack knowledge of market prices rely upon point of purchase sale signs to help evaluate posted prices. Their model predicts that sale signs increase demand but that the increase is smaller when more products have them. This moderating effect is critical to their argument. It regulates how many sale signs stores use and makes customer reliance on these cues an equilibrium strategy. We analyze data from a variety of sources, including historical data from a women's clothing catalog, a field study in that catalog, survey responses to catalog stimuli, and grocery store data for frozen juice, toothpaste and tuna. The analysis yields three conclusions. First, sale signs are less effective at increasing demand when more items have them. Second, total category sales are maximized when some but not all products have sale signs. Third, placing a sale sign on a product reduces the perceived likelihood that the product will be available at a lower price in the future, but the effect is smaller when more products have sale signs. By ruling out alternative hypotheses, the second and third conclusions suggest that moderation of the sale sign effect is in part due to Anderson and Simester's (1998) prediction that sale signs lose credibility when used on more products. The consistency of these findings is particularly reassuring given that limitations in the data do not extend across all of the data sources. Together the findings offer evidence supporting Anderson and Simester's equilibrium justification for customer reliance upon sale signs. The results are also of considerable practical importance to retailers. The demand effects that we observe are large, in some cases exceeding 50%.

Anderson, Eric T.. 2005. Keurig At Home. Case 5-105-005 (KEL021).

In February 2003, President and CEO Nick Lazaris faces critical decisions on Keurig’s launch of a new consumer coffee brewing system. Keurig has successfully sold single cup brewing systems through commercial distribution channels and is now expanding to the lucrative consumer segment. However, a meeting with key strategic partners six months prior to launch raised questions about the product design. This prompted the Keurig management team to revisit their decisions on product design, pricing, and the marketing plan. With six months to launch, what should they do?

Anderson, Eric T. and Elizabeth L Anderson. 2012. Keurig: From David to Goliath: The Challenge of Gaining and Maintaining Marketplace Leadership. Case 5-411-751 (KEL714).

From 2002 to 2011, coffee-machine manufacturer Keurig Incorporated had grown from a privately held company with just over $20 million in revenues and a plan to enter the single serve coffee arena for home consumers, to a wholly owned subsidiary of Green Mountain Coffee Roasters, Inc., a publicly traded company with net revenues of $1.36 billion and a market capitalization of between $8 and $9 billion.

In 2003 Keurig had introduced its first At Home brewer. Now, approximately 25 percent of all coffee makers sold in the United States were Keurig-branded machines, and Keurig was recognized as among the leaders in the marketplace. The company had just concluded agreements with both Dunkin’ Donuts and Starbucks that would make these retailers’ coffee available for use with Keurig’s specialized brewing system.

The company faced far different challenges than when it was a small, unknown marketplace entrant. John Whoriskey, vice president and general manager of Keurig’s At Home division, had to consider the impact that impending expiration of key technology patents and the perceived environmental impact of the K-Cup® portion packs would have on the company’s growth. Whoriskey also wondered what Keurig’s growth potential was, and how the new arrangements with Starbucks and Dunkin’ Donuts could be leveraged to achieve it.

Anderson, Eric T. and Vasilia Kilibarda. 2015. NASCAR: Leading a Marketing Transformation in a Time of Crisis. Case 5-214-257 (KEL889).

It is February 2011 and Brian France, CEO of NASCAR (the National Association for Stock Car Auto Racing), is facing a crisis. In the last five years, attendance at weekend NASCAR races has fallen 22 percent and television viewership has declined 30 percent. Key marketing sponsors have recently left the sport. At the same time, the U.S. economy was only beginning to recover from an economic recession that had an adverse impact on the sport of auto racing as a whole. Some leaders within NASCAR counseled Brian that these trends in attendance, viewership, and sponsorship stemmed from the recession and that NASCAR should continue with business as usual. But Brian sensed that the industry needed fundamental change and that he, as CEO of NASCAR, was the one that must lead this change.

With Brian at the helm, NASCAR embarked on an unprecedented amount of qualitative and quantitative research to assess the strengths and weaknesses of the entire industry. At the center of this research was the NASCAR consumer. Highly engaged, enthusiastic consumers were at the heart of an industry business model that had been successful for decades. But in 2011, marketing within all of NASCAR needed to transform, as it was clear that consumers were disengaging with the sport.

As the consumer research results unfold, Brian and leaders within NASCAR must make tough choices and set priorities. The case focuses on four key areas in which decisions need to be made by NASCAR leadership: digital marketing and social media, targeting the next-generation NASCAR consumer, enhancing the star power of NASCAR drivers, and enhancing the consumer experience at NASCAR events. Focus group videos offer students a customer-centric deep-dive into these challenges.

At its heart, this is a case about great leadership and transforming marketing throughout an entire industry. A wrap-up video from CEO Brian France summarizes how NASCAR executives tackled the difficult questions posed in the case.

A Spanish translation of this case is available.

Anderson, Eric T., Daniel Abraham, Elizabeth L Anderson and Gus Santaella. 2013. Tupelo Medical: Managing Price Erosion. Case 5-412-750 (KEL707).

Robert Davidson, pricing manager for Tupelo Medical, was concerned about the variability in price paid for its top-selling product, the Micron 8 Series blood pressure monitoring system. Using historical transaction data, Davidson must determine the appropriate price floor. Setting a price too high risked the loss of a large number of customers, putting the company at substantial risk due to the importance of the product. Setting a price too low would impact Davidson’s ability to meet the stated objective of increasing margins by 3 percent. He wondered what the optimal price floor would be and what the expected profits would be for that new price floor. Additionally, the company’s business varied considerably by geographic region, account size and account type. As a result, he needed to consider whether it made sense to set a single price floor or whether he could improve profits by allowing some variability in the price floor by customer segment.