Gary L. Lilien

• Doctor of Engineering
• Professor (Full) at Pennsylvania State University

Horizontal referrals –when suppliers recommend other suppliers– are a common phenomenon in complex B2B markets. For the referring supplier, giving the best-possible horizontal referral may strengthen the relationship with its customer, yet it may also threaten the referring supplier’s future revenues and cross-selling opportunities. Instead, the su...

Research in B2B markets has extensively investigated the role of long-term relationships between vendor firms and their customers. That research has focused on long-term personal relationships and trust between a vendor's sales rep – the key representative of the vendor firm – and B2B customers based on frequent sales encounters. However, in many B...

Customer analytics has moved to center stage and customer analytics budgets are rising rapidly. It is surprising, then, that many chief marketing officers (CMOs) are uncertain about whether these investments improve firm performance. We address this apparent disconnection using a multi-method approach. Using a large-scale global survey at two point...

Purpose This paper aims to argue that engagement with industry in research, while costly in terms of time and effort, can provide benefits in terms of measurable research impact, particularly in the business-to-business (B2B) domain. Design/methodology/approach This study draws joint experiences about how best to connect with an industry organizat...

A multiperiod, theoretical model characterizes the relationship between a publication that ranks universities and prospective students who might use this ranking to decide which university to attend. The published ranking offers information about the universities’ objective quality but also affects their prestige, which may increase student utility...

In business-to-business (B2B) markets, the success of key account management (KAM) teams depends on how they are structured and how they handle customer relationships. The authors conceptualize relationships among selling team members as a within-seller (intrafirm) network and the relationships between selling team members and buyer representatives...

Purpose – The products of some firms emerge neither from new technology developments nor from attempting to address articulated consumers’ needs, but from a company-internal design-driven approach. To explore this design-driven approach, we propose a construct, design orientation, as a firm’s ability to integrate functionality, aesthetics, and mean...

When a sales representative (rep) leaves a business-to-business firm, a crucial link with the rep's customers becomes severed. The firm reassigns those customers to different sales reps (either existing reps or new hires) in amanner that mitigates potential sales losses. What causal effect do sales rep departures have on customer-level revenue, and...

In this article, we lay out the challenges and research opportunities associated with business-to-business (B2B) buying. These challenges and opportunities reflect four aspects of B2B buying that the Institute for the Study of Business Markets (ISBM: www. isbm. org) has identified through a Delphi-like process: (1) the changing landscape of B2B buy...

Prior research has documented a general positive relationship between the deployment of customer analytics and firm performance. In this research we focus on the retailing industry, an industry characterized by tight margins that lead to careful scrutiny of all business investments. Using survey data from 418 top managers based in the Americas, Eur...

Although cross-selling offers significant benefits for both vendors and customers, three-quarters of all cross-selling initiatives fail, typically for sales force - related reasons. Prior research examining the antecedents of salespeople's product adoption has not yet shown whether or under which conditions such adoption behavior leads to better sa...

In business-to-business markets, suppliers often ask an existing customer to provide a referral for them (i.e., a supplier-selected referral), in which the supplier selects a referrer to influence a specific potential customer favorably. The selection of the referrer is important because the right referrer providing the right message can generate b...

In evaluating suppliers in complex purchasing decisions involving customized solutions, purchasing managers must judge the capabilities suppliers have to provide the solutions, a judgment that often includes considerable uncertainty. To reduce this uncertainty, suppliers often ask their existing customers to be reference customers and give a referr...

A few well-documented cases describe how the deployment of marketing analytics produces positive organizational outcomes. However, the deployment of marketing analytics varies widely across firms, and many C-level executives remain skeptical regarding the benefits that they could gain from their marketing analytics efforts. We draw on upper echelon...

The sales lead black hole—the 70% of leads generated by marketing departments that sales representatives do not pursue—may result from competing demands on sales reps' time. Using the motivation-opportunity-ability framework, the authors consider factors that influence sales reps' pursuit (or lack thereof) of marketing and selfgenerated leads. The...

Any formulation of the university ranking game involves the perspectives of the 3 key actors: (1) graduating high-school students, (2) universities, and (3) ranking publications. These university rankings are developed and maintained by for-profit publications or magazines, which must balance 2 potentially conflicting motives: (1) to provide studen...

As traditional sources of competitive advantage shrink, firms seek new ones. One such source of competitive advantage is product design because of its effects on customer experience. To understand the role and impact of product design on customer experience, we propose an integrated, customer-based framework for product design that we call the tota...

Volunteer users employ collaborative Internet technologies to develop open source products, a form of user-generated content, where time to product release is a crucial measure of project success. The open source community features two separate but related subcommunities: developer users who contribute time and effort to develop products and end us...

This comprehensive Handbook presents specially commissioned original essays on the societal roles and contexts facing women in business and management, the specific career and work-life issues of women in these fields, organizational processes affecting women, and the role of women as leaders in business and management. The essays shed light on the...

The goal of this paper is to study the behavior of consumers, dealers, and manufacturers in the car sector and present an approach that can be used by managers and policy makers to investigate the impact of significant demand shocks on profits, prices, ...

Internet and database technologies enable marketers to collect ever more extensive information on their customers' needs, preferences and past behaviors, but marketers often claim that they are challenged to make effective use of the information. Despite the substantial literature on market information utilization, the topic of customer information...

request. The Pennsylvania State University is committed to the policy that all persons shall have equal access to programs, facilities, admission, and employment without regard to personal characteristics not related to ability, performance, or qualifications as determined by University policy or by state or federal authorities. The Pennsylvania St...

The marketing decision models field has produced many striking developments that have had a dramatic impact on practice. However, the field has produced orders of magnitude more developments that have received minimal use. In this article, the author notes the many successful marketing model developments but then considers the relatively low level...

Whenever a recession occurs, there is a heated dialog among marketing academics and practitioners about the appropriate levels of marketing spending. In this article, the authors investigate whether firms should spend more on research and development (R&D) and advertising in recessions. They propose that the effects of changes in firms' R&D and adv...

From the supplier firm's perspective, a referral is a recommendation from A (the referrer) to B (the potential customer) that B should, or should not, purchase from C (the supplier firm). Thus, as referrals are for a specific supplier firm, they should be viewed as part of the supplier firm's marketing and sales activities. We recognize three types...

An attractive feature of Prediction Markets (PMs) is that they provide economic incentives for informants to share unique information. It is unclear whether PMs are appropriate for applications with few knowledgeable informants as is the case for most institutional forecasting tasks. Hence, we compare the performance of small PMs with traditional j...

A key challenge facing business marketers surrounds developing a deeper understanding of customer needs. We conceptualize that challenge as having three dimensions: calculating, creating, and claiming value. We discuss key problems, new developments and research challenges in each of these three domains and note the desirability for a deeper collab...

I suggest that a solution to Reibstein et al. (2009) diagnosis that Academic Marketing is losing its way is to seek creative connections with marketing intermediaries (consultancies and market research firms) that can provide access both to problems and to data. That access should help the field find its way back to the path that leads to rigorous...

Recessions provide challenges to managers seeking to develop and justify an appropriate level of market-facing activity. The literature on the topic offers limited guidance on what strategy is most appropriate. We briefly review the literature on the topic and report on recent results that show (a) that R&D spending by B2BGoods firms and B2BService...

Model-based decision support systems (DSS) improve performance in many contexts that are data-rich, uncertain, and require repetitive decisions. But such DSS are often not designed to help users understand and internalize the underlying factors driving DSS recommendations. Users then feel uncertain about DSS recommendations, leading them to possibl...

Ecrit par des experts reconnus, Market dresse un panorama complet des études et méthodes des recherches en marketing, à travers 5 grands axes qui façonnent la " maison de la recherche " : Concevoir : problématiques marketing et méthodologie de la recherche ; Comprendre : approches non directives, méthodes interprétatives, approches cognitives, méth...

We introduce the work of the finalists in the 2006 ISMS Practice Prize Competition, representing outstanding examples of rigor plus relevance in our profession. The winner, describing a collaboration between J.D. Power and Associates and U.C. Riverside, involves a sequenced program of research to understand the effect of promotional activity in the...

Purpose: To analyze the objectives of trade show participants and to link those objectives to trade show formation and diversity.Methodology/Approach: We conduct an exploratory analysis of trade show formation and diversity and link them to the differences in several seller and buyer interests across industries. We used data collected from a single...

With the growth and evolution of the Internet, electronic peer-to-peer referrals have become an important phenomenon, and marketers have tried to exploit their potential through viral marketing campaigns. At the same time, spam and e-mail-based viruses have cluttered electronic communications, making viral marketing campaigns problematic and challe...

With university rankings gaining both in popularity and influence, university administrators develop strategies to improve their rankings. To better understand this competition for ranking, we present an adjacent category logit model to address the localized nature of ranking competition and include lagged rank as an independent variable to account...

High tech firms can mitigate potential risks by diversifying their product–market portfolios. A key research question is how such diversification influences firm survival. A firm exits the market in two ways, specifically, dissolution and acquisition. Here, we model how the diversity of a new firm's product–market portfolio influences the times to...

n their purchase decisions, online customers seek to improve decision quality while limiting search efforts. In practice, many merchants have understood the importance of helping customers in the decision-making pro- cess and provide online decision aids to their visitors. In this paper, we show how preference models which are common in conjoint an...

Railroad companies face a difficult problem in assigning empty freight cars based on customer demand because these assignments depend on a variety of factors; these include the location of available empty cars, the urgency of the demand, and the possibilities ...

Other chapters in this book have demonstrated the wide range of marketing problems and the various analytic approaches implemented in decision models to address those problems. We will elaborate on some of those applications, but our main focus here is on how to make those models relevant and useful in practice. We take the perspective that the gla...

As traditional sources of competitive advantage shrink, firms seek new ones. One such source is product design. To generate insights on how product design can be leveraged to realize competitive advantage, we introduce an integrated, customer-experience perspective of product design that we call the Total Design Concept (TDC). We define a product's...

International entries into transition economies occur infrequently and involve considerable uncertainty. This raises the question whether managers, who have limited own experience, take their competitors' prior decisions into account when deciding on their own entry timing and size and whether there is value in doing so. To address these questions,...

Consumers often have to evaluate products comprising a combination of attributes that is not expected by them, given their beliefs about how attributes normally co-vary in the product category. Such an attribute combination implies that the claimed level of a product attribute is then different from what the consumer might infer, given the level of...

We report on the finalists from the 2005 Informs Society for Marketing Science (ISMS) Practice Prize Competition, representing the best examples of rigor plus relevance that our profession produces.

This paper reports on the results of the MIT Energy Laboratory Sun Day PV study. This study continued our assessment of likely market response to photovoltaics. The Sun Day exhibit attracted a high proportion of solar inno- vators. The study determined that the key issues relating to PV preference are - economical and ecological soundness - co...

Diffusion models, mathematical attempts to describe the growth patterns of new products and relate them to variables such as price and population characteristics, have seen major development trends in the past few years. This paper reviews that progress in order to isolate those areas most likely to be fruitful for further development. The paper fi...

Marketing managers often provide much poorer evaluations of model-based marketing decision support systems (MDSSs) than are warranted by the objective performance of those systems. We show that a reason for this discrepant evaluation may be that MDSSs are often not designed to help users understand and internalize the underlying factors driving the...

We study the performance of Virtual Stock Markets (VSMs) in an institutional forecasting environment. We compare VSMs to the Combined Judgmental Forecast (CJF) and the Key Informant (KI) approach. We find that VSMs can be effectively applied in an environment with a small number of knowledgeable informants, i.e., in thin markets. Our results show t...

The community-based model for software development in open source environments is becoming a viable alternative to traditional firm-based models. To better understand the workings of open source environments, we examine the effects of network embeddedness — or the nature of the relationship among projects and developers — on the success of open sou...

In many product categories, technological evolution results in the emergence of a single product design that achieves market dominance. In this article, the authors examine two questions: Will a dominant design emerge in a new product category? and If it does, how long will it be before a dominant design emerges? Thus, the authors simultaneously mo...

Prepared for the United States Dept. of Energy under Contract no. EX-76-A-01-2295, Task order 37.

The background, development, and calibration of a model of innovation-diffusion, designed to help allocate government field test and demonstration resources in support of a photovoltaic technology across sectors, regions, and over time are reviewed. Current work in the area of diffusion and substitution models, and a brief review of current theory...

A well designed decision support system (DSS) of high objective quality may still not be used. There is often a large gap between the objective quality of DSSs and their subjective evaluations, often because DSSs are designed to help decision-makers make better decisions, without necessarily helping them understand why. A large gap between a manage...

Model-based decision support systems (DSSs), designed to help decision-makers make better decisions, often do not help decision makers understand either how or why they work. As a result, there is likely to be a large gap between a manager’s mental model and the decision model embedded in the DSS. We suggest that this gap is an important reason f...

Colleges and universities in the United States increasingly are turning to merit aid offers as a competitive tool to attract better students. Although the total amount of merit aid offered has increased recently, universities vary dramatically in the amount they use to attract top candidates. Intuitively, better (and wealthier) universities, who ha...

In many product categories, technological evolution results in the emergence of a single product design that achieves market dominance. In this paper, we examine two questions: will a dominant design emerge in a new product category? If it does, how long will it be before a dominant design emerges? Thus, we simultaneously model the probability of e...

Les techniques traditionnelles de génération d'idées, fondées sur les contributions de clients, consistent généralement à collecter de l'information sur des besoins en nouveaux produits à partir d'un ensemble de clients typiques ou alors choisis de façon aléatoire. L'approche faisant appel aux « utilisateurs pionniers » s'en démarque. Elle consiste...

Recessions can severely affect the performance of firms, and even their very survival. However, all firms are not equally affected by a recession. Some firms view recessions as opportunities to strengthen their businesses, invest aggressively and establish their advantage over their weaker competitors, whereas others cut back, waiting for the reces...

We study the process by which model-based decision support systems (DSSs) influence managerial decision making in the context of marketing budgeting and resource allocation. We focus on identifying whether and how DSSs influence the decision process (e.g., cognitive effort deployed, discussion quality, and decision alternatives considered) and, as...

In 2003 the INFORMS Society for Marketing Science (ISMS) introduce and conducted its inaugural Practice Prize Competition. The reports and papers that follow are the finalists from that competition, representing the best examples of rigor plus relevance that our profession produces.

ISMS Practice Prize Competition Chairman Gary L. Lilien: "Special Section Introduction by the ISMS Practice Prize Competition Chairman"Finalists Joseph A. Foster, Peter N. Golder, Gerard J. Tellis: "Predicting Sales Takeoff for Whirlpool's New Personal Valet"John H. Roberts, Pamela D. Morrison, Charles J. Nelson: "Implementing a Prelaunch Diffusion...

Network externalities are playing an increasingly important role in the economy, and they have significant implica- tions for firms' marketing strategies. The authors study the effects of network externalities in conjunction with other product and firm characteristics on the survival of pioneers. They apply an accelerated failure time model to data...

Organizational research frequently involves seeking judgmental response data from informants within organizations. This article discusses why using multiple informants improves the quality of response data and thereby the validity of research findings. The authors show that when there are multiple informants who disagree, responses aggregated with...

Traditional idea generation techniques based on customer input usually collect information on new product needs from a random or typical set of customers. The "lead user process" takes a different approach. It collects information about both needs and solutions from users at the leading edges of the target market, as well as from users in other mar...

Using the resource-based view of the firm, the authors hypothesize that differences in adoption of radical tech- noloqies among firms can be attributed to a sense-and-respond capability of firms with respect to new technolo- gies;which is termed technological opportunism. Using survey data from senior managers in business-to-business firms. the aut...

New developments in marketing management support systems (MMSSs) have provided the marketer with a growing supply of tools that can enrich decision making. In this paper, we describe the concept of marketing engineering — an approach to solving marketing decision problems — popularized by Lilien and Rangaswamy [Lilien GL,Rangaswamy A. Marketing eng...

We develop a competitive advertising model, where a firm's advertising spending can be divided into two parts. One part, which we call generic advertising, affects only total market demand. The second component of that spending, brand advertising, affects market share directly, but may also have an effect on total market demand. We investigate how...

We study how and why model-based Decision Support Systems (DSSs) influence managerial decision making, in the context of marketing budgeting and resource allocation. We consider several questions: (1) What does it mean for a DSS to be "good?"; (2) What is the relationship between an anchor or reference condition, DSS-supported recommendation and de...

This paper shows that Medical Innovation (Coleman, Katz and Menzel 1966) and several subsequent studies analyzing the diffusion of the drug tetracycline have confounded social contagion with marketing effects. First, we describe the medical community's understanding of tetracycline and how the drug was marketed at the time the Medical Innovation da...

Over 25 years, we have developed many sales-force and modeling insights through over 2,000 projects with several hundred selling organizations in over 50 countries. Content insights are useful in making sales-force decisions. Examples are that profitability ...

This article shows that Medical Innovation—the landmark study by Coleman, Katz, and Menzel—and several subsequent studies analyzing the diffusion of the drug tetracycline have confounded social contagion with marketing effects. The article describes the medical community's understanding of tetracycline and how the drug was marketed. This situationa...

Leeflang and Wittink [Internat. J. Res. Marketing 17 (2000) 105] sketch a future for marketing modeling that differs primarily in scale and scope from today's environment. We have a different vision: the digital networked economy will induce significant structural changes in (a) how models are developed and deployed, (b) who uses marketing models,...

Markets involve the exchange of information and products between buyers and sellers in marketplaces created by market organizers. This paper develops a theory to explain the differences in the size (number of participants) and diversity (range of products displayed) across these marketplaces. We assume that successful transactions require informati...

It is a popular contention that products launched today diffuse faster than products launched in the past. However, the evidence of diffusion acceleration is both scant and mixed. Moreover, the methodology used in previous studies has a number of disadvantages. This study re-assesses the acceleration thesis in a single country (U.S.) for 37 consume...

This paper shows how two different theoretical approaches to model innovation adoption, network threshold modeling and random utility modeling, both result in discrete-time hazard models, a popular statistical modeling approach to study innovation adoption and diffusion. The paper emphasizes the need for careful situational analysis prior to model...

We show how one can specify micro-level hazard models of adoption that separately represent the awareness and evaluation/choice stage of the adoption decision process even when one observes only the final outcome, i.e. adoption or not. These models can be derived from random utility theory. Using a small simulation study, we show that the two-stage...

Abstract Inthis paper we review managerial applications of diffusion models in marketing. We first develop definitions for the basic Bass model and some of its key extensions. Following this, we briefly review a number of applications from which we draw some lessons on building and using diffusion models for predictive and normative applications. W...

Organizational research frequently involves seeking judgmental data from multiple informants within organizations. Researchers are often faced with determining how many informants to survey, who those informants should be and (if more than one) how best to aggregate responses when disagreement exists between those responses. Using both recall and f...