January 10, 2005

McIntire Assistant Professor Carrie Heilman integrates both the art and science of marketing in her research. When she graduated with a degree in mathematics from the College of the Holy Cross, she decided pure math was too dry for her tastes to pursue for graduate studies. Instead, Heilman applied her quantitative skills to a Ph.D. management program at Purdue University, where she took a marketing seminar and became interested in the real-life marketing problems that have driven her research ever since. “The problems that people work on in marketing are ones that most people can relate to in their everyday experiences,” says Heilman. “In fact, many of my research ideas have come to me while doing my own shopping. That makes it interesting not only to me as a researcher and to business practitioners, but also to my students, who can relate to the problems I am working on at the time.”

Imagination Takes Over

One of Heilman’s research associates, Washington University Professor Ambar Rao, who gravitated to marketing from a math and physics background, shares Heilman’s research approach, one that is analytically sound and rigorous (i.e., the science), yet is free-thinking enough to have relevance for real-world applications (i.e., the art).

Together, Heilman and Rao, along with Virginia Tech Professor Kent Nakamoto, were motivated to find out what happens when grocery shoppers are given in-store coupons. Their research project yielded some intriguing results. “We found that ‘surprise’ coupons, ones that you get in the store that you don’t expect, led shoppers to buy luxury or treat items that were not on their shopping list,” Heilman says. “Shoppers with a $1 coupon spent $7.68 more in unplanned purchases than did the control group. That has relevance for the retailer, who could boost its sales by issuing coupons, even without the usual manufacturer support. “Shoppers with a surprise coupon also bought more items that they associated with the couponed product as well as items shelved close by.” Why do shoppers who receive a surprise coupon spend more than they originally budgeted? Heilman and her research colleagues have several possible explanations. One can be described as an unexpected psychological income effect, that extra dollar “burning a hole in their pockets.” An alterative explanation is that the coupon savings increase spending by elevating the shopper's mood, a phenomenon noted in other studies as well. Heilman suggests additional research to determine whether surprise coupons trigger the income effect, the mood phenomenon, or both. "Either way, our findings are important for both retailers and manufacturers," she says.

Exploring New and Important Territory in the Pharmaceutical Industry

Heilman conducted another study in the controversial area of direct-to-consumer pharmaceutical advertising — advertising used to market drugs to the general public. The findings suggest that advertising seems to help some people remember to take their medications, but for others, advertising lowers compliance. One explanation for this result may be that DTC advertising prompts consumers who are marginally ill to request a drug, and then they fail to take it regularly either because they feel better quickly or perhaps do not really need the medication.

The results of noncompliant behavior may be harmful for the patient whose health and even life are endangered, for the doctor whose reputation is damaged, and for the pharmaceutical companies, which sustain losses in revenues of $15 to $20 billion per year. To address this problem, Heilman and her colleagues suggest that marketers should segment the market to identify consumers who are most likely to respond favorably to DTC advertising and then target their advertisements at those consumers only.

Perhaps most useful for decision makers in pharmaceutical companies is Heilman's conclusion that reducing dosages could increase compliance more effectively than increasing advertising expenditures. Taking a pill once a day is easier to remember than taking several pills daily. "Our findings suggest that in certain cases reducing the daily dosage to increase compliance is more profitable for pharmaceutical managers," says Heilman.

"Our research also looked at how compliance changes over time, something no other research has studied," says Heilman. "People are most compliant right after they leave the doctor's office and right before they go back to the doctor. That means it's the time in between visits when doctors and pharmaceutical companies need to be proactive in reminding people to take their drugs."

Getting the Word Out

So how does a researcher like Heilman get her findings that have impact outside academia to the manufacturing, retailing, and pharmaceutical practitioners?

"The pharmaceutical findings were easier to get publicized in the media because noncompliance is such an important problem right now," says Heilman. "The data provider for whom we conducted the research also disseminated the information to many of its clients."

"I have a sense, based on my presentations at academic conferences over the last seven years, that practitioners are attending more and more traditionally academic conferences as professors focus more on problems that are truly of interest to practitioners," she says.

There are also serendipitous ways research finds its way outside academia. "MeadWestvaco Corp. Vice President Tom Grinnan (A&S '90) was a guest speaker in my brand management class," says Heilman. "As we talked before he came to my class, I found out that he works on developing packaging for pharmaceutical companies to increase compliance. We've been able to correspond since then. Just something coincidental like that I hope will lead to future research and more exposure."