Thursday, August 1, 2013
Professor of Marketing Makes Sense of Consumer Behaviors [UTDallas News]
Aug. 1, 2013
Dr. Dmitri Kuksov
Which designer purse will become the next “it” bag?
Many have concluded that fashion hits such as Hermes’ famous Birkin bag are random and impossible to predict.
New research by Dr. Dmitri Kuksov, professor of marketing in the Naveen Jindal School of Management, concludes that the randomness is no accident.
Dmitri Kuksov and his co-author Kangkang Wang, who is currently a professor at the University of Alberta, challenge prevailing notions about how products rise to must-have status in their article, “A Model of the 'It' Products in Fashion.” The article appeared in the journal MarketingScience earlier this year.
The article explores the “it” bag phenomenon, in which purses by Fendi, Prada, Dior and other designers have become the must-have bags in various years. The authors quote observations that fashion hits are the results of “dumb luck.”
Kuksov, who joined the UT Dallas faculty last year, said the standard explanation is often that success is random because nobody can predict which manufacturer will create the best product.
His research agrees that the selection of a fashion hit is random. But, he said the unpredictability comes by design.
Fashion editors, bloggers and celebrities play a role in determining fashion’s must-have products, the study found. These influential “consumer coordinators,” as the study calls them, make the process unpredictable.
“What we say in contrast is that randomness is due to the explicit strategy by the editors and other consumer coordinators,” Kuksov said. To illustrate his point, his article begins with a quote from William Shakespeare’s Hamlet:“Though this be madness, yet there is method in’t.”
To maximize the probability that a product becomes a fashion hit, the price must be right. Kuksov said high-end consumers prefer prices to be out of reach to lower-end consumers. But he said his research made a surprising finding that pricing lower-end customers out of the market is not optimal for generating maximum profits in a competitive market. Kuksov’s study found that the best price is one that also generates sales among the lower-end consumers.
Dr. Hasan Pirkul, Jindal School dean and Caruth Chair of Management, said that Kuksov brings a strong quantitative marketing research background to UT Dallas.
“Dr. Kuksov brings a unique perspective to his research with his expertise in both marketing and mathematics,” Pirkul said. “His research on fashion’s “it” products is an example of his important contributions to our understanding of the status goods market.”
Kuksov joined UT Dallas after teaching at Washington University in St. Louis. He earned a PhD in marketing from The University of California, Berkeley and a PhD in mathematics from Brigham Young University. Kuksov, who enjoys science fiction and movies, earned his bachelor’s degree in math from Moscow State University.
He said one of the reasons he was drawn to UT Dallas was because of its focus on quantitative research and engineering and its quest to become a Tier One university.
“UT Dallas is fast-growing and improving in all dimensions,” he said.
[Reposted article from utdallas.edu site [here]]