Michael I. Norton is the Harold M. Brierley Professor of Business Administration in the Marketing Unit at Harvard Business School (HBS) and the faculty chair of the HBS Executive Education program, Strategic Marketing Management. In this interview, Professor Norton reflects on how the program uses behavioral insights to help executives design marketing that appeals to the psychology of consumers.
I'm a social psychologist by training, so I tend to study the unusual psychology of consumer behavior—that is, how consumers choose to spend their time and money and the curious decisions that they sometimes make.
For example, when people make items themselves, they tend to overvalue them. We call it "the IKEA effect." When people make a mug in a pottery class, they think it's amazing and will pay anything to hold on to it. There's nothing wrong paying for things we love, but it turns out that people also think that others will share their inflated view.
My research focuses on ensuring that people buy products and services that actually make them happy in their lives. Marketers want consumers to be delighted with our products and brands, but it is also critical to structure offerings such that consumers are using their money in ways that truly satisfy them.
In this program, we include cases centered on creating and capturing value through products and services—value that goes beyond "this is good toilet paper." We want customers to use and like products, but also to love the full experience of them.
We deliberately structure the program to work for two constituencies. For people experienced in marketing, the program offers new lenses for creating more effective and more cutting-edge marketing. The goal is for these participants to leave with new ideas for what they're going to do next. For executives with less experience in marketing, the program provides tools and frameworks that give them a leg up when they go back to their organizations.
All executives at HBS, including those in this program, learn from one another's experiences. Business problems tend to repeat themselves, and executives face similar issues. So when we talk about a case with a particular company facing a particular obstacle, we want our participants to talk about their own experiences—what they tried, what worked, and what didn't work. That way, everyone benefits from the collective knowledge of the class. We find that sharing your approach to business challenges is very helpful for other participants.
On the first full day of the program, we focus on segmentation, targeting, and positioning, which is fundamental to everything that we do in the program and in marketing. It sounds simple: You segment the market, target a specific customer, and position your product or service to that customer. But it turns out that many executives have not done this systematically – and find it very hard to do when we ask them! Even though they've been successful and have been selling to customers for a long time, they haven't carefully thought through those steps. We walk participants through that process, to think more deeply about the assumptions underlying the most basic aspects of marketing, before we move to the rest of the week.
We try to bring together a mix of senior and junior faculty, with the goal of including very different perspectives on marketing. Participants learn from one of the most experienced case study teachers in the world who has a unique perspective on marketing functions, and from more junior faculty who have specific expertise in highly relevant topics like pricing in digital domains. In short, the program features faculty with research and knowledge from across the entire marketing spectrum, from digital marketing and sales management to pricing and branding.
Having taught at other schools, I can safely say that the level of engagement and activity in an HBS case study discussion is extraordinarily and uniquely high. By design, the case method incites more discussion and debate among participants, which is an enormous advantage. In addition, we sequence the program through the week so that problems change and solutions become harder to find, requiring participants to use and build on the knowledge gained each day.
I mentioned that case study discussions are engaging for participants, but they're also just as engaging for faculty. They challenge us to stay on our toes and on top of what's happening in the world. We frequently have participants in the class who have spent 40 years working in a specific domain or industry. It's exciting to be a professor in that situation because you never know what participants are going to say or what opinions they'll have.
Some instructors don't like that kind of unpredictability. But HBS selects faculty who embrace and enjoy the idea that every class is going to be completely different. And I'm one of them.
