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Customer portfolio composition and customer equity feedback effects: Student diversity and acquisition in educational communities

Abstract

Researchers in marketing have long recognized that current populations of customers can influence the behavior of prospective customers. This paper draws on existing marketing theories to empirically examine how changes in student body demographic segments influence future demand for MBA programs. Using a longitudinal analysis of data spanning 18 years, we find that higher proportion of female students leads to significant increases in future applications. This implies a marketing rationale for business schools in encouraging gender diversity. In contrast, we find evidence of prejudice towards minority and international students among business school applicants. We discuss the results of the analysis in the context of the current affirmative action debate and changes in demographic trends.

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Notes

  1. 1.

    We thank the anonymous reviewers for pointing out this possibility.

  2. 2.

    We contacted MBA admission offices to ask whether they use any objective affirmative action in their admission decisions, but every school declined to answer this question.

  3. 3.

    It is worth noting that we find significant positive correlations between group percentage and lagged percentage of that group. The correlation for women is 0.63, for minorities it is 0.37 and for International students it is 0.77. These results are consistent with the idea that students are attracted to programs with more students of similar background. However, given the lack of data on applicant demographics we cannot state with certainty that this is the case.

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Correspondence to Michael Lewis.

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All authors contributed equally to the work.

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Lewis, M., Mitra, D. & Yoon, Y. Customer portfolio composition and customer equity feedback effects: Student diversity and acquisition in educational communities. Mark Lett 24, 71–84 (2013). https://doi.org/10.1007/s11002-012-9204-3

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Keywords

  • Customer equity
  • Student diversity