Master of marketing

Ambar Rao bridges gulf between theory and practice with 'amazing relevance' of his research

Most people look at coupon dispensers in the grocery store and see only instant coupons. But Ambar Rao, the Fossett Distinguished Professor of Marketing at the John M. Olin School of Business, sees another dimension. To him, the coupons are not only something he can use himself, especially if it's for a favorite hot sauce, but an opportunity for a marketing research study.

He wondered what users of these coupons -- these surprise bonuses -- actually did with the money saved. Did they pocket it? Or did the user reward himself by buying a treat that cost more than the coupon? In other words, do unexpected coupons increase impulse buying? And that's what he and a business school colleague are researching now.

Such practicality is an admirable hallmark of Rao's research, according to Dipankar Chakravarti, a former colleague at the University of Arizona and now dean of the University of Colorado business school. "Ambar is a fabulous researcher who has that rare ability to bridge analytical, quantitative theories in management with practitioners in the real world," he said. "His research is extremely sound and rigorous, and, at the same time, it has amazing relevance." Chakravarti, who hired Rao as the first Coca-Cola Professor of Marketing at the University of Arizona, said, "You folks are very lucky. I wish we could get him here."

Ambar Rao, the Fossett Distinguished Professor of Marketing, has a keen eye for instant coupons, which figure in his professional research and in his personal grocery shopping, especially if they're for items he can use in his fiery cuisine.

Given Rao's estimation of the business school, there's little chance of that happening. "I like Olin," he said. "It's moving and changing, and the place has direction and momentum, and I can participate in the change. I would like Olin to be recognized as one of the top institutions of its kind, and it, along with our marketing area, which has some fine young faculty, will continue to develop a national presence. Olin has the resources to match the dream."

Rao, who grew up in Delhi where his father was a government official, took a long route before moving to St. Louis and his present position last year. He attended Catholic schools, as do most middle-class Indians, because, as he said, "They emphasize good standards, a disciplined environment and good English skills." As most boys in India who were good in math did in the 1950s, he studied engineering, attending the Indian Institute of Technology near Calcutta, some 800 miles away. After receiving a bachelor of technology degree in mechanical engineering, he began working for an auto manufacturing company in Bombay. He designed jigs and fixtures used in the manufacturing process.

Leaving engineering

Then he went to London as part of a scholarship/work program the English Electric Co. offered to Indians. Designing electrical equipment, such as turbines and switches, he learned about production technology. "I also learned that I liked math and physics, but I didn't like engineering," he said. "I knew that wasn't how I wanted to spend my life."

Luckily, it was at this time that operations research was just beginning. "Some friends said I'd like it," Rao said, and ultimately that's what he came to study at Case Western Reserve University in Cleveland. "That's where I met Russ Ackoff, a very charismatic scholar," he said, "and that's where I really enjoyed work for the first time."

After Rao received a master of science degree there, he followed Ackoff to a top business school -- the Wharton School at the University of Pennsylvania, from which he received a doctoral degree. During his studies there, he became captivated by marketing problems.

"Marketing is so attractive," Rao said. "It combines the excitement of the creative process and the intellectual process. That's why I say marketing equals romance plus finance. The romance part is positioning the product, making people want to buy it; and the finance part comes in because you must be able to make money by selling it."

That's what he tells MBA students in the marketing core and brand management courses he teaches, and he said the better students are good at both the romance and finance of marketing. "Sometimes the hard-number types are afraid of free thinking -- letting their imagination take over," he said, "and, more commonly, the creative types are afraid of numbers." (That fear, though, is becoming less common, he said, because children grow up learning to play computer games, making the transition to things such as spread sheets more comfortable.)

Rao gets high marks as a teacher. "He's a very engaging professor," said Neha Gandhi, a second-year MBA student. "He stimulates thought and new ideas, and he doesn't stifle creativity." He also likes to use topical case studies, studying such things as car and liquor brands, an approach that helps keep class interesting, Gandhi said. (Of cars and liquor, Rao observed: "I figure these are two subjects students know something about.")

Gandhi also said Rao was the first professor at Olin to use peer evaluation, in which each student grades members of his or her own team at the end of the course. "This lessens the amount of free-ridership," she said.

Teaching marketing management to physicians and other health care professionals in the Executive MBA in Health Services Management program, something that Rao will do again in December, is a special challenge. "They're a difficult audience," he said, "because doctors, as scientists, want tons of supporting data before they make a decision. But in marketing timing is very important, and sometimes you have to make assumptions and make a decision."

"Of course," he added wryly, "I don't want them to change their method when they're treating patients, especially me, but I do want them to change the way they make business decisions."

Rao's previous faculty appointments, in addition to his tenure at the University of Arizona in Tucson, were at the University of Toronto and at New York University. "I like urban areas," he said, "and I'm a serious Mets fan. New York was the city where I had always wanted to be, and that's where my children grew up." His daughter is a pastry chef in a just-opened restaurant in New York City, and his son is there, too, as an information technology consultant for PricewaterhouseCoopers.

Coming to St. Louis

It was about 10 years ago, he said, that he first became aware of Washington University. "An article in The New York Times described Washington U.'s undergraduate business program," he said, "and that's when the school hit my radar screen." He also knew faculty member Chakravarthi Narasimhan, the Philip L. Siteman Professor of Marketing, who also attended the Indian Institute of Technology, but in Madras.

Rao seems pleased with St. Louis as his new home. A lover of classical music, he thinks the St. Louis Symphony is one of the best in the country, and he appreciates its accessibility. "It's great," he observed, "that I don't have to plan ahead six months to get a ticket." His only complaint? "Too few Indian and Chinese restaurants."

Rao's colleagues are pleased he's here, too. As Jeroen Swinkels, the August A. Busch Jr. Distinguished Professor of Managerial Economics and Strategy, said: "Ambar's wide-ranging interests make him a valued resource for every aspect of marketing, ranging from strategy and economics to operations research. His skill across disciplinary lines is critical for a school of Olin's relatively small size, and his energy in providing leadership to the school has been exemplary. Besides, he's simply a fun colleague to have around."