MBAs hit Vermont slopes with skis and laptops to give classroom concept real world test

Cambridge, Mass., December 13, 2001 — Lots of students take to the snowy slopes during school semester break, but when 25 MIT Sloan School MBAs head to Vermont for a week in January, they'll be giving a whole new definition to apres-ski activities.

While the students will get in a lot of slope time, they will also be using their stay to further test a web-based marketing technique called the Virtual Customer Initiative (VCI) developed at Sloan that could revolutionize the way companies pinpoint consumer preferences.

Sloan faculty and students have already proven the effectiveness of VCI, which combines complex computer calculations, multimedia tools and web interactivity to collect customer feedback in a way that is faster, more reliable and significantly less expensive than traditional market research tools.

For example, a Sloan team last year used VCI to survey several hundred people about their preferences among eight new vehicles that were about to come on line in a particular market niche. VCI's powerful combination of web and computer proved to be right on the mark: those vehicles that VCI research indicated would succeed or fail did in fact succeed or fail.

During MIT Sloan's independent activity period in January, 25 students will pack wireless computers along with their ski gear to give VCI a different kind of test, called Securities Trading of Concepts (STOC). The students will spend their evenings engaging in a form of stock trading. But instead of companies, the students will trade in fully integrated concepts and ski resort attributes to help measure what customers want. Such information can then be used by ski resorts anxious to respond to such consumer preferences.

Among the attributes “traded” by the students on a specially-built, portable, trading network based on wireless technology are the cost of skiing at a particular resort, snow conditions, crowded slopes, the relative availability of expert trails and nightlife.

The graduate students will “trade” these attributes in their specially equipped classroom in MIT-owned Talbott House, which normally functions as a ski lodge near the Killington mountain resort complex. Prices on the STOC exchange will determine which attributes “win” in the marketplace of ideas. But to make the weeklong exercise for which students get academic credit a more complete test of STOC's accuracy and effectiveness, students will use their time on the slopes to directly interview skiers, using traditional market research testing the same set of concepts and ski resort attributes. Between downhill runs, each student will interview a half dozen or so people in ski gondolas and lodges during the day. Then, in the evening, the more traditional forms of market research will be compared to the outcomes predicted by the STOC game methods, which was developed by MIT Sloan Finance Prof. Andrew Lo, Marketing Prof. Ely Dahan, Brain and Cognitive Science Prof. Tomaso Poggio and their graduate students.

“At first blush, this may seem like a just a great vacation for the students,” said Dahan, who is now in his third year of using the weeklong break to offer a course at Talbott House. “And it is fun. But more importantly, there is a serious learning aspect. Students apply theory and learn to execute several innovative market research methods all in real time.”

Indeed, the course has proved so popular that it now has a long waiting list even though it costs students extra to participate.

In addition to using VCI to pinpoint what determines customer decisions in selecting a particular ski slope, Dahan's class will also use VCI to measure what customers look for in the vehicles, mainly all-wheel drive SUVs, that get them to the slopes.

“From a marketing point of view, you not only want to identify the winning ideas, but also why they are winners,” said Dahan. “Our research and experience to date indicate that VCI is proving to be remarkably accurate. We come up with results that closely predict actual consumer decisions.”

So if a nearby ski resort all of a sudden starts limiting trails to experts only, or reduces daytime crowds, or cuts prices, the reason may be a complex mix of computer and web technologies known as VCI. And a group of MIT Sloan skiers who combined a good time with some hard research.

More information on the Virtual Customer Initiative.

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MIT Sloan Professor Emeritus Jay Forrester invented the field of system dynamics and is still a major force in its development.

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