An expert in quantitative analysis of marketing strategies, Salma Karray, PhD, uses advanced marketing mix modelling and data analytics techniques to help businesses improve their performance and strive in today’s fiercely competitive environment. Marketing Lead and Associate Professor in the Faculty of Business and Information Technology at the University of Ontario Institute of Technology (UOIT), Dr. Karray teaches her students to develop rigorous marketing strategies that rely on science rather than solely on intuition to improve business outcomes. She develops advanced mathematical models to determine the best strategies for pricing, promotion, distribution and advertising.
In today’s reeling marketplace, she is also researching co-operation strategies such as agreements between companies who may be competing and collaborating simultaneously. In this field, she has researched the implications of joint/co-operative promotional initiatives and distribution agreements between national brands’ manufacturers and private labels offered by retailers.
Dr. Karray’s latest research uses data analytics to examine the return on investment of marketing decisions for movies. In a recent publication, she illustrates how trailer advertising can signal the movie’s success for investors by quantifying the effects of trailers’ design on the stock market valuation of movies. Her research also explores how movie studios can make better promotional decisions through the use of tie-ins with other companies.
Dr. Karray has received several awards from the National Sciences and Research Council of Canada (NSERC), and from Mitacs to enhance student research opportunities globally. She obtained her Bachelor of Commerce in Marketing from IHEC in Tunisia in 1998, and earned her Master of Science in Marketing, and her Doctorate in Administrative Studies from HEC Montréal in 2001 and 2005, respectively. Dr. Karray first taught as an instructor in the Marketing department at HEC Montréal during her studies, and joined UOIT as an assistant professor in 2004. She was named associate professor in 2009, and has been serving on many academic and faculty committees. Appointed Adjunct Professor at the University of Waterloo and Ryerson University, Dr. Karray works with graduate and undergraduate students on researching problems related to quantitative analysis of marketing strategies.
Industry Expertise (4)
Areas of Expertise (9)
Marketing Decision Models
Marketing Mix Effectiveness
HEC Montréal: PhD, Marketing 2005
HEC Montréal: MSc, Marketing 2001
IHEC, Tunisia: BCOM, Marketing 1998
- Marketing Science Institute
- American Marketing Association
- Canadian Operations Research Society
- The Institute for Operations Research and the Management Sciences
- The Association of European Operational Research Societies
Media Appearances (3)
Mattresses by mail? Canadian startup joins the memory-foam party
The Globe and Mail, Report on Business print
University of Ontario Institute of Technology Marketing researcher Dr. Salma Karray recently provided her insight on how to convince more consumers to buy a mattress online when they’re used to shopping in-store. In the article, she advises Canadian online startup Endy Sleep to put some more work into defining exactly what value it offers consumers – whether that’s price, quality or some other advantage. This will help them identify the consumer group they want to target.
Target leaving Canada
Oshawa Express online
American big box retailer Target, which made the move to Canada with much fanfare in 2012, will be closing all of its Canadian stores this year. In the article, Dr. Salma Karray, associate professor at the University of Ontario Institute of Technology states, Target failed to meet the high standard that Canadians had set for it. “There was much anticipation from Canadian consumers about Target, but in the end, the company ran into ferocious competition and failed to meet the demands of the Canadian market."
Logging on and checking out: the growth of online shopping in Canada
“Online shopping has been increasing a lot over the last five years; every year there are more and more people shopping online, especially during the holiday season,” said Dr. Salma Karray, a professor of marketing at UOIT who studies distribution channels, including online shopping. She points out that the trend has had a major impact in some industries including bookstores, record stores and travel agents. “We have seen over the years the book industry, book retailers have completely changed the way they do business,” said Dr. Karray. “Amazon basically has taken business from Chapters Indigo, from a lot of big bookstores.”
Event Appearances (4)
Cooperative Promotions in the Distribution Channel
Canadian Operational Research Society/Institute for Operations Research and the Management Sciences International Conference Montreal, Quebec
Cooperative Promotions in the Distribution Channel
Production and Operations Management (POMS) 26th Annual Conference Special Session (Economics Models of Operations) Washington, DC
A Game-Theoretic Model for Co-promotions: Choosing a Complementary Versus an Independent Product Ally
POMS 26th Annual Conference Washington, DC
Cooperative Advertising in a Supply Chain with Retail Competition
American Marketing Association 2014 Summer Marketing Educators Conference San Francisco, California
Research Grants (2)
Game-Theoretic Models for Competitive Supply Chains
NSERC Discovery Grant $100000
4/1/2015-4/1/2020. PI. Karray, S. This research project continues to explore complex mathematical models and techniques to determine optimal marketing strategies for manufacturers and retailers in a distribution channel.
Applications of Game Theory to Competitive Interactions in Channels
NSERC Discovery Grant $100000
4/1/2007-4/1/2014. PI. Karray, S. This research project explores complex mathematical models and techniques to determine optimal marketing strategies for manufacturers and retailers in a distribution channel.
Abstract: The effectiveness of cooperative advertising programs is studied in a market where two competing manufacturers deal with an exclusive retailer and two products. Two two-stage game theoretic models are developed to analyze the long-term effects of retailer's promotions, which can be positive or negative, on the effectiveness of cooperative advertising. Closed-form equilibrium solutions are obtained and compared. We find that the level of product substitutability and the sign and magnitude of the long-term effects of retailer's promotions on sales determine whether cooperative advertising should be offered and accepted by the manufacturers and retailer. In particular, depending on the level of product substitutability, cooperative advertising can benefit both the manufacturers and retailer even when retailer's promotions negatively affect future sales. Conversely, it may not be in the interest of the manufacturers to offer cooperative advertising when the products are fairly undifferentiated regardless of the nature of the long-term effects of promotions. Finally, the manufacturers and retailer may refuse to respectively offer or participate in cooperative advertising programs that enhance total channel profits.
Abstract: Joint promotions, whereby companies pool marketing resources to promote their brands, are increasingly used to reduce marketing costs and develop common business opportunities, but formal knowledge about how they should be effectively implemented remains sparse. This paper investigates whether firms should jointly promote their complementary products when they also offer substitute products in another category. It also studies whether companies should partner with allies that can or cannot leverage on joint promotion to create spillover in their product portfolios. Our main findings are as follows. A company’s decision to enter or not to enter into a joint promotion depends on the presence and nature (positive or negative) of promotion spillover in its own product portfolio and the effect of joint promotion on each complementary product demand. Particularly, in the absence of spillover effect, joint promotion may not be mutually beneficial if its direct effects on the two complementary products are asymmetric. On the other hand, depending on its direct effects on the complementary products, joint promotion could be a profit-enhancing activity for the two firms even when it negatively affects the demand of their substitute products by intensifying price competition. Finally, we discuss the implications of branding strategies on the effectiveness of joint promotion. The results in this paper are useful for firms offering products in different categories where joint promotional spillover can occur.
Abstract: We assess the interactive effects of two commonly used channel coordination mechanisms (quantity discounts (QDs) and cooperative advertising (CA)). We use a game-theoretic model and solve four non-cooperative games. In the first game, neither QDs nor CA is implemented. Cooperative advertising alone is offered in the second game, while quantity discounts alone are offered in the third game. In the fourth game, both QDs and CA are implemented. We obtain analytical solutions and compare equilibrium results across games to assess the effectiveness of CA (QDs) when implemented alone or jointly with QDs (CA). The main findings suggest that the profitability of each of these mechanisms is affected by whether the other is implemented or not in the channel. For example, while CA benefits the manufacturer when implemented alone, it can increase or decrease the manufacturer’s profit when added to QDs. Looking at which coordination mechanism is most effective when used alone, we find that both the manufacturer and the supply chain prefer QDs to CA. Finally, the retailer may not benefit from either one or both of these coordination mechanisms, especially if marketing efforts are not highly effective.
Abstract: Prior to a movie release in theaters, trailer advertising provides valuable information that can help viewers and investors form expectations about the movie's future success. While previous research has looked at the financial implications of movie advertising budgets, the effects of trailers' creative characteristics on abnormal returns have not yet been investigated. Using a sample of movie trailers, results from our event study and cross-sectional analysis show that the appeal of the movie plot revealed in the trailer, the number of scene cuts and the inclusion of violent, sexual, or humorous scenes influence the movie's abnormal returns. However, the use of special effects in the movie trailer does not impact investors. Results also suggest that investors react more strongly to first than to follow-up trailers released for the movie, and that early release of the first positively impacts the movie's returns.
Abstract: This paper studies the optimal choice of promotional partners in a three-firm market where two firms sell complementary products and a third firm sells an independent product. Game-theoretic models are developed to investigate the following scenarios: no promotional partnership, partnership between the two complementary products, partnership between a complementary product and the independent product, and partnership between the three products. Equilibrium Nash solutions are obtained and conditions under which each of the four scenarios above can be implemented are identified. Results show that these conditions depend on various parameters, mainly the degree of product complementarity, the effectiveness of individual promotion, the effectiveness of joint promotion, and the base demand for each product. Commonly, a partnership between a complementary product and the independent product is optimal when the price effect of the complementary product is large, while the partnership between the two complementary products is more appealing when the effect of individual promotion is large enough. When feasible, a promotional partnership between the three products is preferred, except in some specified conditions.
Abstract: This paper investigates equilibrium strategies for both horizontal (HJP) and vertical (VJP) joint promotions (cooperative advertising) in the supply chain. A game theoretic model is solved for two setups: a centralized channel competing with a decentralized one (DC), and two competing decentralized channels (DD). Retailers decide of HJP and regular promotional efforts, as well as of prices. Manufacturers choose their transfer prices and VJP support rates offered to the retailer. For each setup, we solve for equilibrium strategies in two games: when retailers invest in HJP, and when they do not. Comparison of equilibrium solutions shows that, for both DC and DD settings, the manufacturer's VJP support to the retailer would be affected differently by HJP depending on the levels of both price and promotional competition. In particular, manufacturers should offer a lower VJP rate when price competition is lower than promotional competition, and higher VJP rates otherwise. The effects of HJP on equilibrium profits depend on the channel structure. When a decentralized channel is competing with a centralized one, we find that HJP is beneficial to the manufacturer. However, it can be detrimental to the decentralized retailer's profits, especially when products are closely competing both on prices and promotions but HJP is not highly effective. It can also harm the centralized channel if it has the highest baseline demands in the market. This result is not supported in case of similar competing decentralized channels, for which HJP leads to higher equilibrium profits earned by each retailer and manufacturer.
Abstract: The paper explores the implications of heterogeneous consumer response to advertising for the equilibrium strategies chosen by firms in a distribution channel. We solve a simple game theoretic model using a variation of consumers’ Hotelling utility model for a decentralized and a coordinated channel. The key findings show that heterogeneity considerably affects the value of channel coordination. Overlooking heterogeneous responses to advertising can lead to either undercutting or overestimating channel coordination benefits. In particular, our results indicate that, in contrast to previous findings in the literature, channel coordination might result in higher consumer prices especially when the average response to brand advertising exceeds consumers’ marginal disutility cost.
Abstract: This research assesses the effects of cooperative (coop) advertising in a channel with competing retailers considering both advertising and pricing as decision variables. We develop a game-theoretic model and provide equilibrium solutions for two games. In Game 1, the manufacturer and the retailers do not use cooperative advertising (status quo); and in Game 2, coop advertising is implemented. We also obtain optimal solutions for the case where the channel is coordinated. Contrary to the results provided for one-manufacturer, one-retailer channels, we find that coop advertising may not be profitable for the retailers or for the channel, especially when the market is characterized by low levels of price competition and high advertising competition between retailers. Although it benefits the manufacturer, the total effect of cooperative advertising on the channel profit might be negative under such conditions. The results also show that coop advertising stimulates retailers’ spending but may result in lower advertising expenditures than for a fully coordinated channel. Finally, when coop advertising benefits the entire channel, it does not fully achieve results from vertical integration.
Abstract: Most research about cooperative (coop) advertising programs in channels relies on the assumption that manufacturers and retailers decide of pricing and marketing efforts simultaneously. This paper evaluates this central assumption and investigates the optimal periodicity (sequence of move) of pricing and marketing efforts (ME) decisions for a distribution channel. We develop a game theoretic model that accounts for pricing at each level of the channel, for the manufacturer’s ME mix strategies (a direct ME to consumers and coop advertising program offered to the retailer) and the retailer’s ME as well. We obtain solutions for a bilateral channel under different vertical interaction scenarios; when the channel is led by the manufacturer, the retailer or when channel members decide simultaneously of each of their marketing mix decisions (vertical Nash). We compare the effect of pricing and ME decision periodicity on outputs for each channel member. The main findings suggest that simultaneous decision-making of pricing and ME is optimal only for high enough levels of the manufacturer’s ME effects. For very highly effective marketing efforts, sequential play of pricing and ME allows channel members to implement equilibrium strategies and achieve maximum profits that would not be achieved with simultaneous decision-making. This highlights the importance of relaxing the simultaneous play assumption of pricing and ME in a distribution channel.