Consumer Confidence

Mathew Isaac, PhD, can remember as a boy going with his mom to the grocery store and listening as she pointed out the price for this item or that, explaining the concept of unit cost to the future marketing professor. 

“She would fall on the spectrum of being a rational decision maker in terms of really thinking about the price and the price per volume,” Isaac says from his office in the Pigott Building, where he is the chair of the Marketing Department at the Albers School of Business and Economics. “And she was very savvy about those sorts of things.” 

That’s an example of what is called a “rational” decision, but Isaac admits that even though he studies consumer judgment and decision-making, asking the question of “Why do shoppers do the things they do?” he is just as human as those he studies and can be just as irrational. 

“If you're in a group and you order food at a restaurant, people tend not to order the same thing as someone else who’s just ordered it,” he says, an example of what marketing scholars call “variety seeking,” a way to avoid boredom and maximize satisfaction, but which can veer into the irrational. “If my wife has ordered something, I won’t order that, even though oftentimes that may not be maximizing my own satisfaction. I might not like what I end up getting and then I try to just eat hers.” 

Born in India and raised in the southwest Chicago suburbs, Isaac was hired at SU in 2011 and quickly became known for hosting an annual review of multimillion dollar Super Bowl ads, something he’s been doing for the past 13 years. This is where Albers marketing professors, industry professionals and students gather a few days after the big game to grade and rank the commercials that were shown during the game. 

“The reason companies and entire industries have failed is many times they’re focused on a very specific product or solution as opposed to thinking about consumer benefit more broadly.”
—Mathew Isaac, PhD

Marketing is a versatile area of study, he says, and can be naturally paired with seemingly far afield disciplines like psychology and design. 

Named chair in 2022, Isaac has since seen the department achieve a national ranking of 21 (among all the marketing programs in the country) and add a marketing minor, which has drawn considerable attention from the start—not just from business majors but across the university.  

Though he loves teaching, his passion lies in researching the depths of consumer behavior, looking for the reasons, rational and otherwise, that drive people to spend and use products and services. 

Imparting that to students means clearing the air. On the first day of class for Introduction to Marketing, he takes aim at marking the stark differences and distinctions between marketing and advertising, plus knocking down myths and misconceptions about marketing, one of which is that the goal of marketing is to find ways to convince consumers to buy things they don’t want or need. 

“It’s not about stuffing something down the consumer’s throat,” Isaac says of marketing. “It’s about understanding customer wants and needs and then figuring out how to most effectively provide those.”  

He sees in marketing a way to make a substantive difference, helping consumers think about the less obvious reasons behind why they spend money so that they can spend more wisely. 

“I do think it can move the needle in important areas,” he says, such as a research paper he co-authored now under peer review that examined how consumers approach multiple debts—like a mortgage and other debts—when they get a raise at work or a windfall of cash falls in their lap. Do you put it toward the older debts or the newer?  

Isaac says prodding this question uncovered a bias: Many people are likely to use it to pay down the older debt, thinking a “first-in, first-out” approach is best, sure that this is the smartest approach. 

“What we find is that in many cases, it’s better to actually focus on paying the newer debt down first,” he says. “The way amortization works is you’re usually paying much more in interest earlier. If you're able to reduce your principal, it’s actually better for you.” 

Isaac didn’t start out following his curiosity about why consumers make decisions. As an undergraduate he studied biology at the University of Chicago, but once he took a turn in a laboratory, he found himself lonely. 

“It was for me a little isolating because you were working individually a lot of the time.” 

What he missed was the human connection. Too late to change his major, Isaac finished his degree and began teaching GED classes in Chicago, an experience that not only awakened a love of teaching but exposed him to people he would not have otherwise met. 

“I learned a lot about them and their stories and how they got to different points in their lives and how they’d made decisions,” he says. “It was a great experience for me.” 

He returned to the University of Chicago for his MBA, an experience that put him in closer contact with marketing and its potential to uncover answers to the “Why?” 

From the start he was hooked. The first paper he read in his first MBA marketing class, a Harvard Business Review article from 1960 called “Marketing Myopia,” examined how different industries have failed over time. It is now the first paper his students read. 

“The reason companies and entire industries have failed is many times they’re focused on a very specific product or solution as opposed to thinking about consumer benefit more broadly,” Isaac says, pointing to the example of the railroads, which brushed off the emerging technology of the automobile. 

He remained in Chicago for his PhD—he is a massive Chicago Cubs fan, after all—and earned his PhD from Northwestern University while investigating the underlying psychology of “framing effects.” An example is when retailers are selling a $10 item but enticing customers with a 20 percent discount rather than marking it $2 off, which is the same thing but can affect decision making differently.  

“A lot of times we think about these things as the same,” he says. “When you’re pricing something, you might not think that it could make a difference and yet these little things can actually have a big, big impact.” 

Isaac lives in Bellevue with his wife, Anjeli, a dermatologist, and has three daughters, Sayana, 19, Ameiya, 17, and Sophia, 12.