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

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.