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December 15, 2001

Arthur Keller on Friday Night

It was Friday night during the last week of Period 2, and Arthur Keller, a student at
INSEAD in Fontainebleau, France, was trying to study for the Marketing Management II exam
he would have to take on Monday morning. Arthur was having a good time at INSEAD. He
enjoyed his studies and he had met some interesting people, but he felt like he was missing
something. He remembered the comments of his friend Baker, who had graduated from
INSEAD in July 1998:

“Dude, INSEAD is a great place to meet girls. The parties are awesome, and
there is always a lot of booze around. You go there, and you will have no
problem with the ladies. Trust me.”

At the time, Arthur was really excited by Baker’s advice. But things hadn’t really turned
out as expected. Even worse, Arthur’s mother had recently stepped up the pressure for him to
settle down. He remembered how she had badgered him during their last telephone
conversation:

“Arthur, you haven’t brought any young women home in more than a year. Your
father is worried about you. Remember our next-door neighbor Ludwig? He just
got married last month—and he works in the post office! You know, you’re not
getting any younger.”

Arthur wasn’t sure what he wanted. Although he would not rule out a long-term
commitment, he didn’t know if he was ready to settle down. The only thing he was sure of was
that something had to change.

Arthur’s Background

Arthur was born in 1973 in a small town outside Frankfurt, Germany. After graduating
from a boarding school in Hamburg, he studied Civil Engineering at the highly esteemed
Deutschebayerischepoliteknikuniversität in Munich. He graduated in the top 10% of his class,
but decided to leave engineering to work as a financial analyst for Deutsche Bank covering the
Swedish women’s apparel industry. He enjoyed his job, but after five years he was ready for a
change.

Women had never expressed any strong opinions on Arthur’s looks. He was 184 cm tall
with a medium build. He liked to keep his light brown hair short, and a lot of people told him he
This case was prepared by Nadav Alon and Eric Meade, students at INSEAD, under no supervision and probably
while they were drunk. It is designed for use as the basis of discussion rather than to illustrate either the effective or
ineffective handling of a social situation. Any similarity to real persons is probably coincidental, but even if it is not,
we certainly don’t mean any harm.
looked a little like a young Sean Connery.

Arthur’s first experience with a girl was at the age of 14, when he met Helga at a science
camp. Helga was a year older than Arthur, and she had surprised him by asking if he wanted to
go to “first base.” Arthur wasn’t very athletic, so he declined, but he regretted it for years to
come.

One weekend when Arthur was home from university, his father walked into his room
and sat down beside him. He could sense that his father was a little uncomfortable, so he asked
if something was wrong. His father said that he had discussed the issue with Arthur’s mother,
and that they had decided it was time to talk to Arthur about “the birds and the bees.” Although
he had already learned most of his father’s lessons on his own, he listened politely to the
explanations.

During his last year at university, Arthur met a young Swiss girl named Heidi. She had
been in his Art History class the previous year, but somehow he had never noticed her. But one
night they were both studying late at the library and they got to talking. A few weeks later they
started dating, and after a year together Arthur thought she might be “the one.” But the stresses
of living in different cities after graduation eventually became too intense, and Heidi decided it
was time to move on.

Although people had warned him not to date his colleagues at Deutsche Bank, Linda
from Human Resources was irresistible. Newly transferred from the London office, she had the
cutest Scottish accent he had ever heard, as well as very impressive “highlands.”

After three months, Linda decided to transfer back to the London office, and Arthur had
to be satisfied with a string of “one-offs” from the Munich bar scene. Unhappy with this
lifestyle, Arthur decided it was time to go back to school.

Business School Romance

There was widespread opinion that business school was where sex-crazed young
professionals went when they wanted a break from work. In its November 1999 issue, Playboy
magazine had even published a ranking of the “Best Business Schools To Get Lucky” (Exhibit
1). Receiving top honors was Northwestern University’s Kellogg School, where more than 64%
of students reported having sexual relations with one of their classmates. Recent trends in the
job market had intensified the sexual nature of the MBA experience. One male student at the
University of Virginia’s Darden School reported that:

“After spending almost $100,000 and getting zero job offers, I figure I might as
well get something out of this MBA. And let’s face it: If these girls are gonna
give it up for free, that’s one hell of an NPV!”

Other students saw sex as an opportunity to improve their post-graduation prospects.

According to one female student at Harvard Business School:

“Maybe there isn’t a job waiting out there for me, but some of the guys here have
some serious cash. If I can catch one of them while I’m here, then that’s money
in the bank.”
 The high level of sexual activity at business schools had led some outsiders to suggest
that “MBA” really stands for “Married But Available.” However, there was a romantic side to
business school as well, with most classes generating at least one engagement by graduation.

Dating at INSEAD

INSEAD is an international business school in Fontainebleau, France. Although all

classes are taught in English, students come from all over the world (Exhibit 2). Social
interaction between students can take many forms. First, there are parties every weekend and
even occasionally during the week. These parties may be organized by individual students, or
they may be part of the National Weeks, in which students from a given country plan events for
the rest of the school based on their customs and culture. Students also socialize in small groups,
often by organizing “Random Dinners,” during which they dine with randomly chosen
classmates that they may never have met before.

Students spend a good deal of time interacting in an academic setting. Primarily, this
occurs within sections—groups of 70 to 80 students who take all of the core courses together.
Within the sections, students are divided into study groups. Although interaction within groups
can be tense at times, the study group is still a viable social outlet. Being on campus alone can
generate opportunities for social interaction, such as encounters in the library, coffee breaks
during the day, and conversations while sharing a cubicle.

The diversity of students at INSEAD was reflected in the diversity of attitudes on dating
and sexuality. In many ways, this mix of cultures led to a higher level of sexual activity than
might otherwise have been expected. In fact, the dean of the MBA program, Pekka Hietala, was
considering a new policy to deal with the issue.

“We need to deal with the excessive sexual activity between our students. We
need to give them a safe environment where they can study without being
overwhelmed by their hormones. The administration is considering segregating
men and women into different sections, as we believe this may be the only way to
fix the problem.”

Reports of high rates of dating at INSEAD overlooked the fact that the student population
was 76% male (Exhibit 3). Thus, although many people had found romance at INSEAD, the
phenomenon was no doubt limited to a small percentage of the males. Unfortunately, Arthur
was not in that percentage, and as he looked over his class notes, he wondered if it might just be
a matter of marketing. He decided to look back on his experiences over the past four months to
see if he could apply some of what he had learned in class.

“The first girl at INSEAD that caught my attention was a Canadian brunette
named Becky. We met on registration day in the line for mobile phones. We
talked for a few minutes and she was very outgoing. She was very excited about
the parties at INSEAD, which she had heard were a lot of fun.”

Arthur thought that the girl who sat next to him in class was nice, but she seemed a little
too uptight about her studies. He thought:
 “Everyone says that grades don’t matter in business school, but this girl seems
determined to be at the top of the class. I try to start conversation with her before
class, but she is always reviewing her solution to the case.”

At lunch one day, Arthur met a nice woman named Isabel. They had a very pleasant
conversation, and Arthur was disappointed to learn that she had recently become engaged to her
boyfriend, a Harvard Business School graduate who was working in London.

Arthur couldn’t help but notice a group of girls who were always very well dressed.
They spent a lot of time in the bar, but they obviously prepared for class, as demonstrated by
how much they spoke up in class. Many of them were pretty and smart, but Arthur had a hard
time figuring out what they wanted out of INSEAD.

Although these experiences were particularly memorable, Arthur recognized that there
were a lot of different types of girls at INSEAD. At the same time, he wondered if he could
organize the women of INSEAD in his mind. He remembered what his friend Baker had told
him over the summer:

“Dude, here’s the story. There are basically five kinds of girls at INSEAD. First,
you have the Spice Girls. You can find these girls anywhere—but especially at
all the parties. They’re pretty, but it’s all about supply and demand. The
competition is usually pretty stiff. Next you have the Miss McKinseys. They are
sponsored by their consulting companies and are at INSEAD to have a good time.
These girls probably weren’t much fun in high school, so this is their second
chance. Then you’ve got the Ford Prize girls, but you probably won’t find them
outside the library. There are a lot of girls here with husbands or boyfriends—we
called them the Wives’ Club. These girls seem untouchable at first, but they are
friendly—maybe a little too friendly. The Other girls are anybody’s guess, so try
them at your own risk. But here’s the cool part—we even did a survey among the
guys, and these categories are for real.” (Exhibits 4 and 5)

With all this in mind, Arthur was determined to use his marketing knowledge to find a
solution. But what segment should he pursue? And once he had decided on a segment, how
could he maximize his chances of finding what he was looking for?
 Exhibit 1: Best Business Schools to Get Lucky

Rank Business School Percentage of students reporting at least

one sexual act with a classmate
1 Northwestern University 64%
2 New York University 61%
3 Purdue University 58%
4 Georgia Institute of Tech. 54%
5 University of California 53%
6 Thunderbird 53%
7 University of Miami 51%
8 University of Washington 46%
9 Syracuse University 46%
10 London Business School 45%
11 Columbia University 42%
12 INSEAD 41%
13 Mass. Institute of Tech. 36%
Source: Playboy Magazine, November 1999

Exhibit 2: INSEAD September 2001 Promotion by Nationality

France U.K. Netherlands Germany U.S. India Middle East Asia Others
Male 29 26 26 14 23 14 16 33 86
Female 11 7 6 5 3 3 5 12 22

Exhibit 3: INSEAD September 2001 Promotion by Age and Gender

140 130

120
100
80 65
60 53

40 30 26
19
20 10 8
0
23-25 26-28 29-31 32-35
Age group

Male Female
 Exhibit 4: Results of September 1997 Promotion Survey1
Spice Girls Wives’ Club Ford Prize Miss McKinsey Others
Beauty 4.5 2.4 2.6 3.3 2.0
Friendliness 2.1 4.2 1.9 3.5 2.9
Intelligence 2.3 3.1 3.8 2.6 2.5
Accessibility 4.0 2.2 1.2 3.8 3.6
1
This survey was conducted among 247 male students using a rating scale of 1-5 and with a
sampling error of ±0.3. No significant homoskedasticity was detected.

Exhibit 5: Estimated Size of Various Segments

Exhibit 6: Arthur Keller’s Balance Sheet1

Assets Liabilities and Equity

Cash 400 Accounts Payable4 163

Prepaid Leased Car 2300 Unpaid Rent for December 500
Marketable Securities2 21350 Long-term Debt5 38000
Total Current Assets 24050 Total Liabilities 38663
Savings Account 29432
Goodwill3 (380) Retained Earnings 14439
Total Non-current Assets 29052 Total Equity 14439

Total Assets 53102 Total Liabilities and Equity 53102

1
As of December 2001, in December 2001 Euros
2
Loss of 47%
3
Negative goodwill for really bad pick-up lines used during Welcome Week
4
Unpaid poker debts
5
ABN-AMRO INSEAD Global Loan
 Exhibit 7: Arthur's Schedule (Representative Week)

Day Hour Activity Day Hour Activity

Monday 8h30 to 10h00 Still asleep Friday 8h30 to 10h00 Still asleep
10h15 to 11h45 Checking mail at INSEAD 10h15 to 11h45 MAC
12h00 to 13h30 POM 12h00 to 13h30 Finance
13h30 to 14h00 Lunch 13h30 to 14h00 Lunch
14h00 to 15h30 Finance 14h00 to 15h30 Studying at the library
15h45 to 17h15 MAC 15h45 to 17h15 Studying at the library
17h30 to 19h00 Hanging out in the bar 17h30 to 19h00 Checking mail
19h00 to 21h00 Checking mail at INSEAD 19h00 to 21h00 Dinner with friends
21h00 to 23h00 Dinner with a friend 21h00 to 23h00 Greek party
23h00 to 01h30 Preparing for next day 23h00 to 01h30 Greek party
Tuesday 8h30 to 10h00 Still asleep Saturday 8h30 to 10h00 Still asleep
10h15 to 11h45 Still asleep??? 10h15 to 11h45 Still asleep
12h00 to 13h30 Lunch 12h00 to 13h30 Brunch
13h30 to 14h00 Foosball 13h30 to 14h00 Long brunch
14h00 to 15h30 OB 14h00 to 15h30 Gym
15h45 to 17h15 Markstrat 15h45 to 17h15 Studying at the library
17h30 to 19h00 Markstrat 17h30 to 19h00 Checking mail
19h00 to 21h00 Checking mail at INSEAD 19h00 to 21h00 Studying at the library
21h00 to 23h00 Studying at the library 21h00 to 23h00 Dinner with friends
23h00 to 01h30 Drinks at Bakardi Bar 23h00 to 01h30 Dinner with friends
Wednesday 8h30 to 10h00 POM Sunday 8h30 to 10h00 Still asleep
10h15 to 11h45 MAC 10h15 to 11h45 Still asleep
12h00 to 13h30 Lunch 12h00 to 13h30 Lunch
13h30 to 14h00 Coffee at the bar 13h30 to 14h00 Lunch
14h00 to 15h30 Group meeting 14h00 to 15h30 Checking mail
15h45 to 17h15 Group meeting 15h45 to 17h15 Cycling
17h30 to 19h00 Checking mail at INSEAD 17h30 to 19h00 Studying
19h00 to 21h00 Gym??? 19h00 to 21h00 Studying
21h00 to 23h00 Turkish Dinner 21h00 to 23h00 Random Dinner
23h00 to 01h30 Turkish Dinner 23h00 to 01h30 Random Dinner
Thursday 8h30 to 10h00 Still asleep
10h15 to 11h45 Checking mail at INSEAD
12h00 to 13h30 Marketing
13h30 to 14h00 Lunch
14h00 to 15h30 OB
15h45 to 17h15 OB
17h30 to 19h00 Group meeting
19h00 to 21h00 Home early
21h00 to 23h00 Preparing for next day
23h00 to 01h30 Preparing for next day