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Do All Your Detailing Efforts Pay Off? Dynamic Panel Data Methods Revisited

by Doug J. Chung, Byungyeon Kim, and Byoung Park

Personal selling in the form of detailing to physicians is the main go-to-market practice in the pharmaceutical industry. This paper provides a practical framework to analyze the effectiveness of detailing efforts. The method and empirical insights can help firms allocate sales-force resources more efficiently and devise optimal routes and call-pattern designs.

First Look at New Research and Ideas, June 13

Sean Silverthorne

Focus on a few growth metrics ... Immigrants and ingenuity ... How important is ‘detailing’ to medical sales?

What's the Ideal Frequency for a Sales Quota?

by Carmen Nobel

Sales reps feed on two forms of compensation: salary, and a bonus tied to achieving a periodic quota. Would a more frequent quota incentivize better numbers? Doug Chung and Das Narayandas offer some answers. Open for comment; Comment(s) posted.

Where Should We Build a Mall? The Formation of Market Structure and Its Effect on Sales

by Doug J. Chung, Kyoungwon Seo, and Reo Song

In spite of the recent surge in e-commerce, brick-and-mortar retail, specifically in the form of large-scale shopping malls, is still the dominant venue for consumer purchases in the developed world. The construction of mass-scale shopping malls has also experienced tremendous growth in newly industrialized countries such as China. This research provides a rigorous, yet practical, framework to understand and evaluate why retail stores join a shopping mall and how their decisions affect mall revenue. The model can be extended and applied to a number of settings where a decision maker must choose among alternative sites to construct a market, for example, for transportation hubs such as airports or train stations.

First Look at New Research: February 14

Sean Silverthorne

After a business is sold, it becomes a hit ... The best location for a shopping mall ... Patent trolls cost jobs.

The Effects of Quota Frequency on Sales Force Performance: Evidence from a Field Experiment

by Doug J. Chung and Das Narayandas

This study of different sales quotas and their effect on sales performance at a major retail chain in Sweden finds that changing from a monthly to a daily quota plan increases performance mainly for low-performing salespeople.

First Look at New Research: January 17

Sean Silverthorne

Should sales people be rewarded daily? ... How do firms survive long term in emerging markets? ... Entrepreneurs try to improve the mattress-buying experience.

Strategic Channel Selection with Online Platforms: An Empirical Analysis of the Daily Deal Industry

by Lingling Zhang and Doug J. Chung

Platform businesses grow by connecting groups of customers. This study sheds light on the relative bargaining power of platforms and merchants, demonstrating that price bargaining power is an important factor to consider in platform competition. When the platform is too big and powerful, its strong bargaining power may push away some business partners and hence slow down growth.

What’s the Value of a Win in College Athletics?

by Roberta Holland

As debate continues over whether student-athletes should be paid, professor Doug Chung’s research on the massive money being earned by collegiate football and basketball programs could help guide the answer. Open for comment; Comment(s) posted.

Selling to a Moving Target: Dynamic Marketing Effects in U.S. Presidential Elections

by Doug J. Chung & Lingling Zhang

Electing the President of the United States is a decision with deep and lasting global repercussions, yet predicting the likelihood of success of any presidential campaign has been an inexact science, at best. This paper examines political campaigns' use of marketing activities using a unique and comprehensive data set that covers the past three US presidential elections. Among the findings, a candidate's own advertising is more effective than outside (or PAC) advertising. Advertising and campaign appearances work more favorably towards Republican candidates. In contrast, field operations are more effective for Democratic candidates, primarily through get-out-the-vote efforts. These insights together lay a foundation for more effective allocation of campaign resources in future presidential elections. Closed for comment; 0 Comment(s) posted.

Money and Quotas Motivate the Sales Force Best

by Roberta Holland

Bonus programs are effective for motivating sales people, but also costly for companies to maintain. Doug Chung and Das Narayandas study several compensation schemes to see which work best. Open for comment; 11 Comment(s) posted.

Incentives versus Reciprocity: Insights from a Field Experiment

by Doug J. Chung & Das Narayandas

Sales force compensation is a key instrument available to firms for motivating and enhancing sales performance. What are the most effective forms of compensation? In a field experiment involving four regional sales forces of a prominent firm in India, the authors examined the impact of conditional and unconditional bonus schemes. Findings from this study provide guidance to firms on how to use conditional and unconditional compensation to enhance sales rep productivity and better manage the achievement of sales forecasts. Closed for comment; 0 Comment(s) posted.

Ground Game, Air Wars, and Other Marketing Lessons From Presidential Elections

by Dina Gerdeman

In the last few presidential elections, personal selling—not mass advertising—has tipped the difference for Democrats. But that's not always the case. Doug J. Chung's lessons of electoral war for all marketers. Open for comment; 1 Comment(s) posted.

The Air War versus The Ground Game: An Analysis of Multi-Channel Marketing in US Presidential Elections

by Doug J. Chung & Lingling Zhang

For United States presidential elections, mass media advertising has been referred to as the "air war" while targeted personal selling is the "ground game." Firms, too, increasingly use both mass media advertising and targeted personal selling to successfully promote products and brands in the marketplace. In this study, the authors jointly examine the effect of mass media advertising and personal selling in the context of US presidential elections. By linking various campaign activities to county-level vote results, the authors are able to offer a more comprehensive identification of the causal effect for campaign activities compared to existing studies on this topic. The results generate insights into the effectiveness of each campaign activity for different voter segments. For example, field operations are more effective for voters with stronger baseline partisan preferences, while advertising from the presidential candidates is more effective among those who are more on the margin. Overall, findings show that political campaigns play an essential role in the outcome of elections. This is contrary to the "minimum effect of campaigning" view held by some pundits, who claim that most voters already have their minds made up and, hence, campaigns barely move the needle in terms of voting results. Such findings may help firms in allocating resources across and within channels. Key concepts include: Advertising can play a critical role in a close election-but not when one party has a big advantage. While candidates' own ads are found to be more effective for voters with weaker baseline partisan preferences, the opposite is true for PAC ads. In the United States-and prompted by a tremendous increase in campaign spending-both political strategists and the general public have engaged in a heated discussion about the effect of campaign activities on actual election outcomes. Closed for comment; 0 Comment(s) posted.

Diagnosing the ‘Flutie Effect’ on College Marketing

by Sean Silverthorne

Boston College, after one of the most dramatic plays in collegiate football history, benefitted with a dramatic upswing in applications. Other colleges have experienced similar upswings from sports success. In a new study, Doug J. Chung demonstrates the reality behind the "Flutie Effect," named after BC quarterback Doug Flutie. Closed for comment; 8 Comment(s) posted.

Do Bonuses Enhance Sales Productivity? A Dynamic Structural Analysis of Bonus-Based Compensation Plans

by Doug J. Chung, Thomas Steenburgh & K. Sudhir

Personal selling is a primary marketing mix tool for most B2B firms to generate sales. Yet there is little research on how the compensation plan motivates a sales force and affects performance. This paper develops and estimates a dynamic structural model of sales force response to a compensation plan with various components: salary, commissions, lump-sum bonus for achieving quotas, and different commission rates beyond achieving quotas. Overall, the analysis helps assess the impact of (1) different components of compensation and (2) the differential importance of periodic bonuses on performance on different segments of sales people. Key concepts include: A quota-bonus scheme used by a firm increases performance of the sales force by serving as intermediary goals and pushing employees to meet targets. Features such as overachievement compensation reduce the problems associated with sales agents slacking off when they get close to achieving their quota. Quarterly bonuses serve as a continuous evaluation scheme to keep sales agents within striking distance of their annual quotas. In the absence of quarterly bonuses, failure in the early periods to accomplish targets causes agents to fall behind more often than in the presence of quarterly bonuses. Thus, a quarterly bonus serves as a valuable sub-goal that helps the sales force stay on track in achieving their overall goal. Quarterly bonuses are especially valuable to low performers. Overachievement commissions increase performance among the highest performers. Closed for comment; 0 Comment(s) posted.

The Dynamic Advertising Effect of Collegiate Athletics

by Doug J. Chung

The primary form of mass media advertising by academic institutions in the United States is, arguably, through its athletics program. This study investigates the possible advertising effects of intercollegiate athletics. Specifically, it looks at the spillover effect and the magnitude and divergence that athletic success has on the quantity and quality of applications received by an academic institution of higher education in the United States. Overall, findings show that athletic success has a significant impact on the quality and quantity of applicants to these institutions. However, athletic success has relatively more importance to the students with lower ability. Students of higher ability have a stronger preference for the quality of education compared to their lower-ability counterparts. Key concepts include: When a school goes from being mediocre to being great on the football field, applications increase by 18.7 percent. To attain similar effects, a school has to either decrease its tuition by 3.8 percent or increase the quality of its education by recruiting higher-quality faculty who are paid five percent more in the academic labor market. Schools become more selective with athletic success. For a mid-level school, in terms of average SAT scores, the admissions rate improves by 5.1 percent with high-level athletic success. Students with low ability value the historical success of intercollegiate athletics over longer periods of time. Surprisingly, students with high SAT scores are also significantly affected by athletic success. Closed for comment; 0 Comment(s) posted.