Doug J. Chung

Assistant Professor of Business Administration

Unit: Marketing

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Doug J. Chung is an assistant professor of business administration in the Marketing Unit and teaches the Marketing course in the MBA required curriculum and Business Marketing in Executive Education. Professor Chung focuses his research primarily on sales force management and incentive compensation. His current work examines how different components of an incentive compensation plan affect the performance of varying types of sales agents. Professor Chung earned his Ph.D. in management at Yale University, where he also earned an MA and M. Phil in management. He is the recipient of the ISMS Doctoral Dissertation Award, ISBM Doctoral Support Award, and the Mary Kay Doctoral Dissertation Award. He is also a member of the Edward A. Bouchet Graduate Honor Society. He completed his undergraduate studies at Korea University. Prior to pursuing a career in academics, Professor Chung served as an officer and platoon commander in the South Korean Special Forces. He also held a variety of industry positions with several multinational companies.

Featured Work

Publications

Journal Articles

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

    We estimate a dynamic structural model of sales force response to a bonus based compensation plan. Substantively, the paper sheds insights on how different elements of the compensation plan enhance productivity. We find evidence that: (1) bonuses enhance productivity across all segments; (2) overachievement commissions help sustain the high productivity of the best performers even after attaining quotas; and (3) quarterly bonuses help improve performance of the weak performers by serving as pacers to keep the sales force on track to achieve their annual sales quotas. The paper also introduces two main methodological innovations to the marketing literature: First, we implement empirically the method proposed by Arcidiacono and Miller (2011) to accommodate unobserved latent class heterogeneity using a computationally light two-step estimator. Second, we illustrate how discount factors can be estimated in a dynamic structural model using field data through a combination of (1) an exclusion restriction separating current and future payoff and (2) a finite horizon model in which there is no forward looking behavior in the last period.

    Keywords: Performance Productivity; Salesforce Management; Compensation and Benefits;

    Citation:

    Chung, Doug J., Thomas Steenburgh, and K. Sudhir. "Do Bonuses Enhance Sales Productivity? A Dynamic Structural Analysis of Bonus-Based Compensation Plans." Marketing Science 33, no. 2 (March–April 2014): 165–187. (Lead article. Featured in HBS Working Knowledge.) View Details
  2. The Dynamic Advertising Effect of Collegiate Athletics

    I measure the spillover effect of intercollegiate athletics on the quantity and quality of applicants to institutions of higher education in the United States, popularly known as the "Flutie Effect." I treat athletic success as a stock of goodwill that decays over time, similar to that of advertising. A major challenge is that privacy laws prevent us from observing information about the applicant pool. I overcome this challenge by using order statistic distribution to infer applicant quality from information on enrolled students. Using a flexible random coefficients aggregate discrete choice model that accommodates heterogeneity in preferences for school quality and athletic success, and an extensive set of school fixed effects to control for unobserved quality in athletics and academics, I estimate the impact of athletic success on applicant quality and quantity. Overall, athletic success has a significant long-term goodwill effect on future applications and quality. However, students with lower than average SAT scores tend to have a stronger preference for athletic success, while students with higher SAT scores have a greater preference for academic quality. Furthermore, the decay rate of athletics goodwill is significant only for students with lower SAT scores, suggesting that the goodwill created by intercollegiate athletics resides more extensively with low-ability students than with their high-ability counterparts. But, surprisingly, athletic success impacts applications even among academically stronger students.

    Keywords: advertising; choice modeling; entertainment marketing; heterogeneity; panel data; structural modeling; Higher Education; Consumer Behavior; Advertising; Sports; Advertising Industry; Education Industry;

    Citation:

    Chung, Doug J. "The Dynamic Advertising Effect of Collegiate Athletics." Marketing Science 32, no. 5 (September–October 2013): 679–698. (Lead article. Featured in HBS Working Knowledge.) View Details

Cases and Teaching Materials

    Research Summary

  1. Current Research

    Professor Chung models the effect of incentive compensation to study its impact on the sales force. Using data from a Fortune 500 company, he has developed a dynamic structural model of sales force response to a bonus-based compensation plan and examined how various components of the plan affect the performance of sales agents. While bonuses enhance productivity across all segments, strong and weak performers exhibit differences. The best sales people can sustain their high levels of productivity even after attaining their quotas with the incentive of overachievement commissions, and weaker performers can be kept on track toward annual quotas with the incentive of quarterly bonuses.

    Professor Chung also studies the impact of unconditional incentives such as recognition and awards. Further, he is examining how framing a compensation plan can have different outcomes in sales force performance. He finds, in the short run, that the more vicious the incentive plan is, the more immediate the impact on performance.  However, there are more negative effects in performance in the long-run. Recognition and rewards, on the other hand, have limited impact in the short-run but produce significant improvement in performance in the long-run. 

    Professor Chung is expanding his research to include cultural factors by investigating the effect of local and global incentives in businesses in Asia and Latin America.

    Teaching

  1. MBA Required Curriculum Marketing

    Marketing

    The objectives of this course are to demonstrate the role of marketing in the company; to explore the relationship of marketing to other functions; and to show how effective marketing builds on a thorough understanding of buyer behavior to create value for customers.

    Students learn how to:

    • Make marketing decisions in the context of general management.
    • Control the elements of the marketing mix—product policy, channels of distribution, communication, and pricing—to satisfy customer needs profitably.
    • Use this knowledge in a brand management simulation.

    The course culminates in an examination of the evolution of marketing, particularly focusing on opportunities presented by the Internet.

  1. Edward A. Bouchet Graduate Honor Society: Member of the Edward A. Bouchet Graduate Honor Society.

  2. ISMS Doctoral Dissertation Award: Received a 2011 ISMS Doctoral Dissertation Award for “Do Bonuses Enhance Sales Productivity? A Dynamic Structural Analysis of Bonus-Based Compensation Plans” from the INFORMS Society for Marketing Science.

  3. Mary Kay Doctoral Dissertation Award: Runner-up in 2011 for the Mary Kay Doctoral Dissertation Award from the Academy of Marketing Science.

  4. ISBM Doctoral Support Award: Received a 2010 ISBM Doctoral Support Award for "The Design of Incentive Contracts and Its Effect on Worker Behavior" from the Institute for the Study of Business Markets.