Shugan is an expert in health care and market research.
Industry Expertise (5)
Health Care - Services
Areas of Expertise (17)
Advance-Selling and other Creating Pricing Practices
Normative Methods for Modeling Competition
Competition in Health-Care Markets
Markets for Evaluative Information
Growth in Competitive Markets
Understanding Service Markets
Public vs. Private Competition
Product Line Management
Channels of Distribution
Nonprofit Versus For-Profit Health Care Competition: How Service Mix Makes Nonprofit Hospitals More ProfitableJournal of Marketing Research
Jihwan Moon, Steven M Shugan
2020 This article studies the intersection between the largest U.S. industry—health care—and the $1 trillion nonprofit sector. Using analytical and empirical analyses, the authors reveal the marketing strategies helping private nonprofit hospitals achieve higher output, prices, and profits than for-profit hospitals. Nonprofit hospitals, focusing on both profits and output, obtain these outcomes by expanding their service mix with high-priced premium specialty medical services (PSMS), whereas for-profit hospitals can be more profitable with higher prices for basic services. Competition increases the differences between nonprofit and for-profit hospitals in PSMS breadth, output, and prices. Nonprofit hospitals lose their competitive advantage when competing with other nonprofits; that is, presence of a for-profit competitor broadens available nonprofit PSMS. With broader service mixes, nonprofits focus more on national advertising than for-profits because PSMS (e.g., pediatric trauma, neurosurgery, heart transplants, oncology) require larger geographic markets than local basic services (e.g., laboratory, diagnostics, nursing, pharmaceutics). Exogenous, heterogeneous state regulations restricting for-profit hospital entry help econometric identification (i.e., markets prohibiting for-profits act as controls). Service mix may be a key difference between nonprofit and for-profit hospitals.
Explaining Bundle-Framing Effects with Signaling TheoryMarketing Science
Jihwan Moon, Steven M Shugan
2018 Many sellers bundle add-ons (e.g., in-flight entertainment, hotel amenities) with core services (e.g., transportation, lodging). One surprising empirical finding is that consumers often believe bundle frames provide greater value than equivalent unbundle frames ($10 > $9 + $1) despite equal all-inclusive prices. Although these context or framing effects appear irrational in isolation, the bundle-framing effect might reflect market relationships caused by underlying seller motives. We show that bundling can signal information about product appeal, that is, popularity. Specifically, only sellers of wide-appeal (popular) add-ons (e.g., well-liked entertainment, sought-after hotel amenities, standard side salads, popular excursions) have an incentive to bundle their add-ons with their core products (e.g., flights, hotel rooms, restaurant entrées, cruise trips). By contrast, sellers of narrow-appeal (niche) add-ons (e.g., unorthodox entertainment, unpopular amenities, exotic side salads, unusual excursions) find that bundling is undesirable because they lose core revenue. Consequently, bundling can convey information about horizontally differentiated markets even when the total all-inclusive price equals that of unbundling. Perhaps some presumed consumer biases can reveal market relationships. Frames provide information about the framer.
Strategic use of product enhancements: upgrades, add-ons, extras, and accessoriesHandbook of Research on New Product Development
Steven M Shugan
2018 Although developing new products is often essential for the survival of a seller, it is very costly and risky to continuously launch new products or replace established products with new ones. Sometimes, a less risky alternative is to modify or enhance the established existing base or core product with upgrades, add-ons, extras, and accessories. These enhancements may sometimes help rejuvenate established products by adding new benefits, but we will distinguish between these different enhancements because their different properties allow them to serve different purposes. Sometimes consumers purchase these enhancements (upgrades, add-ons, extras, and accessories) with or after purchasing the core product (Guiltinan 1987). In some cases, that is the only option. For example, hotel guests can only purchase hotel room service after buying a hotel room and airline passengers can only purchase in-flight Wi-Fi…
Product Line Bundling: Why Airlines Bundle High-End While Hotels Bundle Low-EndMarketing Science
Steven M Shugan, Jihwan Moon, Qiaoni Shi, Nanda S Kumar
2017 Product lines are ubiquitous. For example, Marriott International manages high-end ultra-luxury hotels (e.g., Ritz-Carlton) and low-end economy hotels (e.g., Fairfield Inn). Firms often bundle core products with ancillary services (or add-ons). Interestingly, empirical observations reveal that industries with ostensibly similar characteristics (e.g., customer types, costs, competition, distribution channels, etc.) employ different bundling strategies. For example, airlines bundle high-end first class with ancillary services (e.g., breakfast, entertainment) while hotel chains bundle ancillary services (e.g., breakfast, entertainment) at the low-end. We observe, unlike hotel lines that are highly differentiated at different geographic locations, airlines suffer low core differentiation because all passengers (first-class and economy) are at the same location (i.e., same plane, weather, delays, cancellations, etc.). In general, we find product lines with low core differentiation (e.g., airlines, amusement parks) routinely bundle high-end while product lines with highly differentiated cores (e.g., hotels, restaurants) routinely bundle low-end. High-end bundling makes the high-end more attractive, increasing line differentiation (less intraline competition) while low-end bundling decreases line differentiation. Therefore, bundling allows optimal differentiation given a differentiation constraint (complex costs). Last, firms may use strategic bundling for targeting in their core products; e.g., low-end hotels bundle targeted add-ons unattractive to high-end consumers such as lower-quality breakfasts and slower Internet.
Enhanced NOAA chemical reactivity worksheet for determining chemical compatibilityProcess Safety Progress
Dave Gorman, Jim Farr, Rob Bellair, Wade Freeman, Dave Frurip, Al Hielscher, Harold Johnstone, Myriam Linke, Pat Murphy, Min Sheng, Klaas van Gelder, Dalina Viveros
2014 As a result of a two-year joint effort between the National Oceanic and Atmospheric Administration (NOAA) and The Dow Chemical Company, an enhanced version (3.0) of the NOAA Chemical Reactivity Worksheet now is available. In addition to addressing previously identified limitations with version 2.0 of this tool, several enhancements have been incorporated into the tool to help with the generation and presentation of chemical compatibility charts. This article covers the development and use of this new tool, highlighting the enhancements that position this tool to become the gold standard within the chemical industry for determining chemical compatibility.