• Journal of Global Scholars of Marketing Science
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• v.20 no.1
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• pp.89-97
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• 2010

This study researches the effects of common features on a no-choice option with respect to regulatory focus theory. The primary interest is in three factors and their interrelationship: common features, no-choice option, and regulatory focus. Prior studies have compiled vast body of research in these areas. First, the "common features effect" has been observed bymany noted marketing researchers. Tversky (1972) proposed the seminal theory, the EBA model: elimination by aspect. According to this theory, consumers are prone to focus only on unique features during comparison processing, thereby dismissing any common features as redundant information. Recently, however, more provocative ideas have attacked the EBA model by asserting that common features really do affect consumer judgment. Chernev (1997) first reported that adding common features mitigates the choice gap because of the increasing perception of similarity among alternatives. Later, however, Chernev (2001) published a critically developed study against his prior perspective with the proposition that common features may be a cognitive load to consumers, and thus consumers are possible that they are prone to prefer the heuristic processing to the systematic processing. This tends to bring one question to the forefront: Do "common features" affect consumer choice? If so, what are the concrete effects? This study tries to answer the question with respect to the "no-choice" option and regulatory focus. Second, some researchers hold that the no-choice option is another best alternative of consumers, who are likely to avoid having to choose in the context of knotty trade-off settings or mental conflicts. Hope for the future also may increase the no-choice option in the context of optimism or the expectancy of a more satisfactory alternative appearing later. Other issues reported in this domain are time pressure, consumer confidence, and alternative numbers (Dhar and Nowlis 1999; Lin and Wu 2005; Zakay and Tsal 1993). This study casts the no-choice option in yet another perspective: the interactive effects between common features and regulatory focus. Third, "regulatory focus theory" is a very popular theme in recent marketing research. It suggests that consumers have two focal goals facing each other: promotion vs. prevention. A promotion focus deals with the concepts of hope, inspiration, achievement, or gain, whereas prevention focus involves duty, responsibility, safety, or loss-aversion. Thus, while consumers with a promotion focus tend to take risks for gain, the same does not hold true for a prevention focus. Regulatory focus theory predicts consumers' emotions, creativity, attitudes, memory, performance, and judgment, as documented in a vast field of marketing and psychology articles. The perspective of the current study in exploring consumer choice and common features is a somewhat creative viewpoint in the area of regulatory focus. These reviews inspire this study of the interaction possibility between regulatory focus and common features with a no-choice option. Specifically, adding common features rather than omitting them may increase the no-choice option ratio in the choice setting only to prevention-focused consumers, but vice versa to promotion-focused consumers. The reasoning is that when prevention-focused consumers come in contact with common features, they may perceive higher similarity among the alternatives. This conflict among similar options would increase the no-choice ratio. Promotion-focused consumers, however, are possible that they perceive common features as a cue of confirmation bias. And thus their confirmation processing would make their prior preference more robust, then the no-choice ratio may shrink. This logic is verified in two experiments. The first is a $2{\times}2$ between-subject design (whether common features or not X regulatory focus) using a digital cameras as the relevant stimulus-a product very familiar to young subjects. Specifically, the regulatory focus variable is median split through a measure of eleven items. Common features included zoom, weight, memory, and battery, whereas the other two attributes (pixel and price) were unique features. Results supported our hypothesis that adding common features enhanced the no-choice ratio only to prevention-focus consumers, not to those with a promotion focus. These results confirm our hypothesis - the interactive effects between a regulatory focus and the common features. Prior research had suggested that including common features had a effect on consumer choice, but this study shows that common features affect choice by consumer segmentation. The second experiment was used to replicate the results of the first experiment. This experimental study is equal to the prior except only two - priming manipulation and another stimulus. For the promotion focus condition, subjects had to write an essay using words such as profit, inspiration, pleasure, achievement, development, hedonic, change, pursuit, etc. For prevention, however, they had to use the words persistence, safety, protection, aversion, loss, responsibility, stability etc. The room for rent had common features (sunshine, facility, ventilation) and unique features (distance time and building state). These attributes implied various levels and valence for replication of the prior experiment. Our hypothesis was supported repeatedly in the results, and the interaction effects were significant between regulatory focus and common features. Thus, these studies showed the dual effects of common features on consumer choice for a no-choice option. Adding common features may enhance or mitigate no-choice, contradictory as it may sound. Under a prevention focus, adding common features is likely to enhance the no-choice ratio because of increasing mental conflict; under the promotion focus, it is prone to shrink the ratio perhaps because of a "confirmation bias." The research has practical and theoretical implications for marketers, who may need to consider common features carefully in a practical display context according to consumer segmentation (i.e., promotion vs. prevention focus.) Theoretically, the results suggest some meaningful moderator variable between common features and no-choice in that the effect on no-choice option is partly dependent on a regulatory focus. This variable corresponds not only to a chronic perspective but also a situational perspective in our hypothesis domain. Finally, in light of some shortcomings in the research, such as overlooked attribute importance, low ratio of no-choice, or the external validity issue, we hope it influences future studies to explore the little-known world of the "no-choice option."

• Journal of Information Technology Applications and Management
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• v.24 no.4
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• pp.93-115
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• 2017

The ability of smartphones to facilitate various services like mobile banking, e-commerce and mobile payments has made them part of consumers' lives. Conjoint analysis (CA) is a marketing research approach used to assess how consumers' preferences for products or services develop. The potential applications of CA are numerous in consumer electronics, banking and insurance services, job selection and workplace loyalty, consumer packaged goods, and travel and tourism. Choice-Based Conjoint (CBC) analysis is the most commonly used CA approach in marketing research. The purpose of this study is to utilise CBC analysis to investigate the relative importance of smartphone attributes that influence consumer smartphone preference. An experiment was designed using Sawtooth CBC Software. 326 students attempted the online survey. Utility values were derived by Hierarchical Bayes (HB) estimation and used to explain consumers' smartphone preferences. All the six attributes used for the study were found to significantly influence smartphone preference. Smartphone brand was the most important, followed by the price, camera, RAM, battery life, and storage. This study is one of the first to use Sawtooth CBC analysis to assess consumer smartphone preference based on the six attributes. We provide implications for the development of new smartphones based on attributes.

• Management Science and Financial Engineering
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• v.20 no.2
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• pp.27-31
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• 2014

This paper studies the assortment optimization problem in online retailing by using a multinomial logit model in order to take consumer choice behavior into account. We focus on two unique features of online purchase behavior: first, there exists increased amount of uncertainty (e.g., size and color of merchandize) in online shopping as customers cannot experience merchandize directly. This uncertainty is captured by the scale parameter of a Gumbel distribution; second, online shopping entails unique shopping-related disutility (e.g., waiting time for delivery and security concerns) compared to offline shopping. This disutility is controlled by the changes in the observed part of utility function in our model. The impact of changes in uncertainty and disutility on the expected profit does not exhibit obvious structure: the expected profit may increase or decrease depending on the assortment. However, by analyzing the structure of the optimal assortment based on convexity property of the profit function, we show that the cardinality of the optimal assortment decreases and the maximum expected profit increases as uncertainty or disutility decreases. Therefore, our study suggests that it is important for managers of online retailing to reduce uncertainty and disutility involved in online purchase process.

• Journal of Distribution Science
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• v.11 no.5
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• pp.63-76
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• 2013

Purpose - For the past several decades, behavioral economics or behavioral decision theory has undergone rapid development. This study provides a critical review of the development of behavioral economics with a focus on what are deemed to be core theories in the field. Starting from the utility function proposed by Daniel Bernoulli in the 18th century, the development history of utility functions until the emergence of the prospect theory is thoroughly reviewed. Some of the experimental results violating the traditionally assumed utility function and supporting the prospect theory value function are summarized. The most representative principles of rational choice are transitivity, independence from irrelevant alternatives (IIA), and regularity. The development of behavioral economics has been triggered by finding counter-examples to these principles. Some of the choice behaviors discussed in this study as counter-examples to the traditional theories of rational choice are the St. Petersburg paradox; the Allais paradox; gambling behavior; and the various context effects including the similarity effect, attraction effect, and the compromise effect. The Elimination-by-Aspects (EBA) model, which was proposed as an explanation for the similarity effect, is discussed in detail as well. Based on the literature review and further analysis, this study summarizes the relationship between the context effects, prospect theory, and EBA model. Research design, data, and methodology - This study provides an extensive literature review on several important theories in the field of behavioral decision theory and adds some critical comments to the theories and the relationships among them. This study first reviews the development of utility functions. Daniel Bernoulli introduced the concept of utility function to solve the St. Petersburg paradox. In the mid-20th century, Herbert Simon proposed the "satisficing" heuristic and presented a value function with a shape different from traditional utility functions. This study highlights the strengths and weaknesses of several utility functions proposed until the emergence of the prospect theory value function. Results - This study posits that prospect theory and EBA model are the two most important theories in the field of behavioral decision theory. They can explain various choice behaviors that traditional utility maximization analysis has been unable to. The application of these models to various fields is further increasing nowadays. This study explains how prospect theory and the EBA model can be used to explain the context effects. Conclusions - The traditional economic theory relies on a single variable called "utility" in explaining consumer choice. However, this study argues that, in investigating consumer choice, several other variables should also be considered. These are the similarity among alternatives, an alternative's prototypicality within the category, the dominance relationship between alternatives, and the reference point in evaluating alternatives. Due to the development of behavioral economics, we are now closer to a more complete understanding of consumer choice behavior than in the past when we had only a single tool called utility.

• Journal of the Korean Society of Clothing and Textiles
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• v.36 no.8
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• pp.837-848
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• 2012

This study examines how the overseas residence experience of Korean consumers influences the relationship of global fashion brand knowledge and brand choice confidence. We contrast two kinds of consumer brand knowledge, using the concepts of Alba and Hutchinson's expertise and familiarity. Considering the effect of positive affect on intuitive information processing, the present study investigated the role of positive affect in consumer brand knowledge and brand choice confidence link. The proposed model was tested with structural-equation analysis. The results show that expertise and familiarity effect the positive affect. Positive affect, in turn, influences brand choice confidence. The results indicate that the processes underlying global fashion brand knowledge and brand choice confidence link are different between the consumers with overseas residence experience for more than a year and the consumers without it. The route from expertise to positive affect has a significant impact on the consumers with overseas residence experience but not on the consumers without it; however, the route from familiarity to positive affect and the path from positive affect to brand choice confidence have a greater impact on the consumers without overseas residence experience than the consumers with it. We find that the consumers with overseas residence experience favor expertise in the process underlying global fashion brand knowledge and brand choice confidence link, whereas the consumers without it favor familiarity and affect based thought.

• Korean Journal of Agricultural Science
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• v.38 no.2
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• pp.361-368
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• 2011

This study aims to examine the consumer preference for packaged bean curd that takes a growing public interest. Specifically, this study tried to examine which is more important - the place of origin of the raw bean or the environmental-friendliness of the raw bean. Surveys were conducted to obtain information, such as the consumer evaluation for food safety on imported food products from China and the consumer perception of Chinese organic food products, Using the binary probit model, the relationship between consumer's choice of packaged bean curd and potentially important factors that can affect the consumer's choice was analyzed. A summary of this research and some policy implications follow. The results of this study can be used as the basic guideline as to how to extend the safety of imported food products, in general, and how to further develop the packaged bean curd industry in Korea, in particular.

• Journal of Distribution Science
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• v.13 no.3
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• pp.79-91
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• 2015

Purpose - First, the study identifies and analyzes consumer preferences with regard to health foods and supplements. Second, it identifies and analyzes consumer preferences with regard to the properties of Vitamin C supplements. Third, in order to provide a basic data for the development of Vitamin C supplements and to measure how consumers value the properties of different Vitamin C products, a consumer survey was conducted through the choice-based conjoint model. Based on the results, the research estimates consumers' relative product-related priorities as well as price levels and willingness to pay (WTP) for different product types, and makes suggestions regarding consumer-oriented new product development and progressive directions for the successful launch of health foods and supplements. Research design, data, and methodology - This study aims to define the attributes of health foods and supplements based on several characteristics including their natural ingredients, product price, product originality, natural ingredient content, and additional functional ingredients, and makes suggestions regarding strategic market pricing and product development for health foods and supplements according to customer attitudes and characteristics. The research used choice-based conjoint analysis methodology based on the Multinomial Logic Model and collected 94 questionnaires filled out by users of Korean Vitamin C supplements. Results - Product price is the most influential factor among the five analyzed properties. When consumers buy Vitamin C products, the relative significance level of four of the examined properties is as follows: 40.9% for product price, 23.3% for product originality, 21.9% for natural ingredient content, and 13.9% for additional functional ingredients. Vitamin C content is excluded as it is not a statistically significant factor. It is interesting that supplement manufacturers and retailers consider Vitamin C content to be very important whereas consumers do not regard it as an important factor at the time of purchase. The results for the marginal willingness to pay (MWTP) for each property of Vitamin C supplements show that consumers are willing to pay an additional 11,146 Korean won for a 50% increase in the natural ingredient content. With regard to product originality, consumers are willing to pay an additional 11,301 Korean won for products manufactured in Europe than for products manufactured in China. Moreover, consumers show a greater preference for products manufactured in Korea than in Europe. However, consumers are not willing to pay more for additional Vitamin C or additional functional ingredients added to Vitamin C products. Conclusions - According to the results of consumer research on Vitamin C supplements, which represent a popular health food supplement in Korea, most Korean health food and supplement companies are not consumer- or market-oriented when developing new products. Companies gather information from either R&D specialists or sales managers and their opinions are highly reflected in new product development. The study's results will help companies recognize the importance of understanding consumers' unmet needs in advance to develop new products in the future.

• Journal of Distribution Research
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• v.15 no.5
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• pp.81-102
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• 2010

The present study analyzes the choice factors and possibility of traditional and other competing markets through consumer behavior analyses in order to suggest factors that can help reactivate traditional markets. Hence, Multinomial Logit Model is used as it is an optimum model to understand discrete selection. The results suggested some tendencies regarding traditional market. For example, traditional market is more activated when the market is large and has more parking spaces, and when the level of consumer satisfaction is high. While, increased travel distance and time have negative effects on visitor's choice. Governmental supports are turned out to have less to do with the consumer attraction. People with higher incomes tend to prefer other types of market. The results also suggested there is more likelihood of traditional markets being reactivated if the market is not fiercely competing with other types of markets. Internet market is ranked top in consumer's choice possibility, while traditional market is ranked at the bottom. The plausible factors to reactivate traditional market were physical factors(including increasing shops and parking facilities), which is followed by governmental support.

• The Journal of the Korea Contents Association
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• v.10 no.5
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• pp.210-219
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• 2010

Consumers differ in both horizontally and vertically. Market segmentation aims to divide horizontally different (or heterogeneous) consumers into more similar (or homogeneous) small segments. A specific consumer, however, may differ in vertically. He (or she) may belong to a different market segment from another one where he (or she) belonged to before. In consumer panel data, the vertical difference can be observed by his (or her) choice among brand alternatives are changing over time. The consumer's vertical difference has been defined as 'dynamics'. In this research, we have developed a binary probit model with random-walk coefficients to capture the consumer's dynamics. With an application to a consumer panel data, we have examined how have the random-walk coefficients changed over time.

• The Journal of Fisheries Business Administration
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• v.40 no.2
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• pp.27-48
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• 2009

The objective of this paper is to estimate consumer's marginal willingness to pay(MWTP) for cold chain system attributes of mackerel using choice experiment questionnaires. The survey data were analyzed by conjoint analysis method with multinominal logit model. The five cold chain system attributes with $2{\sim}4$ attribute levels were considered : low temperature safekeeping of fishing boats, a kind of transport truck and packing box, using degree of low temperature facility in distribution, mackerel price per fish(1kg). At least 827 people were asked to participate in the survey. The major findings and implications of this study can be summarized as follows : The estimated multinominal logit model is statistically significant and the total consumers willingness to pay for the improved cold chain system attributes is 6,476 won (per kg). Compared with the base price(2,500 won/kg), the estimated MWTP is 2.5 times higher than the base price. Therefore, the consumer has a willingness to pay for the fresh and safe fish products, even though more money is paid. To satisfy the consumer's needs, cold chain system is necessary in point of long-term. In this reason, The government's policy support is needed for promoting cold chain system in fishery, and a master plan should be prepared.