• Title/Summary/Keyword: Product multinomial

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Correlation among Ownership of Home Appliances Using Multivariate Probit Model (다변량 프로빗 모형을 이용한 가전제품 구매의 상관관계 분석)

  • Kim, Chang-Seob;Shin, Jung-Woo;Lee, Mi-Suk;Lee, Jong-Su
    • Journal of Global Scholars of Marketing Science
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    • v.19 no.2
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    • pp.17-26
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    • 2009
  • As the lifestyle of consumers changes and the need for various products increases, new products are being developed in the market. Each household owns various home appliances which are purchased through the choice of a decision maker. These appliances include not only large-sized products such as TV, refrigerator, and washing machine, but also small-sized products such as microwave oven and air cleaner. There exists latent correlation among possession of home appliances, even though they are purchased independently. The purpose of this research is to analyze the effect of demographic factors on the purchase and possession of each home appliances, and to derive some relationships among various appliances. To achieve this purpose, the present status on the possession of each home appliances are investigated through consumer survey data on the electric and energy product. And a multivariate probit(MVP) model is applied for the empirical analysis. From the estimation results, some appliances show a substitutive or complementary pattern as expected, while others which look apparently unrelated have correlation by co-incidence. This research has several advantages compared to previous literatures on home appliances. First, this research focuses on the various products which are purchased by each household, while previous researches such as Matsukawa and Ito(1998) and Yoon(2007) focus just on a particular product. Second, the methodology of this research can consider a choice process of each product and correlation among products simultaneously. Lastly, this research can analyze not only a substitutive or complementary relationship in the same category, but also the correlation among products in the different categories. As the data on the possession of home appliances in each household has a characteristic of multiple choice, not a single choice, a MVP model are used for the empirical analysis. A MVP model is derived from a random utility model, and has an advantage compared to a multinomial logit model in that correlation among error terms can be derive(Manchanda et al., 1999; Edwards and Allenby, 2003). It is assumed that the error term has a normal distribution with zero mean and variance-covariance matrix ${\Omega}$. Hence, the sign and value of correlation coefficients means the relationship between two alternatives(Manchanda et al., 1999). This research uses the data of 'TEMEP Household ICT/Energy Survey (THIES) 2008' which is conducted by Technology Management, Economics and Policy Program in Seoul National University. The empirical analysis of this research is accomplished in two steps. First, a MVP model with demographic variables is estimated to analyze the effect of the characteristics of household on the purchase of each home appliances. In this research, some variables such as education level, region, size of family, average income, type of house are considered. Second, a MVP model excluding demographic variables is estimated to analyze the correlation among each home appliances. According to the estimation results of variance-covariance matrix, each households tend to own some appliances such as washing machine-refrigerator-cleaner-microwave oven, and air conditioner-dish washer-washing machine and so on. On the other hand, several products such as analog braun tube TV-digital braun tube TV and desktop PC-portable PC show a substitutive pattern. Lastly, the correlation map of home appliances are derived using multi-dimensional scaling(MDS) method based on the result of variance-covariance matrix. This research can provide significant implications for the firm's marketing strategies such as bundling, pricing, display and so on. In addition, this research can provide significant information for the development of convergence products and related technologies. A convergence product can decrease its market uncertainty, if two products which consumers tend to purchase together are integrated into it. The results of this research are more meaningful because it is based on the possession status of each household through the survey data.

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Analysis of Chinese Consumer Preference of Country of Origin for Apples based on National Organic Certification (사과의 국가별 유기인증 결합에 대한 중국 소비자 선호분석)

  • Kwon, Jae-Hyun;Kim, Jeong-Nyeon;Hong, Na-Kyoung;Kim, Tae-Kyun
    • Current Research on Agriculture and Life Sciences
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    • v.32 no.4
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    • pp.225-230
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    • 2014
  • This study investigates the effect of organic certification of apples on consumer preference in China as a way to support the expanded export of Korean apples to China. A choice experiment was designed to analyze the apple consumption in China. A total of 298 Chinese consumers answered the survey, and multinomial logit models were used to analyze the results. Organic certification was identified as an important determinant of consumer preference for apples in China, affecting both the evaluation and choice of country of origin. The results also indicated that Korean organic certification significantly increased the probability of Chinese consumers choosing Korean apples. Thus, organic certification by the Korean government should be strengthened to promote apple exports to China, plus the results of this study may provide useful information to promote agricultural product exports and improve the organic certification system.

Consumer Preference Analysis of Korean Red Ginseng Tonic for Revitalizing Korean Ginseng Industry (국내 인삼산업 활성화를 위한 홍삼토닉 소비자 선호분석)

  • Jeong, Jae Won;Lim, Sungsoo;Kim, Tae-Kyun;Kim, Seung Gyu
    • Journal of agriculture & life science
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    • v.52 no.6
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    • pp.155-162
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    • 2018
  • This study attempts to analyze the consumers' preference on Korean Red Ginseng Tonic, which is an essential product to revitalize Korean ginseng industry, using choice experiment method. The attributes used in the choice experiment were the ginseng age, good agricultural products(GAP), sugar, and price. A total of 1,796 experiments were collected and the value of each preferred attributes was estimated using a multinomial logistic model. The result shows that the products made from six-year-old and GAP(Good Agriculture Practice) approved Korean ginseng with less sugar were preferred. These estimated monetary values of marginal willingness to pay were about 94,000 KRW, 89,000 KRW, 5,000 KRW, respectively. Thus, the efforts to introduce and advertize GAP approved ginseng while developing new products with preferred attributes by general publics are necessary in the short run. In addition, we may need to consider developing the way to promote products using 4- and 5-year-old ginsengs, which are relatively underestimated in their health effectiveness but highly productive for farmers in the long run.