• Journal of Global Scholars of Marketing Science
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• v.18 no.3
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• pp.59-88
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• 2008

Digital Convergence means integration between industry, technology, and contents, and in marketing, it usually comes with creation of new types of product and service under the base of digital technology as digitalization progress in electro-communication industries including telecommunication, home appliance, and computer industries. One can see digital convergence not only in instruments such as PC, AV appliances, cellular phone, but also in contents, network, service that are required in production, modification, distribution, re-production of information. Convergence in contents started around 1990. Convergence in network and service begins as broadcasting and telecommunication integrates and DMB(digital multimedia broadcasting), born in May, 2005 is the symbolic icon in this trend. There are some positive and negative expectations about DMB. The reason why two opposite expectations exist is that DMB does not come out from customer's need but from technology development. Therefore, customers might have hard time to interpret the real meaning of DMB. Time is quite critical to a high tech product, like DMB because another product with same function from different technology can replace the existing product within short period of time. If DMB does not positioning well to customer's mind quickly, another products like Wibro, IPTV, or HSPDA could replace it before it even spreads out. Therefore, positioning strategy is critical for success of DMB product. To make correct positioning strategy, one needs to understand how consumer interprets DMB and how consumer's interpretation can be changed via communication strategy. In this study, we try to investigate how consumer perceives a new product, like DMB and how AD strategy change consumer's perception. More specifically, the paper segment consumers into sub-groups based on their DMB perceptions and compare their characteristics in order to understand how they perceive DMB. And, expose them different printed ADs that have messages guiding consumer think DMB in specific ways, either cellular phone or personal TV. Research Question 1: Segment consumers according to perceptions about DMB and compare characteristics of segmentations. Research Question 2: Compare perceptions about DMB after AD that induces categorization of DMB in direction for each segment. If one understand and predict a direction in which consumer perceive a new product, firm can select target customers easily. We segment consumers according to their perception and analyze characteristics in order to find some variables that can influence perceptions, like prior experience, usage, or habit. And then, marketing people can use this variables to identify target customers and predict their perceptions. If one knows how customer's perception is changed via AD message, communication strategy could be constructed properly. Specially, information from segmented customers helps to develop efficient AD strategy for segment who has prior perception. Research framework consists of two measurements and one treatment, O1 X O2. First observation is for collecting information about consumer's perception and their characteristics. Based on first observation, the paper segment consumers into two groups, one group perceives DMB similar to Cellular phone and the other group perceives DMB similar to TV. And compare characteristics of two segments in order to find reason why they perceive DMB differently. Next, we expose two kinds of AD to subjects. One AD describes DMB as Cellular phone and the other Ad describes DMB as personal TV. When two ADs are exposed to subjects, consumers don't know their prior perception of DMB, in other words, which subject belongs 'similar-to-Cellular phone' segment or 'similar-to-TV' segment? However, we analyze the AD's effect differently for each segment. In research design, final observation is for investigating AD effect. Perception before AD is compared with perception after AD. Comparisons are made for each segment and for each AD. For the segment who perceives DMB similar to TV, AD that describes DMB as cellular phone could change the prior perception. And AD that describes DMB as personal TV, could enforce the prior perception. For data collection, subjects are selected from undergraduate students because they have basic knowledge about most digital equipments and have open attitude about a new product and media. Total number of subjects is 240. In order to measure perception about DMB, we use indirect measurement, comparison with other similar digital products. To select similar digital products, we pre-survey students and then finally select PDA, Car-TV, Cellular Phone, MP3 player, TV, and PSP. Quasi experiment is done at several classes under instructor's allowance. After brief introduction, prior knowledge, awareness, and usage about DMB as well as other digital instruments is asked and their similarities and perceived characteristics are measured. And then, two kinds of manipulated color-printed AD are distributed and similarities and perceived characteristics for DMB are re-measured. Finally purchase intension, AD attitude, manipulation check, and demographic variables are asked. Subjects are given small gift for participation. Stimuli are color-printed advertising. Their actual size is A4 and made after several pre-test from AD professionals and students. As results, consumers are segmented into two subgroups based on their perceptions of DMB. Similarity measure between DMB and cellular phone and similarity measure between DMB and TV are used to classify consumers. If subject whose first measure is less than the second measure, she is classified into segment A and segment A is characterized as they perceive DMB like TV. Otherwise, they are classified as segment B, who perceives DMB like cellular phone. Discriminant analysis on these groups with their characteristics of usage and attitude shows that Segment A knows much about DMB and uses a lot of digital instrument. Segment B, who thinks DMB as cellular phone doesn't know well about DMB and not familiar with other digital instruments. So, consumers with higher knowledge perceive DMB similar to TV because launching DMB advertising lead consumer think DMB as TV. Consumers with less interest on digital products don't know well about DMB AD and then think DMB as cellular phone. In order to investigate perceptions of DMB as well as other digital instruments, we apply Proxscal analysis, Multidimensional Scaling technique at SPSS statistical package. At first step, subjects are presented 21 pairs of 7 digital instruments and evaluate similarity judgments on 7 point scale. And for each segment, their similarity judgments are averaged and similarity matrix is made. Secondly, Proxscal analysis of segment A and B are done. At third stage, get similarity judgment between DMB and other digital instruments after AD exposure. Lastly, similarity judgments of group A-1, A-2, B-1, and B-2 are named as 'after DMB' and put them into matrix made at the first stage. Then apply Proxscal analysis on these matrixes and check the positional difference of DMB and after DMB. The results show that map of segment A, who perceives DMB similar as TV, shows that DMB position closer to TV than to Cellular phone as expected. Map of segment B, who perceive DMB similar as cellular phone shows that DMB position closer to Cellular phone than to TV as expected. Stress value and R-square is acceptable. And, change results after stimuli, manipulated Advertising show that AD makes DMB perception bent toward Cellular phone when Cellular phone-like AD is exposed, and that DMB positioning move towards Car-TV which is more personalized one when TV-like AD is exposed. It is true for both segment, A and B, consistently. Furthermore, the paper apply correspondence analysis to the same data and find almost the same results. The paper answers two main research questions. The first one is that perception about a new product is made mainly from prior experience. And the second one is that AD is effective in changing and enforcing perception. In addition to above, we extend perception change to purchase intention. Purchase intention is high when AD enforces original perception. AD that shows DMB like TV makes worst intention. This paper has limitations and issues to be pursed in near future. Methodologically, current methodology can't provide statistical test on the perceptual change, since classical MDS models, like Proxscal and correspondence analysis are not probability models. So, a new probability MDS model for testing hypothesis about configuration needs to be developed. Next, advertising message needs to be developed more rigorously from theoretical and managerial perspective. Also experimental procedure could be improved for more realistic data collection. For example, web-based experiment and real product stimuli and multimedia presentation could be employed. Or, one can display products together in simulated shop. In addition, demand and social desirability threats of internal validity could influence on the results. In order to handle the threats, results of the model-intended advertising and other "pseudo" advertising could be compared. Furthermore, one can try various level of innovativeness in order to check whether it make any different results (cf. Moon 2006). In addition, if one can create hypothetical product that is really innovative and new for research, it helps to make a vacant impression status and then to study how to form impression in more rigorous way.

• Journal of Intelligence and Information Systems
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• v.23 no.4
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• pp.77-110
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• 2017

Recently, the diversification and individualization of consumption patterns through the web and mobile devices based on the Internet have been rapid. As this happens, the efficient operation of the offline store, which is a traditional distribution channel, has become more important. In order to raise both the sales and profits of stores, stores need to supply and sell the most attractive products to consumers in a timely manner. However, there is a lack of research on which SKUs, out of many products, can increase sales probability and reduce inventory costs. In particular, if a company sells products through multiple in-store stores across multiple locations, it would be helpful to increase sales and profitability of stores if SKUs appealing to customers are recommended. In this study, the recommender system (recommender system such as collaborative filtering and hybrid filtering), which has been used for personalization recommendation, is suggested by SKU recommendation method of a store unit of a distribution company that handles a homogeneous brand through a plurality of sales stores by country and region. We calculated the similarity of each store by using the purchase data of each store's handling items, filtering the collaboration according to the sales history of each store by each SKU, and finally recommending the individual SKU to the store. In addition, the store is classified into four clusters through PCA (Principal Component Analysis) and cluster analysis (Clustering) using the store profile data. The recommendation system is implemented by the hybrid filtering method that applies the collaborative filtering in each cluster and measured the performance of both methods based on actual sales data. Most of the existing recommendation systems have been studied by recommending items such as movies and music to the users. In practice, industrial applications have also become popular. In the meantime, there has been little research on recommending SKUs for each store by applying these recommendation systems, which have been mainly dealt with in the field of personalization services, to the store units of distributors handling similar brands. If the recommendation method of the existing recommendation methodology was 'the individual field', this study expanded the scope of the store beyond the individual domain through a plurality of sales stores by country and region and dealt with the store unit of the distribution company handling the same brand SKU while suggesting a recommendation method. In addition, if the existing recommendation system is limited to online, it is recommended to apply the data mining technique to develop an algorithm suitable for expanding to the store area rather than expanding the utilization range offline and analyzing based on the existing individual. The significance of the results of this study is that the personalization recommendation algorithm is applied to a plurality of sales outlets handling the same brand. A meaningful result is derived and a concrete methodology that can be constructed and used as a system for actual companies is proposed. It is also meaningful that this is the first attempt to expand the research area of the academic field related to the existing recommendation system, which was focused on the personalization domain, to a sales store of a company handling the same brand. From 05 to 03 in 2014, the number of stores' sales volume of the top 100 SKUs are limited to 52 SKUs by collaborative filtering and the hybrid filtering method SKU recommended. We compared the performance of the two recommendation methods by totaling the sales results. The reason for comparing the two recommendation methods is that the recommendation method of this study is defined as the reference model in which offline collaborative filtering is applied to demonstrate higher performance than the existing recommendation method. The results of this model are compared with the Hybrid filtering method, which is a model that reflects the characteristics of the offline store view. The proposed method showed a higher performance than the existing recommendation method. The proposed method was proved by using actual sales data of large Korean apparel companies. In this study, we propose a method to extend the recommendation system of the individual level to the group level and to efficiently approach it. In addition to the theoretical framework, which is of great value.