• Journal of Distribution Research
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• v.16 no.4
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• pp.65-93
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• 2011

As relationship between buyer and seller has been brought closer and long-term relationship has been more important in B2B markets, the importance of service and service convenience increases as well as product. In homogeneous markets, where service offerings are similar and therefore not key competitive differentiator, providing greater convenience may enable a competitive advantage. Service convenience, as conceptualized by Berry et al. (2002), is defined as the consumers' time and effort perceptions related to buying or using a service. For this reason, B2B customers are interested in how fast the service is provided and how much save non-monetary cost like time or effort by the service convenience along with service quality. Therefore, this study attempts to investigate the impact of service convenience on relationship factors such as relationship satisfaction, relationship commitment, and relationship performance. The purpose of this study is to find out whether service convenience can be a new antecedent of relationship quality and relationship performance. In addition, this study tries to examine how five-dimensional service convenience constructs (decision convenience, access convenience, transaction convenience, benefit convenience, post-benefit convenience) affect customers' relationship satisfaction, relationship commitment, and relationship performance. The service convenience comprises five fundamental components - decision convenience (the perceived time and effort costs associated with service purchase or use decisions), access convenience(the perceived time and effort costs associated with initiating service delivery), transaction convenience(the perceived time and effort costs associated with finalizing the transaction), benefit convenience(the perceived time and effort costs associated with experiencing the core benefits of the offering) and post-benefit convenience (the perceived time and effort costs associated with reestablishing subsequent contact with the firm). Earlier studies of perceived service convenience in the industrial market are none. The conventional studies that have dealt with service convenience have usually been made in the consumer market, or they have dealt with convenience aspects in the service process. This service convenience measure for consumer market can be useful tool to estimate service quality in B2B market. The conceptualization developed by Berry et al. (2002) reflects a multistage, experiential consumption process in which evaluations of convenience vary at each stage. For this reason, the service convenience measure is good for B2B service environment which has complex processes and various types. Especially when categorizing B2B service as sequential stage of service delivery like Kumar and Kumar (2004), the Berry's service convenience measure which reflect sequential flow of service deliveries suitable to establish B2B service convenience. For this study, data were gathered from respondents who often buy business service and analyzed by structural equation modeling. The sample size in the present study is 119. Composite reliability values and average variance extracted values were examined for each variable to have reliability. We determine whether the measurement model supports the convergent validity by CFA, and discriminant validity was assessed by examining the correlation matrix of the constructs. For each pair of constructs, the square root of the average variance extracted exceeded their correlations, thus supporting the discriminant validity of the constructs. Hypotheses were tested using the Smart PLS 2.0 and we calculated the PLS path values and followed with a bootstrap re-sampling method to test the hypotheses. Among the five dimensional service convenience constructs, four constructs (decision convenience, transaction convenience, benefit convenience, post-benefit convenience) affected customers' positive relationship satisfaction, relationship commitment, and relationship performance. This result means that service convenience is important cue to improve relationship between buyer and seller. One of the five service convenience dimensions, access convenience, does not affect relationship quality and performance, which implies that the dimension of service convenience is not important factor of cumulative satisfaction. The Cumulative satisfaction can be distinguished from transaction-specific customer satisfaction, which is an immediate post-purchase evaluative judgment or an affective reaction to the most recent transactional experience with the firm. Because access convenience minimizes the physical effort associated with initiating an exchange, the effect on relationship satisfaction similar to cumulative satisfaction may be relatively low in terms of importance than transaction-specific customer satisfaction. Also, B2B firms focus on service quality, price, benefit, follow-up service and so on than convenience of time or place in service because it is relatively difficult to change existing transaction partners in B2B market compared to consumer market. In addition, this study using partial least squares methods reveals that customers' satisfaction and commitment toward relationship has mediating role between the service convenience and relationship performance. The result shows that management and investment to improve service convenience make customers' positive relationship satisfaction, and then the positive relationship satisfaction can enhance the relationship commitment and relationship performance. And to conclude, service convenience management is an important part of successful relationship performance management, and the service convenience is an important antecedent of relationship between buyer and seller such as the relationship commitment and relationship performance. Therefore, it has more important to improve relationship performance that service providers enhance service convenience although competitive service development or service quality improvement is important. Given the pressure to provide increased convenience, it is not surprising that organizations have made significant investments in enhancing the convenience aspect of their product and service offering.

• Journal of Radiation Protection and Research
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• v.39 no.3
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• pp.142-149
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• 2014

Korea conducts a national health screening program to improve and check-up on public health and in recent years, the screening usage has been increased. Given the increased screening usage for radiographic exams, this study predicts the frequency of using radiographic exams and the exposure dose. This study estimates the usage of radiographic exams by isolating radiographic exams from the 2011 analysis of the national health insurance corporation, and estimates the public exposure dose by applying each procedure's dose table from UNSCEAR 2008. As a result of the analysis, in the 2011 National Health Screening, the average exposure dose per person is assumed to be 0.57 mSv, and depending on the type of screening program from the radiographic exam, an examinee could be exposed to between 0.2 mSv and 11.081 mSv. The frequency of using radiographic exposure was found to be 16,005,914 and the exposure dose was 6,311.76 person-Sv. The most frequent exam is the Chest X-ray, which was performed 1,070,567 (69.17%), and the UGI has the highest exposure dose at 5,217.94 person-Sv (82.67%). The outcome is categorized based on gender and age, excluding those under 39 years old. In all age groups, the screening usage and exposure dose are higher in females than in males. In particular, females between 50 and 54 years old have the highest screening usage (1,674,787, 10.5%) and exposure dose (701.59 person-Sv, 11.1%). As UGI accounts for 82.76% of procedures, except when done for medical purposes, if the government supports a voluntary UGI exam (which includes the UGI exam in the National Screening Program) or abolishes it completely, as seen overseas, the cost-effectiveness and validity of the UGI exam, as well as the exposure dose from the National Screening Program will all decrease significantly.

• Journal of agricultural medicine and community health
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• v.25 no.2
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• pp.427-440
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• 2000

A comparative study was made about health resources, medical care service statistics and public health service statistics by health subcenters at Jangdong and Jangpyung townships, Jangheung County, Chollanamdo before and after the unification of two health subcenter to improve their function. 1. While two general physicians, one dentist, 4 nurse aids arid one oral hygienist were working at two health subcenters with simple facility with examination room and public health office in 1997 prior to the unification, in 1999 after the unification of two health subcenters 14 staff including a specialist physician, a general physician, a dentist, a herb hygienist, a radiology technician and a physical therapist were working in the new health subcenters equipped with appropriate facilities in two storey building. 2. In 1997 before the unification the yearly total income of two health subcenters was 78,815 thousand won(about 14,000 won per capita) and the amount was 140,376 thousand won(about 25,000 won per capita) in 1999 after the unification. And the income was used for operation of health subcenters excluding personnel expense. 3. While 90.5% of visitors to the health subcenters came for general medical care, and 91.6% came for the revisit before the unification, after the unification 71.2% came for general medical care, 10.8% for dental care, 16.5% for oriental physician's care, 29.7% for the first visit and 70.3% for revisit. Most common problem cared for was musculoskeletal disorder like arthralgia. Average treatment cost per person per month was 9,363 won before the unification and 8,309 won after the unification. 4. Through the comparison of execution rate of public health services before and after the unification. the practice rate of most health service among target population including visiting service for chronic illness, maternal and child health service and immunization service increased after the unification. The practice rate of tuberculosis control service, hypertension control and diabetes management was a little decreased. In conclusion, continuous effort to satisfy all persons in two townships and evaluation are necessary to coincide with the spirit of unification of two health subcenters.

• Journal of Internet Computing and Services
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• v.16 no.2
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• pp.49-55
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• 2015

According to the statistics of traffic accidents over recent 5 years, traffic accidents during the night times happened more than the day times. There are various causes to occur traffic accidents and the one of the major causes is inappropriate or missing street lights that make driver's sight confused and causes the traffic accidents. In this paper, with smartphones, we designed and implemented a lane luminance measurement application which stores the information of driver's location, driving, and lane luminance into database in real time to figure out the inappropriate street light facilities and the area that does not have any street lights. This application is implemented under Native C/C++ environment using android NDK and it improves the operation speed than code written in Java or other languages. To measure the luminance of road, the input image with RGB color space is converted to image with YCbCr color space and Y value returns the luminance of road. The application detects the road lane and calculates the road lane luminance into the database sever. Also this application receives the road video image using smart phone's camera and improves the computational cost by allocating the ROI(Region of interest) of input images. The ROI of image is converted to Grayscale image and then applied the canny edge detector to extract the outline of lanes. After that, we applied hough line transform method to achieve the candidated lane group. The both sides of lane is selected by lane detection algorithm that utilizes the gradient of candidated lanes. When the both lanes of road are detected, we set up a triangle area with a height 20 pixels down from intersection of lanes and the luminance of road is estimated from this triangle area. Y value is calculated from the extracted each R, G, B value of pixels in the triangle. The average Y value of pixels is ranged between from 0 to 100 value to inform a luminance of road and each pixel values are represented with color between black and green. We store car location using smartphone's GPS sensor into the database server after analyzing the road lane video image with luminance of road about 60 meters ahead by wireless communication every 10 minutes. We expect that those collected road luminance information can warn drivers about safe driving or effectively improve the renovation plans of road luminance management.

• Proceedings of the Korea Water Resources Association Conference
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• 2015.05a
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• pp.237-237
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• 2015

The district of Marlborough has had more than its share of river management projects over the past 150 years, each one uniquely affecting the geomorphology and flood hazard of the Wairau Plains. A major early project was to block the Opawa distributary channel at Conders Bend. The Opawa distributary channel took a third and more of Wairau River floodwaters and was a major increasing threat to Blenheim. The blocking of the Opawa required the Wairau and Lower Wairau rivers to carry greater flood flows more often. Consequently the Lower Wairau River was breaking out of its stopbanks approximately every seven years. The idea of diverting flood waters at Tuamarina by providing a direct diversion to the sea through the beach ridges was conceptualised back around the 1920s however, limits on resources and machinery meant the mission of excavating this diversion didn't become feasible until the 1960s. In 1964 a 10 m wide pilot channel was cut from the sea to Tuamarina with an initial capacity of $700m^3/s$. It was expected that floods would eventually scour this 'Wairau Diversion' to its design channel width of 150 m. This did take many more years than initially thought but after approximately 50 years with a little mechanical assistance the Wairau Diversion reached an adequate capacity. Using the power of the river to erode the channel out to its design width and depth was a brilliant idea that saved many thousands of dollars in construction costs and it is somewhat ironic that it is that very same concept that is now being used to deal with the aggradation problem that the Wairau Diversion has caused. The introduction of the Wairau Diversion did provide some flood relief to the lower reaches of the river but unfortunately as the Diversion channel was eroding and enlarging the Lower Wairau River was aggrading and reducing in capacity due to its inability to pass its sediment load with reduced flood flows. It is estimated that approximately $2,000,000m^3$ of sediment was deposited on the bed of the Lower Wairau River in the time between the Diversion's introduction in 1964 and 2010, raising the Lower Wairau's bed upwards of 1.5m in some locations. A numerical morphological model (MIKE-11 ST) was used to assess a number of options which led to the decision and resource consent to construct an erodible (fuse plug) bank at the head of the Wairau Diversion to divert more frequent scouring-flows ($+400m^3/s$)down the Lower Wairau River. Full control gates were ruled out on the grounds of expense. The initial construction of the erodible bank followed in late 2009 with the bank's level at the fuse location set to overtop and begin washing out at a combined Wairau flow of $1,400m^3/s$ which avoids berm flooding in the Lower Wairau. In the three years since the erodible bank was first constructed the Wairau River has sustained 14 events with recorded flows at Tuamarina above $1,000m^3/s$ and three of events in excess of $2,500m^3/s$. These freshes and floods have resulted in washout and rebuild of the erodible bank eight times with a combined rebuild expenditure of $80,000. Marlborough District Council's Rivers & Drainage Department maintains a regular monitoring program for the bed of the Lower Wairau River, which consists of recurrently surveying a series of standard cross sections and estimating the mean bed level (MBL) at each section as well as an overall MBL change over time. A survey was carried out just prior to the installation of the erodible bank and another survey was carried out earlier this year. The results from this latest survey show for the first time since construction of the Wairau Diversion the Lower Wairau River is enlarging. It is estimated that the entire bed of the Lower Wairau has eroded down by an overall average of 60 mm since the introduction of the erodible bank which equates to a total volume of $260,000m^3$. At a cost of $$0.30/m^3$ this represents excellent value compared to mechanical dredging which would likely be in excess of $$10/m^3$. This confirms that the idea of using the river to enlarge the channel is again working for the Wairau River system and that in time nature's "excavator" will provide a channel capacity that will continue to meet design requirements.

• Journal of Intelligence and Information Systems
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• v.25 no.1
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• pp.139-161
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• 2019

The utilization of the e-commerce market has become a common life style in today. It has become important part to know where and how to make reasonable purchases of good quality products for customers. This change in purchase psychology tends to make it difficult for customers to make purchasing decisions in vast amounts of information. In this case, the recommendation system has the effect of reducing the cost of information retrieval and improving the satisfaction by analyzing the purchasing behavior of the customer. Amazon and Netflix are considered to be the well-known examples of sales marketing using the recommendation system. In the case of Amazon, 60% of the recommendation is made by purchasing goods, and 35% of the sales increase was achieved. Netflix, on the other hand, found that 75% of movie recommendations were made using services. This personalization technique is considered to be one of the key strategies for one-to-one marketing that can be useful in online markets where salespeople do not exist. Recommendation techniques that are mainly used in recommendation systems today include collaborative filtering and content-based filtering. Furthermore, hybrid techniques and association rules that use these techniques in combination are also being used in various fields. Of these, collaborative filtering recommendation techniques are the most popular today. Collaborative filtering is a method of recommending products preferred by neighbors who have similar preferences or purchasing behavior, based on the assumption that users who have exhibited similar tendencies in purchasing or evaluating products in the past will have a similar tendency to other products. However, most of the existed systems are recommended only within the same category of products such as books and movies. This is because the recommendation system estimates the purchase satisfaction about new item which have never been bought yet using customer's purchase rating points of a similar commodity based on the transaction data. In addition, there is a problem about the reliability of purchase ratings used in the recommendation system. Reliability of customer purchase ratings is causing serious problems. In particular, 'Compensatory Review' refers to the intentional manipulation of a customer purchase rating by a company intervention. In fact, Amazon has been hard-pressed for these "compassionate reviews" since 2016 and has worked hard to reduce false information and increase credibility. The survey showed that the average rating for products with 'Compensated Review' was higher than those without 'Compensation Review'. And it turns out that 'Compensatory Review' is about 12 times less likely to give the lowest rating, and about 4 times less likely to leave a critical opinion. As such, customer purchase ratings are full of various noises. This problem is directly related to the performance of recommendation systems aimed at maximizing profits by attracting highly satisfied customers in most e-commerce transactions. In this study, we propose the possibility of using new indicators that can objectively substitute existing customer 's purchase ratings by using RFM multi-dimensional analysis technique to solve a series of problems. RFM multi-dimensional analysis technique is the most widely used analytical method in customer relationship management marketing(CRM), and is a data analysis method for selecting customers who are likely to purchase goods. As a result of verifying the actual purchase history data using the relevant index, the accuracy was as high as about 55%. This is a result of recommending a total of 4,386 different types of products that have never been bought before, thus the verification result means relatively high accuracy and utilization value. And this study suggests the possibility of general recommendation system that can be applied to various offline product data. If additional data is acquired in the future, the accuracy of the proposed recommendation system can be improved.

• Asia Marketing Journal
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• v.13 no.3
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• pp.25-53
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• 2011

This study probes the effect of loyalty program on the customer retention based on the real transaction data(n=2,892) acquired from education service industry. We try to figure out the outcomes of reward program through more than 1 year-long data gathered and analyzed according to quasi-experimental design(i.e., before and after design). We adopt this kinds of research scheme in regard that previous studies measured the effect of loyalty program by dividing the customers into two group(i.e., members vs. non-members) after the firms or stores had started the program. We believe that it might not avoid the self-selection bias. The research questions of this study could be explained such as: First, most research said that the loyalty programs could increase the customer loyalty and contribute to the sustainable growth of company. But there are little confirmation that this promotional tool could be justified in terms of financial perspective. Thus, we are interested in both the retention rate and financial outcomes caused by the introduction of loyalty programs. Second, reward programs target mainly current customer. Especially CRM(customer relationship management) said that it is more profitable for company to build positive relationship with current customer instead of pursuing new customer. And it claims that reward program is excellent means to achieve this goal. For this purpose, we check in this study whether there is a interaction effect between loyalty program and customer type in retaining customer. Third, it is said that dis-satisfied customers are more likely to leave the company than satisfied customers. While, Bolton, Kannan and Bramlett(2000) claimed that reward program could contribute to minimize the effect of negative service by building emotional link with customer, it is not empirically confirmed. This point of view explained that the loyalty programs might work as exit barrier to current customer. Thus, this study tries to identify whether there is a interaction effect between loyalty program and service experience in keeping customer. To achieve this purpose, this study adopt both Kaplan-Meier survival analysis and Cox proportional hazard model. The research outcomes show that the average retention period is 179 days before introducing loyalty program but it is increased to 227 days after reward is given to the customers. Since this difference is statistically significant, it could be said that H1 is supported. In addition, the contribution margin coming from increased transaction period is bigger than the cost for administering loyalty programs. To address other research questions, we probe the interaction effect between loyalty program and other factors(i.e., customer type and service experience) affecting it. The analysis of Cox proportional hazard model said that the current customer is more likely to engage in building relationship with company compared to new customer. In addition, retention rate of satisfied customer is significantly increased in relation to dis-satisfied customer. Interestingly, the transaction period of dis-satisfied customer is notably increased after introducing loyalty programs. Thus, it could be said that H2, H3, and H4 are also supported. In summary, we found that the loyalty programs have values as a promotional tool in forming positive relationship with customer and building exit barrier.

• The Journal of Natural Sciences
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• v.14 no.1
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• pp.83-121
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• 2004

This study was carried out to examine how solid the production foundation of rice in Chung-Nam Province is, and, if not, to probe alternative measures through the size of farms specializing in rice, of which direction would be a pivot of rice industry-oriented policy. The results obtained can be summarized as follows : 1. The amount of rice production in Chung-Nam Province is highest in Korea and the size of paddy field area is the second largest : This implying that the probability that rice production in Chung-Nam Province would be severely influenced by a global trend of market conditions. The number of farms specializing in rice becoming the core group of rice farming account for 7.7 percent of the total number of farm household in Korea. Average field area financial support which had been input to farm household by Government had a noticeable effect on the improvement of the policy of farm-size program. 2. Farm-size program in Chung-Nam Province established from 1980 to 2002 in creased the cultivation size of paddy field to 19,484 hectares, and this program enhanced the buying and selling of farmland and the number of farmland bargain reached 6,431 household and 16,517 hectares, respectively, in 1995-2002. Meanwhile, long-term letting and hiring of farmland appeared so active that the bargain acreage reached 6,970 hectares, and farm involved was 7,059 households, however, the farm-exchange-and-unity program did not satisfy our expectation, because the retirement farm operators reluctantly participated to sell their farms. Another reason that had delayed the bargain of farms rested on the general category of social complication attendant upon the exchange and unity operation for scattered farm. Such difficulties would work negative effects out to carry on the target of farm-size work in general. 3. The following measures were presented to propel the farm-size promotion program : a. Occupation shift project, followed by the social security program for retirement and elderly farm operators, should be promptly established and also a number of types of incentives for promoting the letting and hiring work and farm-exchange-and-unity program would also be set up. b. To establish the effective key system of rice production, all the farm operators should increase the unit area yield of rice and lower the production cost. To do so, a great deal of production teams of rice equipped with managerial techniques and capabilities need to be organized. And, also, there should be appropriate arrays of facilities including information system. This plan is desirable to be in line with a diversity of the structural implement of regional integration based on farm system building. c. To extend the size of farm and to improve farm management, we have to devise the enlargement of individual size of farm for maximized management and the utilization of farm-size grouping method. In conclusion, it can be said that the farm-size project in Chung-Nam Province which has continued since the 1980s was satisfactorily achieved. However, we still have a lot of problems to be solved to break down the barrier for attainment of the desirable farm-size operation work.. Farm-size project has fairly close relation with farm specialization in rice and, thus, the positive support for farm household including the integrated program for both retirement farmers and off-farm operators should be considered to pursue the progressive development of the farm-size program, which is key means to successful achievement of rice farming enforcement in Chung-Nam Province.

• Journal of The Korean Society of Grassland and Forage Science
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• v.3 no.2
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• pp.100-111
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• 1983

The research results reported herein had the objectives to understand and analyze the present problems of saemaeul woodland joint cattle grazing system in Kang Won Do and to take steps of improvement. The study results on actual management conditions, problems analyzed and improvement plan of total 208 joint cattle grazing area which was established 105 area in 1981 and 103 area in 1982 were summarized as follows: 1. the effectiveness of joint cattle grazing projects 1) Average daily weight gain of cattle during joint cattle grazing period was 0.4kg, showing higher daily than the conventional feeding of 0.33kg. 2) Increase of total farm income over the conventional feeding system were \1,031,357,320 during the grazing period from May to October in 1982 by adapting the 208 joint cattle grazing system, of which effectiveness of weight gain was \293,075,300 and labor saving was \543,838,750. 3) According to the results of questionaire investigation from 208 joint cattle grazing area, effectiveness of joint cattle grazing system over the conventional system were (1) labor saving, (2) feed cost saving, (3) reduced diseases, (4) increase of number of feeding, (5) inspiration of joint endeavor, (6) effect of more gain, (7) easiness of feeding and feed cost savings. 2. Problems of joint cattle grazing system. 1) Shortages of grass were a problem at second year of joint cattle grazing period due to the low regrowth rate of wild grass. 2) Proper land for woodland joint cattle grazing is belonging to land of Government ownership and it is very hard to get the permission from office of forestry for cattle grazing purpose. 3) It is also difficult to find a proper time of breeding in grazing area by the difficulty of estrus detection. 4) There are a difficulty to give a proper vaccination and medical examination for the grazing cattle. 3. Improvement plans for woodland joint cattle grazing projects. 1) Obtain sufficient roughages by hoof cultivation and oversowing pasture from the second year of joint cattle grazing period. 2) In order to increase the beef production and to use for a calf production area, Government should arrange that all proper grazing land of Government owned in Kang Won Do convert into woodland joint cattle grazing area. 3) Make a good reproductive record by mixed grazing with a excellent breeding cow in a remote area. And carry out the collective artificial insemination with synchronous puberty induced by injection of puberty stimulation hormone. 4) Make a preventive injection for blackleg, twice medication of fasciola hepatica in a year, and spray and medication of tick insecticide. 4. A policy towards upbringing of woodland joint cattle grazing area. 1) Government should thoroughly investigate about a proper land for woodland joint cattle grazing from all forests. 2) When the area is suitable for the woodland joint cattle grazing, though it is national forest or restricted area, government should make it possible to establish a grazing area. 3) On the proper land foe joint cattle grazing in the remote place, Government should support for the road construction and electric fence equipments by using of national funds. 4) There should be an administrative consideration for well promotion of the project that make woodland joint cattle grazing suitable to the characteristics of Kang Won Do. 5) In order to improve the reproduction record, Government should reform the insufficiency of artificial insemination in the joint cattle grazing area. 6) In order to maintain a proper price of cow, Government should carry out the price plan. 7) When there is any request for grassland formation in the woodland joint cattle grazing area, Government should permit it with preference.

• Journal of Global Scholars of Marketing Science
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• v.19 no.1
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• pp.37-46
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• 2009

The Census Bureau of the Department of Commerce announced in May 2008 that U.S. retail e-commerce sales for 2006 reached $ 107 billion, up from $ 87 billion in 2005 - an increase of 22 percent. From 2001 to 2006, retail e-sales increased at an average annual growth rate of 25.4 percent. The explosive growth of E-Commerce has caused profound changes in marketing channel relationships and structures in many industries. Despite the great potential implications for both academicians and practitioners, there still exists a great deal of uncertainty about the impact of the Internet channel introduction on distribution channel management. The purpose of this study is to investigate how the ownership of the new Internet channel affects the existing channel members and consumers. To explore the above research questions, this study conducts well-controlled mathematical experiments to isolate the impact of the Internet channel by comparing before and after the Internet channel entry. The model consists of a monopolist manufacturer selling its product through a channel system including one independent physical store before the entry of an Internet store. The addition of the Internet store to this channel system results in a mixed channel comprised of two different types of channels. The new Internet store can be launched by the independent physical store such as Bestbuy. In this case, the physical retailer coordinates the two types of stores to maximize the joint profits from the two stores. The Internet store also can be introduced by an independent Internet retailer such as Amazon. In this case, a retail level competition occurs between the two types of stores. Although the manufacturer sells only one product, consumers view each product-outlet pair as a unique offering. Thus, the introduction of the Internet channel provides two product offerings for consumers. The channel structures analyzed in this study are illustrated in Fig.1. It is assumed that the manufacturer plays as a Stackelberg leader maximizing its own profits with the foresight of the independent retailer's optimal responses as typically assumed in previous analytical channel studies. As a Stackelberg follower, the independent physical retailer or independent Internet retailer maximizes its own profits, conditional on the manufacturer's wholesale price. The price competition between two the independent retailers is assumed to be a Bertrand Nash game. For simplicity, the marginal cost is set at zero, as typically assumed in this type of study. In order to explore the research questions above, this study develops a game theoretic model that possesses the following three key characteristics. First, the model explicitly captures the fact that an Internet channel and a physical store exist in two independent dimensions (one in physical space and the other in cyber space). This enables this model to demonstrate that the effect of adding an Internet store is different from that of adding another physical store. Second, the model reflects the fact that consumers are heterogeneous in their preferences for using a physical store and for using an Internet channel. Third, the model captures the vertical strategic interactions between an upstream manufacturer and a downstream retailer, making it possible to analyze the channel structure issues discussed in this paper. Although numerous previous models capture this vertical dimension of marketing channels, none simultaneously incorporates the three characteristics reflected in this model. The analysis results are summarized in Table 1. When the new Internet channel is introduced by the existing physical retailer and the retailer coordinates both types of stores to maximize the joint profits from the both stores, retail prices increase due to a combination of the coordination of the retail prices and the wider market coverage. The quantity sold does not significantly increase despite the wider market coverage, because the excessively high retail prices alleviate the market coverage effect to a degree. Interestingly, the coordinated total retail profits are lower than the combined retail profits of two competing independent retailers. This implies that when a physical retailer opens an Internet channel, the retailers could be better off managing the two channels separately rather than coordinating them, unless they have the foresight of the manufacturer's pricing behavior. It is also found that the introduction of an Internet channel affects the power balance of the channel. The retail competition is strong when an independent Internet store joins a channel with an independent physical retailer. This implies that each retailer in this structure has weak channel power. Due to intense retail competition, the manufacturer uses its channel power to increase its wholesale price to extract more profits from the total channel profit. However, the retailers cannot increase retail prices accordingly because of the intense retail level competition, leading to lower channel power. In this case, consumer welfare increases due to the wider market coverage and lower retail prices caused by the retail competition. The model employed for this study is not designed to capture all the characteristics of the Internet channel. The theoretical model in this study can also be applied for any stores that are not geographically constrained such as TV home shopping or catalog sales via mail. The reasons the model in this study is names as "Internet" are as follows: first, the most representative example of the stores that are not geographically constrained is the Internet. Second, catalog sales usually determine the target markets using the pre-specified mailing lists. In this aspect, the model used in this study is closer to the Internet than catalog sales. However, it would be a desirable future research direction to mathematically and theoretically distinguish the core differences among the stores that are not geographically constrained. The model is simplified by a set of assumptions to obtain mathematical traceability. First, this study assumes the price is the only strategic tool for competition. In the real world, however, various marketing variables can be used for competition. Therefore, a more realistic model can be designed if a model incorporates other various marketing variables such as service levels or operation costs. Second, this study assumes the market with one monopoly manufacturer. Therefore, the results from this study should be carefully interpreted considering this limitation. Future research could extend this limitation by introducing manufacturer level competition. Finally, some of the results are drawn from the assumption that the monopoly manufacturer is the Stackelberg leader. Although this is a standard assumption among game theoretic studies of this kind, we could gain deeper understanding and generalize our findings beyond this assumption if the model is analyzed by different game rules.