• Title/Summary/Keyword: business process analysis

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The Characteristics and Performances of Manufacturing SMEs that Utilize Public Information Support Infrastructure (공공 정보지원 인프라 활용한 제조 중소기업의 특징과 성과에 관한 연구)

  • Kim, Keun-Hwan;Kwon, Taehoon;Jun, Seung-pyo
    • Journal of Intelligence and Information Systems
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    • v.25 no.4
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    • pp.1-33
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    • 2019
  • The small and medium sized enterprises (hereinafter SMEs) are already at a competitive disadvantaged when compared to large companies with more abundant resources. Manufacturing SMEs not only need a lot of information needed for new product development for sustainable growth and survival, but also seek networking to overcome the limitations of resources, but they are faced with limitations due to their size limitations. In a new era in which connectivity increases the complexity and uncertainty of the business environment, SMEs are increasingly urged to find information and solve networking problems. In order to solve these problems, the government funded research institutes plays an important role and duty to solve the information asymmetry problem of SMEs. The purpose of this study is to identify the differentiating characteristics of SMEs that utilize the public information support infrastructure provided by SMEs to enhance the innovation capacity of SMEs, and how they contribute to corporate performance. We argue that we need an infrastructure for providing information support to SMEs as part of this effort to strengthen of the role of government funded institutions; in this study, we specifically identify the target of such a policy and furthermore empirically demonstrate the effects of such policy-based efforts. Our goal is to help establish the strategies for building the information supporting infrastructure. To achieve this purpose, we first classified the characteristics of SMEs that have been found to utilize the information supporting infrastructure provided by government funded institutions. This allows us to verify whether selection bias appears in the analyzed group, which helps us clarify the interpretative limits of our study results. Next, we performed mediator and moderator effect analysis for multiple variables to analyze the process through which the use of information supporting infrastructure led to an improvement in external networking capabilities and resulted in enhancing product competitiveness. This analysis helps identify the key factors we should focus on when offering indirect support to SMEs through the information supporting infrastructure, which in turn helps us more efficiently manage research related to SME supporting policies implemented by government funded institutions. The results of this study showed the following. First, SMEs that used the information supporting infrastructure were found to have a significant difference in size in comparison to domestic R&D SMEs, but on the other hand, there was no significant difference in the cluster analysis that considered various variables. Based on these findings, we confirmed that SMEs that use the information supporting infrastructure are superior in size, and had a relatively higher distribution of companies that transact to a greater degree with large companies, when compared to the SMEs composing the general group of SMEs. Also, we found that companies that already receive support from the information infrastructure have a high concentration of companies that need collaboration with government funded institution. Secondly, among the SMEs that use the information supporting infrastructure, we found that increasing external networking capabilities contributed to enhancing product competitiveness, and while this was no the effect of direct assistance, we also found that indirect contributions were made by increasing the open marketing capabilities: in other words, this was the result of an indirect-only mediator effect. Also, the number of times the company received additional support in this process through mentoring related to information utilization was found to have a mediated moderator effect on improving external networking capabilities and in turn strengthening product competitiveness. The results of this study provide several insights that will help establish policies. KISTI's information support infrastructure may lead to the conclusion that marketing is already well underway, but it intentionally supports groups that enable to achieve good performance. As a result, the government should provide clear priorities whether to support the companies in the underdevelopment or to aid better performance. Through our research, we have identified how public information infrastructure contributes to product competitiveness. Here, we can draw some policy implications. First, the public information support infrastructure should have the capability to enhance the ability to interact with or to find the expert that provides required information. Second, if the utilization of public information support (online) infrastructure is effective, it is not necessary to continuously provide informational mentoring, which is a parallel offline support. Rather, offline support such as mentoring should be used as an appropriate device for abnormal symptom monitoring. Third, it is required that SMEs should improve their ability to utilize, because the effect of enhancing networking capacity through public information support infrastructure and enhancing product competitiveness through such infrastructure appears in most types of companies rather than in specific SMEs.

A Study on Hoslital Nurses' Preferred Duty Shift and Duty Hours (병원 간호사의 선호근무시간대에 관한 연구)

  • Lee, Gyeong-Sik;Jeong, Geum-Hui
    • The Korean Nurse
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    • v.36 no.1
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    • pp.77-96
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    • 1997
  • The duty shifts of hospital nurses not only affect nurses' physical and mental health but also present various personnel management problems which often result in high turnover rates. In this context a study was carried out from October to November 1995 for a period of two months to find out the status of hospital nurses' duty shift patterns, and preferred duty hours and fixed duty shifts. The study population was 867 RNs working in five general hospitals located in Seoul and its vicinity. The questionnaire developed by the writer was used for data collection. The response rate was 85.9 percent or 745 returns. The SAS program was used for data analysis with the computation of frequencies, percentages and Chi square test. The findings of the study are as follows: 1. General characteristics of the study population: 56 percent of respondents was (25 years group and 76.5 percent were "single": the predominant proportion of respondents was junior nursing college graduates(92.2%) and have less than 5 years nursing experience in hospitals(65.5%). For their future working plan in nursing profession, nearly 50% responded as uncertain The reasons given for their career plan was predominantly 'personal growth and development' rather than financial reasons. 2. The interval for rotations of duty stations was found to be mostly irregular(56.4%) while others reported as weekly(16.1%), monthly(12.9%), and fixed terms(4.6%). 3. The main problems related to duty shifts particularly the evening and night duty nurses reported were "not enough time for the family, " "afraid of security problems after the work when returning home late at night." and "lack of leisure time". "problems in physical and physiological adjustment." "problems in family life." "lack of time for interactions with fellow nurses" etc. 4. The forty percent of respondents reported to have '1-2 times' of duty shift rotations while all others reported that '0 time'. '2-3 times'. 'more than 3 times' etc. which suggest the irregularity in duty shift rotations. 5. The majority(62.8%) of study population found to favor the rotating system of duty stations. The reasons for favoring the rotation system were: the opportunity for "learning new things and personal development." "better human relations are possible. "better understanding in various duty stations." "changes in monotonous routine job" etc. The proportion of those disfavor the rotating 'system was 34.7 percent. giving the reasons of"it impedes development of specialization." "poor job performances." "stress factors" etc. Furthermore. respondents made the following comments in relation to the rotation of duty stations: the nurses should be given the opportunity to participate in the. decision making process: personal interest and aptitudes should be considered: regular intervals for the rotations or it should be planned in advance. etc. 6. For the future career plan. the older. married group with longer nursing experiences appeared to think the nursing as their lifetime career more likely than the younger. single group with shorter nursing experiences ($x^2=61.19.{\;}p=.000;{\;}x^2=41.55.{\;}p=.000$). The reason given for their future career plan regardless of length of future service, was predominantly "personal growth and development" rather than financial reasons. For further analysis, the group those with the shorter career plan appeared to claim "financial reasons" for their future career more readily than the group who consider the nursing job as their lifetime career$(x^2$= 11.73, p=.003) did. This finding suggests the need for careful .considerations in personnel management of nursing administration particularly when dealing with the nurses' career development. The majority of respondents preferred the fixed day shift. However, further analysis of those preferred evening shift by age and civil status, "< 25 years group"(15.1%) and "single group"(13.2) were more likely to favor the fixed evening shift than > 25 years(6.4%) and married(4.8%)groups. This differences were statistically significant ($x^2=14.54, {\;}p=.000;{\;}x^2=8.75, {\;}p=.003$). 7. A great majority of respondents(86.9% or n=647) found to prefer the day shifts. When the four different types of duty shifts(Types A. B. C, D) were presented, 55.0 percent of total respondents preferred the A type or the existing one followed by D type(22.7%). B type(12.4%) and C type(8.2%). 8. When the condition of monetary incentives for the evening(20% of salary) and night shifts(40% of. salary) of the existing duty type was presented. again the day shift appeared to be the most preferred one although the rate was slightly lower(66.4% against 86.9%). In the case of evening shift, with the same incentive, the preference rates for evening and night shifts increased from 11.0 to 22.4 percent and from 0.5 to 3.0 percent respectively. When the age variable was controlled. < 25 yrs group showed higher rates(31.6%. 4.8%) than those of > 25 yrs group(15.5%. 1.3%) respectively preferring the evening and night shifts(p=.000). The civil status also seemed to operate on the preferences of the duty shifts as the single group showed lower rate(69.0%) for day duty against 83. 6% of the married group. and higher rates for evening and night duties(27.2%. 15.1%) respectively against those of the married group(3.8%. 1.8%) while a higher proportion of the married group(83. 6%) preferred the day duties than the single group(69.0%). These differences were found to be statistically all significant(p=.001). 9. The findings on preferences of three different types of fixed duty hours namely, B, C. and D(with additional monetary incentives) are as follows in order of preference: B type(12hrs a day, 3days a wk): day shift(64.1%), evening shift(26.1%). night shift(6.5%) C type(12hrs a day. 4days a wk) : evening shift(49.2%). day shift(32.8%), night shift(11.5%) D type(10hrs a day. 4days a wk): showed the similar trend as B type. The findings of higher preferences on the evening and night duties when the incentives are given. as shown above, suggest the need for the introductions of different patterns of duty hours and incentive measures in order to overcome the difficulties in rostering the nursing duties. However, the interpretation of the above data, particularly the C type, needs cautions as the total number of respondents is very small(n=61). It requires further in-depth study. In conclusion. it seemed to suggest that the patterns of nurses duty hours and shifts in the most hospitals in the country have neither been tried for different duty types nor been flexible. The stereotype rostering system of three shifts and insensitiveness for personal life aspect of nurses seemed to be prevailing. This study seems to support that irregular and frequent rotations of duty shifts may be contributing factors for most nurses' maladjustment problems in physical and mental health. personal and family life which eventually may result in high turnover rates. In order to overcome the increasing problems in personnel management of hospital nurses particularly in rostering of evening and night duty shifts, which may related to eventual high turnover rates, the findings of this study strongly suggest the need for an introduction of new rostering systems including fixed duties and appropriate incentive measures for evenings and nights which the most nurses want to avoid, In considering the nursing care of inpatients is the round-the clock business. the practice of the nursing duty shift system is inevitable. In this context, based on the findings of this study. the following are recommended: 1. The further in-depth studies on duty shifts and hours need to be undertaken for the development of appropriate and effective rostering systems for hospital nurses. 2. An introduction of appropriate incentive measures for evening and night duty shifts along with organizational considerations such as the trials for preferred duty time bands, duty hours, and fixed duty shifts should be considered if good quality of care for the patients be maintained for the round the clock. This may require an initiation of systematic research and development activities in the field of hospital nursing administration as a part of permanent system in the hospital. 3. Planned and regular intervals, orientation and training, and professional and personal growth should be considered for the rotation of different duty stations or units. 4. In considering the higher degree of preferences in the duty type of "10hours a day, 4days a week" shown in this study, it would be worthwhile to undertake the R&D type studies in large hospital settings.

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Effects of Joining Coalition Loyalty Program : How the Brand affects Brand Loyalty Based on Brand Preference (브랜드 선호에 따라 제휴 로열티 프로그램 가입이 가맹점 브랜드 충성도에 미치는 영향)

  • Rhee, Jin-Hwa
    • Journal of Distribution Research
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    • v.17 no.1
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    • pp.87-115
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    • 2012
  • Introduction: In these days, a loyalty program is one of the most common marketing mechanisms (Lacey & Sneath, 2006; Nues & Dreze, 2006; Uncles et al., 20003). In recent years, Coalition Loyalty Program is more noticeable as one of progressed forms. In the past, loyalty program was operating independently by single product brand or single retail channel brand. Now, companies using Coalition Loyalty Program share their programs as one single service and companies to participate to this program continue to have benefits from their existing program as well as positive spillover effect from the other participating network companies. Instead of consumers to earn or spend points from single retail channel or brand, consumers will have more opportunities to utilize their points and be able to purchase other participating companies products. Issues that are related to form of loyalty programs are essentially connected with consumers' perceived view on convenience of using its program. This can be a problem for distribution companies' strategic marketing plan. Although Coalition Loyalty Program is popular corporate marketing strategy to most companies, only few researches have been published. However, compared to independent loyalty program, coalition loyalty program operated by third parties of partnership has following conditions: Companies cannot autonomously modify structures of program for individual companies' benefits, and there is no guarantee to operate and to participate its program continuously by signing a contract. Thus, it is important to conduct the study on how coalition loyalty program affects companies' success and its process as much as conducting the study on effects of independent program. This study will complement the lack of coalition loyalty program study. The purpose of this study is to find out how consumer loyalty affects affiliated brands, its cause and mechanism. The past study about loyalty program only provided the variation of performance analysis, but this study will specifically focus on causes of results. In order to do these, this study is designed and to verify three primary objects as following; First, based on opinions of Switching Barriers (Fornell, 1992; Ping, 1993; Jones, et at., 2000) about causes of loyalty of coalition brand, 'brand attractiveness' and 'brand switching cost' are antecedents and causes of change in 'brand loyalty' will be investigated. Second, influence of consumers' perception and attitude prior to joining coalition loyalty program, influence of program in retail brands, brand attractiveness and spillover effect of switching cost after joining coalition program will be verified. Finally, the study will apply 'prior brand preference' as a variable and will provide a relationship between effects of coalition loyalty program and prior preference level. Hypothesis Hypothesis 1. After joining coalition loyalty program, more preferred brand (compared to less preferred brand) will increase influence on brand attractiveness to brand loyalty. Hypothesis 2. After joining coalition loyalty program, less preferred brand (compared to more preferred brand) will increase influence on brand switching cost to brand loyalty. Hypothesis 3. (1)Brand attractiveness and (2)brand switching cost of more preferred brand (before joining the coalition loyalty program) will influence more positive effects from (1)program attractiveness and (2)program switching cost of coalition loyalty program (after joining) than less preferred brand. Hypothesis 4. After joining coalition loyalty program, (1)brand attractiveness and (2)brand switching cost of more preferred brand will receive more positive impacts from (1)program attractiveness and (2)program switching cost of coalition loyalty program than less preferred brand. Hypothesis 5. After joining coalition loyalty program, (1)brand attractiveness and (2)brand switching cost of more preferred brand will receive less impacts from (1)brand attractiveness and (2)brand switching cost of different brands (having different preference level), which joined simultaneously, than less preferred brand. Method : In order to validate hypotheses, this study will apply experimental method throughout virtual scenario of coalition loyalty program if consumers have used or available for the actual brands. The experiment is conducted twice to participants. In a first experiment, the study will provide six coalition brands which are already selected based on prior research. The survey asked each brand attractiveness, switching cost, and loyalty after they choose high preference brand and low preference brand. One hour break was provided prior to the second experiment. In a second experiment, virtual coalition loyalty program "SaveBag" was introduced to participants. Participants were informed that "SaveBag" will be new alliance with six coalition brands from the first experiment. Brand attractiveness and switching cost about coalition program were measured and brand attractiveness and switching cost of high preference brand and low preference brand were measured as same method of first experiment. Limitation and future research This study shows limitations of effects of coalition loyalty program by using virtual scenario instead of actual research. Thus, future study should compare and analyze CLP panel data to provide more in-depth information. In addition, this study only proved the effectiveness of coalition loyalty program. However, there are two types of loyalty program, which are Single and Coalition, and success of coalition loyalty program will be dependent on market brand power and prior customer attitude. Therefore, it will be interesting to compare effects of two programs in the future.

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Retail Product Development and Brand Management Collaboration between Industry and University Student Teams (산업여대학학생단대지간적령수산품개발화품패관리협작(产业与大学学生团队之间的零售产品开发和品牌管理协作))

  • Carroll, Katherine Emma
    • Journal of Global Scholars of Marketing Science
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    • v.20 no.3
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    • pp.239-248
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    • 2010
  • This paper describes a collaborative project between academia and industry which focused on improving the marketing and product development strategies for two private label apparel brands of a large regional department store chain in the southeastern United States. The goal of the project was to revitalize product lines of the two brands by incorporating student ideas for new solutions, thereby giving the students practical experience with a real-life industry situation. There were a number of key players involved in the project. A privately-owned department store chain based in the southeastern United States which was seeking an academic partner had recognized a need to update two existing private label brands. They targeted middle-aged consumers looking for casual, moderately priced merchandise. The company was seeking to change direction with both packaging and presentation, and possibly product design. The branding and product development divisions of the company contacted professors in an academic department of a large southeastern state university. Two of the professors agreed that the task would be a good fit for their classes - one was a junior-level Intermediate Brand Management class; the other was a senior-level Fashion Product Development class. The professors felt that by working collaboratively on the project, students would be exposed to a real world scenario, within the security of an academic learning environment. Collaboration within an interdisciplinary team has the advantage of providing experiences and resources beyond the capabilities of a single student and adds "brainpower" to problem-solving processes (Lowman 2000). This goal of improving the capabilities of students directed the instructors in each class to form interdisciplinary teams between the Branding and Product Development classes. In addition, many universities are employing industry partnerships in research and teaching, where collaboration within temporal (semester) and physical (classroom/lab) constraints help to increase students' knowledge and experience of a real-world situation. At the University of Tennessee, the Center of Industrial Services and UT-Knoxville's College of Engineering worked with a company to develop design improvements in its U.S. operations. In this study, Because should be lower case b with a private label retail brand, Wickett, Gaskill and Damhorst's (1999) revised Retail Apparel Product Development Model was used by the product development and brand management teams. This framework was chosen because it addresses apparel product development from the concept to the retail stage. Two classes were involved in this project: a junior level Brand Management class and a senior level Fashion Product Development class. Seven teams were formed which included four students from Brand Management and two students from Product Development. The classes were taught the same semester, but not at the same time. At the beginning of the semester, each class was introduced to the industry partner and given the problem. Half the teams were assigned to the men's brand and half to the women's brand. The teams were responsible for devising approaches to the problem, formulating a timeline for their work, staying in touch with industry representatives and making sure that each member of the team contributed in a positive way. The objective for the teams was to plan, develop, and present a product line using merchandising processes (following the Wickett, Gaskill and Damhorst model) and develop new branding strategies for the proposed lines. The teams performed trend, color, fabrication and target market research; developed sketches for a line; edited the sketches and presented their line plans; wrote specifications; fitted prototypes on fit models, and developed final production samples for presentation to industry. The branding students developed a SWOT analysis, a Brand Measurement report, a mind-map for the brands and a fully integrated Marketing Report which was presented alongside the ideas for the new lines. In future if the opportunity arises to work in this collaborative way with an existing company who wishes to look both at branding and product development strategies, classes will be scheduled at the same time so that students have more time to meet and discuss timelines and assigned tasks. As it was, student groups had to meet outside of each class time and this proved to be a challenging though not uncommon part of teamwork (Pfaff and Huddleston, 2003). Although the logistics of this exercise were time-consuming to set up and administer, professors felt that the benefits to students were multiple. The most important benefit, according to student feedback from both classes, was the opportunity to work with industry professionals, follow their process, and see the results of their work evaluated by the people who made the decisions at the company level. Faculty members were grateful to have a "real-world" case to work with in the classroom to provide focus. Creative ideas and strategies were traded as plans were made, extending and strengthening the departmental links be tween the branding and product development areas. By working not only with students coming from a different knowledge base, but also having to keep in contact with the industry partner and follow the framework and timeline of industry practice, student teams were challenged to produce excellent and innovative work under new circumstances. Working on the product development and branding for "real-life" brands that are struggling gave students an opportunity to see how closely their coursework ties in with the real-world and how creativity, collaboration and flexibility are necessary components of both the design and business aspects of company operations. Industry personnel were impressed by (a) the level and depth of knowledge and execution in the student projects, and (b) the creativity of new ideas for the brands.

Qualitative Research on Korean Baby-Boomer Generation Middle-Aged Women's Attitude Toward Their Lives - Based on Middle-Class Seoul Residents - (한국의 베이비부머세대 중년여성이 삶에서 추구하는 가치에 대한 질적연구 - 서울 거주 중산층을 중심으로 -)

  • Lee, Ji Hyun;Kim, Sun Woo
    • Asia Marketing Journal
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    • v.14 no.2
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    • pp.127-156
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    • 2012
  • A lot of interest in the baby-boomer generation, those who were born after World War II, has emerged since their retirement has been accelerated. The retirement of baby-boomers has caused many health, public welfare, social policy and family relationship problems. However, their increased purchasing power has made them more attractive consumers than any other generation, and they have become a fascinating niche market in the depressed economy. This research selected middle-class women of the baby-boomer generation who have had powerful effects on society and have emerged as an attractive niche market, and attempted to understand their lives intensively. Based on research activities, the purpose of this research is to identify baby-boomer generation middle-aged women's life values. Qualitative research methodology was used to achieve research objectives, and this research aimed to suggest marketing implications to connected industries based on the research results. The research objectives are as follows. 1. understanding the lives of baby-boomer middle-class women who have powerful effects on socio-economic phenomena 2. identifying the life values of baby-boomer middle-class women 3. generating marketing implications based on an understanding of baby-boomer middle-class women's lives and life values This research conducted FGIs(focus group interviews), one of the qualitative research methodologies, to figure out baby-boomer middle-class women's life values intensively and selected 10 women living in Seoul for data collection. The qualitative data of collected FGIs were analyzed with spiral data analysis methodology proposed by Creswell(2007). The most effective factors to influence these middle-class women's lives powerfully were 'time' and 'independence'. Their consciousness of the importance of using time affects their life pattern generally, and their independence also impacts greatly on the way they exploit time and on their diverse relationships. They maximized their self-realization and showed long-term partnership with their surrounding circumstances because of those effective factors. Baby-boomer middle-class women's self-realization was divided into two areas. One was their outside activities and another was perfect management of their physical appearance and home interior. Like the results of this research, their need for social entrance will be reinforced more strongly since their internal and external activities aim for the achievement of self-realization. In addition, this research suggests that baby-boomer middle-class women's activities are connected with their management of their physical appearance and home interior decorations, and that such management is caused not only by a simple interest in fashion and beauty but also a profound desire for self-realization. On account of their consciousness, which is different from other generations, Korean baby-boomer middle-class women are able to maintain positive partnerships with their surrounding circumstances; however, they also show ambivalent emotions to retain effective partnerships. To overcome those stressful situations, they make greater efforts to keep up their health and youth, and also engage in diverse activities to maintain their mental health. Finally, they generate positive attitudes toward their economic situation and extra time to develop self-realization and pursue happy, youthful and healthy lives. Based on those results, this study suggests the following implications. First, industries targeting the baby-boomer generation should develop innovative products and services which help the baby-boomer generation maximize their efficiency of time since time is one of the most important factors powerfully impacting the baby-boomer generation. They will engage in various activities to fill up their extra time and consume helpful products and services. Second, such industries should supply the baby-boomer generation with opportunities which propose new ways of self-realization since this generation shows a great desire for self-realization because of their self-efficacy. With customized strategies of satisfying their needs, the baby-boomer generation would discover opportunities to utilize their abilities, relationships and aesthetic senses, and industries would develop a niche market. Third, market segmentations which target the baby-boomer generation's desire to maintain their physical appearance and home interior should be executed since such activities are the main strategies to develop this generation's self-realization. The baby-boomer generation's desire to study those areas would be expanded, and those education systems should produce innovative products and services targeting the baby-boomer generation. This implication also offers to government officials new policies related with the baby-boomer generation. This exploratory study utilized qualitative research methodology to understand baby-boomer middle-class women's lives, and proposed propositions and limitations for further researches. As for the limitations, first, it is hard to generalize the research results so that they may apply to all areas and economic classes of the baby-boomer generation since this research selected only 10 women living in Seoul for the data collection process. To overcome this limitation, extended data collections of subjects from diverse regions and economic classes should be designed. Second, quantitative research should be conducted to supplement the findings with validities. Third, this research focused on only general ideas of the baby-boomer generation's lives since the range of this study was focused on their overall lives. Therefore, intensive research related to specific areas of their lives should be conducted.

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The Impact of Market Environments on Optimal Channel Strategy Involving an Internet Channel: A Game Theoretic Approach (시장 환경이 인터넷 경로를 포함한 다중 경로 관리에 미치는 영향에 관한 연구: 게임 이론적 접근방법)

  • Yoo, Weon-Sang
    • Journal of Distribution Research
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    • v.16 no.2
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    • pp.119-138
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    • 2011
  • Internet commerce has been growing at a rapid pace for the last decade. Many firms try to reach wider consumer markets by adding the Internet channel to the existing traditional channels. Despite the various benefits of the Internet channel, a significant number of firms failed in managing the new type of channel. Previous studies could not cleary explain these conflicting results associated with the Internet channel. One of the major reasons is most of the previous studies conducted analyses under a specific market condition and claimed that as the impact of Internet channel introduction. Therefore, their results are strongly influenced by the specific market settings. However, firms face various market conditions in the real worlddensity and disutility of using the Internet. The purpose of this study is to investigate the impact of various market environments on a firm's optimal channel strategy by employing a flexible game theory model. We capture various market conditions with consumer density and disutility of using the Internet.

    shows the channel structures analyzed in this study. Before the Internet channel is introduced, a monopoly manufacturer sells its products through an independent physical store. From this structure, the manufacturer could introduce its own Internet channel (MI). The independent physical store could also introduce its own Internet channel and coordinate it with the existing physical store (RI). An independent Internet retailer such as Amazon could enter this market (II). In this case, two types of independent retailers compete with each other. In this model, consumers are uniformly distributed on the two dimensional space. Consumer heterogeneity is captured by a consumer's geographical location (ci) and his disutility of using the Internet channel (${\delta}_{N_i}$).
    shows various market conditions captured by the two consumer heterogeneities.
    (a) illustrates a market with symmetric consumer distributions. The model captures explicitly the asymmetric distributions of consumer disutility in a market as well. In a market like that is represented in
    (c), the average consumer disutility of using an Internet store is relatively smaller than that of using a physical store. For example, this case represents the market in which 1) the product is suitable for Internet transactions (e.g., books) or 2) the level of E-Commerce readiness is high such as in Denmark or Finland. On the other hand, the average consumer disutility when using an Internet store is relatively greater than that of using a physical store in a market like (b). Countries like Ukraine and Bulgaria, or the market for "experience goods" such as shoes, could be examples of this market condition. summarizes the various scenarios of consumer distributions analyzed in this study. The range for disutility of using the Internet (${\delta}_{N_i}$) is held constant, while the range of consumer distribution (${\chi}_i$) varies from -25 to 25, from -50 to 50, from -100 to 100, from -150 to 150, and from -200 to 200.
    summarizes the analysis results. As the average travel cost in a market decreases while the average disutility of Internet use remains the same, average retail price, total quantity sold, physical store profit, monopoly manufacturer profit, and thus, total channel profit increase. On the other hand, the quantity sold through the Internet and the profit of the Internet store decrease with a decreasing average travel cost relative to the average disutility of Internet use. We find that a channel that has an advantage over the other kind of channel serves a larger portion of the market. In a market with a high average travel cost, in which the Internet store has a relative advantage over the physical store, for example, the Internet store becomes a mass-retailer serving a larger portion of the market. This result implies that the Internet becomes a more significant distribution channel in those markets characterized by greater geographical dispersion of buyers, or as consumers become more proficient in Internet usage. The results indicate that the degree of price discrimination also varies depending on the distribution of consumer disutility in a market. The manufacturer in a market in which the average travel cost is higher than the average disutility of using the Internet has a stronger incentive for price discrimination than the manufacturer in a market where the average travel cost is relatively lower. We also find that the manufacturer has a stronger incentive to maintain a high price level when the average travel cost in a market is relatively low. Additionally, the retail competition effect due to Internet channel introduction strengthens as average travel cost in a market decreases. This result indicates that a manufacturer's channel power relative to that of the independent physical retailer becomes stronger with a decreasing average travel cost. This implication is counter-intuitive, because it is widely believed that the negative impact of Internet channel introduction on a competing physical retailer is more significant in a market like Russia, where consumers are more geographically dispersed, than in a market like Hong Kong, that has a condensed geographic distribution of consumers.
    illustrates how this happens. When mangers consider the overall impact of the Internet channel, however, they should consider not only channel power, but also sales volume. When both are considered, the introduction of the Internet channel is revealed as more harmful to a physical retailer in Russia than one in Hong Kong, because the sales volume decrease for a physical store due to Internet channel competition is much greater in Russia than in Hong Kong. The results show that manufacturer is always better off with any type of Internet store introduction. The independent physical store benefits from opening its own Internet store when the average travel cost is higher relative to the disutility of using the Internet. Under an opposite market condition, however, the independent physical retailer could be worse off when it opens its own Internet outlet and coordinates both outlets (RI). This is because the low average travel cost significantly reduces the channel power of the independent physical retailer, further aggravating the already weak channel power caused by myopic inter-channel price coordination. The results implies that channel members and policy makers should explicitly consider the factors determining the relative distributions of both kinds of consumer disutility, when they make a channel decision involving an Internet channel. These factors include the suitability of a product for Internet shopping, the level of E-Commerce readiness of a market, and the degree of geographic dispersion of consumers in a market. Despite the academic contributions and managerial implications, this study is limited in the following ways. First, a series of numerical analyses were conducted to derive equilibrium solutions due to the complex forms of demand functions. In the process, we set up V=100, ${\lambda}$=1, and ${\beta}$=0.01. Future research may change this parameter value set to check the generalizability of this study. Second, the five different scenarios for market conditions were analyzed. Future research could try different sets of parameter ranges. Finally, the model setting allows only one monopoly manufacturer in the market. Accommodating competing multiple manufacturers (brands) would generate more realistic results.

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  • Consumer's Negative Brand Rumor Acceptance and Rumor Diffusion (소비자의 부정적 브랜드 루머의 수용과 확산)

    • Lee, Won-jun;Lee, Han-Suk
      • Asia Marketing Journal
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      • v.14 no.2
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      • pp.65-96
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      • 2012
    • Brand has received much attention from considerable marketing research. When consumers consume product or services, they are exposed to a lot of brand related stimuli. These contain brand personality, brand experience, brand identity, brand communications and so on. A special kind of new crisis occasionally confronting companies' brand management today is the brand related rumor. An important influence on consumers' purchase decision making is the word-of-mouth spread by other consumers and most decisions are influenced by other's recommendations. In light of this influence, firms have reasonable reason to study and understand consumer-to-consumer communication such as brand rumor. The importance of brand rumor to marketers is increasing as the number of internet user and SNS(social network service) site grows. Due to the development of internet technology, people can spread rumors without the limitation of time, space and place. However relatively few studies have been published in marketing journals and little is known about brand rumors in the marketplace. The study of rumor has a long history in all major social science. But very few studies have dealt with the antecedents and consequences of any kind of brand rumor. Rumor has been generally described as a story or statement in general circulation without proper confirmation or certainty as to fact. And it also can be defined as an unconfirmed proposition, passed along from people to people. Rosnow(1991) claimed that rumors were transmitted because people needed to explain ambiguous and uncertain events and talking about them reduced associated anxiety. Especially negative rumors are believed to have the potential to devastate a company's reputation and relations with customers. From the perspective of marketer, negative rumors are considered harmful and extremely difficult to control in general. It is becoming a threat to a company's sustainability and sometimes leads to negative brand image and loss of customers. Thus there is a growing concern that these negative rumors can damage brands' reputations and lead them to financial disaster too. In this study we aimed to distinguish antecedents of brand rumor transmission and investigate the effects of brand rumor characteristics on rumor spread intention. We also found key components in personal acceptance of brand rumor. In contextualist perspective, we tried to unify the traditional psychological and sociological views. In this unified research approach we defined brand rumor's characteristics based on five major variables that had been found to influence the process of rumor spread intention. The five factors of usefulness, source credibility, message credibility, worry, and vividness, encompass multi level elements of brand rumor. We also selected product involvement as a control variable. To perform the empirical research, imaginary Korean 'Kimch' brand and related contamination rumor was created and proposed. Questionnaires were collected from 178 Korean samples. Data were collected from college students who have been experienced the focal product. College students were regarded as good subjects because they have a tendency to express their opinions in detail. PLS(partial least square) method was adopted to analyze the relations between variables in the equation model. The most widely adopted causal modeling method is LISREL. However it is poorly suited to deal with relatively small data samples and can yield not proper solutions in some cases. PLS has been developed to avoid some of these limitations and provide more reliable results. To test the reliability using SPSS 16 s/w, Cronbach alpha was examined and all the values were appropriate showing alpha values between .802 and .953. Subsequently, confirmatory factor analysis was conducted successfully. And structural equation modeling has been used to analyze the research model using smartPLS(ver. 2.0) s/w. Overall, R2 of adoption of rumor is .476 and R2 of intention of rumor transmission is .218. The overall model showed a satisfactory fit. The empirical results can be summarized as follows. According to the results, the variables of brand rumor characteristic such as source credibility, message credibility, worry, and vividness affect argument strength of rumor. And argument strength of rumor also affects rumor intention. On the other hand, the relationship between perceived usefulness and argument strength of rumor is not significant. The moderating effect of product involvement on the relations between argument strength of rumor and rumor W.O.M intention is not supported neither. Consequently this study suggests some managerial and academic implications. We consider some implications for corporate crisis management planning, PR and brand management. This results show marketers that rumor is a critical factor for managing strong brand assets. Also for researchers, brand rumor should become an important thesis of their interests to understand the relationship between consumer and brand. Recently many brand managers and marketers have focused on the short-term view. They just focused on strengthen the positive brand image. According to this study we suggested that effective brand management requires managing negative brand rumors with a long-term view of marketing decisions.

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