• Title/Summary/Keyword: pricing strategy

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The Impact of Price Discount on Perceived Value, Willingness to Buy, and Search Intentions according to the Level of Consumers' Involvement (구매자의 관여도 수준에 따라 가격할인이 지각가치, 구매의향, 탐색의도에 미치는 영향)

  • Yoon, Nam-Soo;Kim, Jae-Yeong;Park, Young-Kyun
    • Journal of Distribution Science
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    • v.9 no.1
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    • pp.39-48
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    • 2011
  • One of the major reasons for fierce competition among firms is that they strive to increase their own market shares in the same market with similar and apparently undifferentiated products in terms of quality and perceived benefit. Due to such changes in the marketing environment, differentiated after-sales service and diversified promotion strategies have become more important in the race to gain a competitive advantage. Price discount is one of the popular promotion strategies that most retailers use, especially to increase sales, but offering a price discount does not always lead to the expected result. If marketers apply an identical price-promotion strategy without considering the characteristic differences in products and consumer preferences, the discounted price itself may make people skeptical about the quality of the product. Moreover, the changes in perceived value may appear differently depending on factors such as consumer involvement. This implies that variables such as the level of consumer involvement, brand loyalty, and external reference prices, in reality, would have different effects on how consumers perceive the value of price discounts. The variables that affect consumers' perceived values and buying decisions are diverse and complicated. Several studies have examined the effects of such variables as external reference price, selling price, and brand on consumers' perceived value of products. Results have not shown consistent patterns. Therefore, we must note that the factors affecting consumers' value perceptions and buying behaviors are diverse and that the results of studies on the same dependent variable come out differently depending on what that variable is. This study focused on the level of consumer involvement as a salient variable that supposedly affects the perceived value of a product, willingness to buy, and search intentions. We tried to examine whether a price discount affects the perceived value-such as perceived acquisition value and perceived transaction value-in different ways depending on the level of consumer involvement. In addition, we proposed managerial implications that marketers need to consider as a whole, for instance, product attributes, brand loyalty, and involvement and then established a differentiated pricing strategy, case by case, in order to effectively enhance consumers' perceived values. As a result, we found that perceived transaction value positively affects perceived acquisition value and when discounting the price of a high-involvement product enhances the consumer's willingness to buy, but perceived acquisition value does not affect the search intentions significantly. In the case of discounting prices of low-involvement products, on the other hand, the perceived transaction value has a positive effect on the willingness to buy, but the negative effect of perceived acquisition value on the search intentions was not significant. We suppose that people doubt a product's quality because of a declined perceived quality derived from a price discount. Even though the price discount enhanced the transaction value, people eventually increased their level of searching for additional product information. From the results of this study, we suggest that marketers ought to establish an appropriate value-enhancing strategy based on the understanding of which perceived value consumers rely on more when they conduct purchasing behavior because consumers perceive the degree of importance of acquisition value or transaction value differently, depending on their level of involvement.

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Implementation of the Agent using Universal On-line Q-learning by Balancing Exploration and Exploitation in Reinforcement Learning (강화 학습에서의 탐색과 이용의 균형을 통한 범용적 온라인 Q-학습이 적용된 에이전트의 구현)

  • 박찬건;양성봉
    • Journal of KIISE:Software and Applications
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    • v.30 no.7_8
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    • pp.672-680
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    • 2003
  • A shopbot is a software agent whose goal is to maximize buyer´s satisfaction through automatically gathering the price and quality information of goods as well as the services from on-line sellers. In the response to shopbots´ activities, sellers on the Internet need the agents called pricebots that can help them maximize their own profits. In this paper we adopts Q-learning, one of the model-free reinforcement learning methods as a price-setting algorithm of pricebots. A Q-learned agent increases profitability and eliminates the cyclic price wars when compared with the agents using the myoptimal (myopically optimal) pricing strategy Q-teaming needs to select a sequence of state-action fairs for the convergence of Q-teaming. When the uniform random method in selecting state-action pairs is used, the number of accesses to the Q-tables to obtain the optimal Q-values is quite large. Therefore, it is not appropriate for universal on-line learning in a real world environment. This phenomenon occurs because the uniform random selection reflects the uncertainty of exploitation for the optimal policy. In this paper, we propose a Mixed Nonstationary Policy (MNP), which consists of both the auxiliary Markov process and the original Markov process. MNP tries to keep balance of exploration and exploitation in reinforcement learning. Our experiment results show that the Q-learning agent using MNP converges to the optimal Q-values about 2.6 time faster than the uniform random selection on the average.

Choice-based Conjoint Analysis of Consumer Preferences for Health Food Attributes Focused on Vitamin C Supplements (선택형 컨조인트 분석을 통한 건강기능식품 속성의 소비자 선호에 관한 연구: 비타민 상품을 중심으로)

  • Kim, Tae-Hoon;Kim, Bo-Yong
    • Journal of Distribution Science
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    • v.13 no.3
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    • pp.79-91
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    • 2015
  • Purpose - First, the study identifies and analyzes consumer preferences with regard to health foods and supplements. Second, it identifies and analyzes consumer preferences with regard to the properties of Vitamin C supplements. Third, in order to provide a basic data for the development of Vitamin C supplements and to measure how consumers value the properties of different Vitamin C products, a consumer survey was conducted through the choice-based conjoint model. Based on the results, the research estimates consumers' relative product-related priorities as well as price levels and willingness to pay (WTP) for different product types, and makes suggestions regarding consumer-oriented new product development and progressive directions for the successful launch of health foods and supplements. Research design, data, and methodology - This study aims to define the attributes of health foods and supplements based on several characteristics including their natural ingredients, product price, product originality, natural ingredient content, and additional functional ingredients, and makes suggestions regarding strategic market pricing and product development for health foods and supplements according to customer attitudes and characteristics. The research used choice-based conjoint analysis methodology based on the Multinomial Logic Model and collected 94 questionnaires filled out by users of Korean Vitamin C supplements. Results - Product price is the most influential factor among the five analyzed properties. When consumers buy Vitamin C products, the relative significance level of four of the examined properties is as follows: 40.9% for product price, 23.3% for product originality, 21.9% for natural ingredient content, and 13.9% for additional functional ingredients. Vitamin C content is excluded as it is not a statistically significant factor. It is interesting that supplement manufacturers and retailers consider Vitamin C content to be very important whereas consumers do not regard it as an important factor at the time of purchase. The results for the marginal willingness to pay (MWTP) for each property of Vitamin C supplements show that consumers are willing to pay an additional 11,146 Korean won for a 50% increase in the natural ingredient content. With regard to product originality, consumers are willing to pay an additional 11,301 Korean won for products manufactured in Europe than for products manufactured in China. Moreover, consumers show a greater preference for products manufactured in Korea than in Europe. However, consumers are not willing to pay more for additional Vitamin C or additional functional ingredients added to Vitamin C products. Conclusions - According to the results of consumer research on Vitamin C supplements, which represent a popular health food supplement in Korea, most Korean health food and supplement companies are not consumer- or market-oriented when developing new products. Companies gather information from either R&D specialists or sales managers and their opinions are highly reflected in new product development. The study's results will help companies recognize the importance of understanding consumers' unmet needs in advance to develop new products in the future.

Analysis on the Problems of U.S.-Korea Air Services Agreement and Recommend Action for its Improvement- (한.미항공협정(韓.美航空協定)의 문제점(問題點)과 개선방향(改善方向))

  • Hong, Soon-Kil
    • The Korean Journal of Air & Space Law and Policy
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    • v.1
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    • pp.125-146
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    • 1989
  • This paper is examine the problems of U.S.-Korea Air Service Agreement and recommend some directions for its improvement under the rapidly changing circumstance and growing importance of Korean penisula. Since the provisional agreement of 1949, U.S. -Korea Air Service Agreement has consistently been favorable to U.S. side. Fair and equal opportunity is the principle and basis of the bilateral air agreement. Notwithstanding such principle, it is only the U.S. carriers who can freely enter into any market, under the discretion of business strategy, while Korean carrier can serve only three points including Honolulu. In an effort to recitify such serious imbalance, Korea continuousely requested additional rights and has given utmost efforts to accommodate requests made by U.S. carries without much success. When we review aviation market between Korea and U.S. under the present agreement, Korea is fully open to U.S. carries as they can connect from any or all points in the U.S. via any or all points in Korea and all points beyond Korea. Increased number of U.S. carriers are enjoying greater utilization of the opportunity accorded them. Four(4) U.S. carries now operate to Korea using thirteen(13) gateway points and about one hundred fifty(150) on-line points in the U.S. such imbalance can be well understood when we review the exchange of traffic rights between the U.S. and the Pacific rim countries. During the yeras following the 1978 agreement with Korea, the U.S. proceeded to sign liberal agreements with Thailand, Taiwan, Singapore and the Phillipines. In exchange, the U.S. granted the four Pacific rim countries substantially greater rights than were granted to Korea, although Korea was the first Asian nation to sign a pro-competitive aviation agreement which granted U.S. carriers unrestricted market access and pricing flexibility. Moreover, Korea ranks the 2nd trading and tourist partner to the U.S. among the Pacific rim countries (Japan is the largest partner to the U.S. in terms of both trade and tourist market). In this paper such problems in the Korea-U.S. Air Services Agreement are analyzed in terms of historical perspective, U.S. Aviation policy, imbalance status in detail cases, discrimination to Korea comparing to other Asian countries, and theoretical application. And further it discusses current aviation issues between Korea and U.S. such as the ratification of 1980 MOU and various doing business issues of U.S. carriers in Korea. Finally, this paper concludes the analysis and suggests some directions to improve and rectify the problems and imbalance of U.S.-Korea Air Services Agreement in question.

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An Empirical Study on the Different Interindustrial Pricing Strategies of Internet Retailers (인터넷 소매상 가격 전략의 산업 의존성에 관한 실증연구)

  • 홍정유;김주성;남순해;이수정;고석하
    • Journal of Information Technology Application
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    • v.3 no.3
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    • pp.41-69
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    • 2001
  • This paper compares the price strategies of Korean internet retailers against those of Korean traditional retailers in regard to books, CD\\`s, cosmetics, softwares, PC and peripherals, and electronic home appliances. The data shows that the average prices of books, CD\\`s, and cosmetics are cheaper in the internet market than in the traditional market when there is a large purchase. However, when there is a small purchase, the average prices of books and CD\\`s are more expensive in the internet market than in the traditional market. In other cases, the difference of the average prices in the two markets was negligible. When there is a large purchase, the dispersion of prices of books is smaller in the internee market than in the traditional market. In other cases, the dispersion of prices is smaller in the internet market than in the traditional market, but the difference was negligible to be statistically significant. The findings imply that internet retailers generally pursue a specialization strategy against traditional retailers by factors other than prices. Internee retailers seem to pursue price competition against traditional retailers only for large purchases in some cheap commodity industries. It is also found that the internet shopping-malls managed or owned by existing traditional retailers or manufactures are rare and are operated dependently on existing distribution channels. The findings also imply that the Internet market begins to be established only in some cheap commodity industries and the Internet market has yet to be generally established in Korea.

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A Suggestion for Surface Reflectance ARD Building of High-Resolution Satellite Images and Its Application (고해상도 위성 정보의 지표 반사도 Analysis-Ready Data (ARD) 구축과 응용을 위한 제언)

  • Lee, Kiwon;Kim, Kwangseob
    • Korean Journal of Remote Sensing
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    • v.37 no.5_1
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    • pp.1215-1227
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    • 2021
  • Surface reflectance, as a product of the absolute atmospheric correction process of low-orbit satellite imagery, is the basic data required for accurate vegetation analysis. The Commission on Earth Observation Satellite (CEOS) has conducted research and guidance to produce analysis-ready data (ARD) on surface reflectance products for immediate use by users. However, this trend is still in the early stages of research dealing with ARD for high-resolution multispectral images such as KOMPSAT-3A and CAS-500, as it targets medium- to low-resolution satellite images. This study first summarizes the types of distribution of ARD data according to existing cases. The link between Open Data Cube (ODC), the cloud-based satellite image application platforms, and ARD data was also explained. As a result, we present practical ARD deployment steps for high-resolution satellite images and several types of application models in the conceptual level for high-resolution satellite images deployed in ODC and cloud environments. In addition, data pricing policies, accuracy quality issue, platform applicability, cloud environment issues, and international cooperation regarding the proposed implementation and application model were discussed. International organizations related to Earth observation satellites, such as Group on Earth Observations (GEO) and Committee on Earth Observation Satellites (CEOS), are continuing to develop system technologies and standards for the spread of ARD and ODC, and these achievements are expanding to the private sector. Therefore, a satellite-holder country looking for worldwide markets for satellite images must develop a strategy to respond to this international trend.

A Study on Selecting Factors of Container Shuttle Carrier by Logistics Companies in the Port Hinterland (항만배후단지 셔틀 운송사 선정요인의 중요도에 관한 연구)

  • Choi, Boyoung;Kim, Sangyoul;Park, Ho
    • Journal of Korea Port Economic Association
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    • v.37 no.2
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    • pp.107-118
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    • 2021
  • This study investigates the strategies that are important for selecting shuttle carriers and logistics warehouses. In container transportation, competitive pricing has become an order qualifier due to the establishment of the standard freight rate system. As a result of this study, it can be seen that both logistics warehouses and shuttle carriers place greater importance on the partnerships with companies and employee education. Besides those two factors, the punctuality of delivery is found to be important for the quality of transportation. Therefore, companies must continue to increase their competitiveness. As customer service of the shuttle carrier, resolving the loss or damage and claim handling part is evaluated more importantly in the logistics warehouse than the ablity to resolve unexpected event. The future strategy should focus on resolving the loss/damage and claim handling factors so that companies can be competitve in the future. Based on research results, logistics warehouses and shuttle carriers can establish different marketing strategies to maintain a firm position on the market by securing competitive advantage within port hinterland.

The Influence of the Relationship between Consumer and Tie-in Promotion on Loyalty: Focusing on the Difference between Target Customers and Non-target Customers of Tie-in Promotion

  • Lee, Eun Mi;Park, Hyun Hee;Jeon, Jung Ok
    • Asia Marketing Journal
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    • v.16 no.2
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    • pp.39-57
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    • 2014
  • There has been recognition of the increasing importance of cooperation as an element of marketing strategy. Such cooperation is confined to four levels based on product development, sales promotion, pricing arrangements, and place (or distribution) mechanisms as the usual marketing 4Ps mixed (Varadarajan 1986). At present, however, little is known about the nature of tie-in promotion as a cooperative sales promotion comparing three other levels. The primary goal of this study is to examine the effect of consumer - tie-in promotion relationship on loyalty. The construct of consumer - tie-in promotion relationship is based on the previous research on consumer-brand relationship. In addition, this study divides the concept of loyalty into host brand loyalty and partner brand loyalty to reflect the characteristics of tie-in promotion including program in order to determine the effect of the consumer - tie-in promotion relationship on loyalty. The results showed that the three dimensions of the consumer - tie-in promotion relationship (i.e., commitment, intimacy, and interdependence) had significantly positive effect on program loyalty. The effect of program loyalty is significantly on both host and partner brand loyalty. This study empirically tested the relationships among consumer - tie-in promotion relationship, program loyalty, host brand loyalty, and partner brand loyalty, and then compared with the difference in the suggested model for the target customers and non-target customers. As a result, for target customers, intimacy and interdependence among dimensions of consumer - tie-in promotion relationship had significantly positive influence on program loyalty. In case of non-target customers, however, commitment and interdependence among dimensions of consumer - tie-in promotion relationship had significantly positive influence on program loyalty. Also, program loyalty had significantly positive impact on host brand loyalty and partner brand loyalty in both target and non-target customers. This study has significance in that it addresses the need to identify research and academic implications by analyzing the consumer - tie-in promotion relationship to determine the relationship between tie-in promotion and loyalty, which has not been clearly described by previous studies. Furthermore, this study builds a foundation for firms and managers actively using tie-in promotion to establish tie-in promotion strategies that can maximize loyalty for both host and partner brands from the consumers' point of view.

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A Study on Analysis and Enhancement Strategy of South Korea's Defense Industry Exports Amidst Global Geopolitical Crisis (세계 지정학적 위기 속에서 한국의 방산수출 분석 및 강화 전략 연구)

  • Dongbum Kim;Youngsam Yoon
    • Convergence Security Journal
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    • v.24 no.2
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    • pp.181-188
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    • 2024
  • Amid global geopolitical crises that are heightening tensions worldwide, the importance of national security is being reevaluated. Consequently, South Korea is gaining attention in the global defense market due to its superior technology, competitive pricing, and rapid delivery capabilities. The increasing international demand for defense materials offers opportunities for the development of the domestic defense industry and has the potential to lead to long-term defense strategies and an expansion of exports. In particular, the development of future advanced weapons systems and the expansion of defense exports are likely to be possible through a deep understanding of the international political and economic situation and proactive defense diplomacy. This study analyzes the impact of current global geopolitical crises on Korea's defense industry and presents effective strategies based on these findings, including innovative improvements to defense acquisition systems and the discovery of overseas defense cooperation partners to strengthen defense exports. This strategic approach aims to balance domestic consumption with exports, enhance military strength, and improve the country's standing in the international community. Therefore, efforts are needed to ensure the sustainable growth of the defense industry, enabling South Korea to achieve economies of scale and play a pivotal role in the global defense industry.

An Empirical Study on Business-Viability-Assessment Method Based on Subscription Software Model (구독형SW 모델의 사업성 평가 방안에 관한 실증연구)

  • Kigon Park
    • The Journal of the Institute of Internet, Broadcasting and Communication
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    • v.24 no.4
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    • pp.155-165
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    • 2024
  • Software as a Service (SaaS) has become one of the fastest-growing software business models in recent years. Even during the economic downturn following the pandemic, the SaaS business has emerged as a crucial model for IT companies. The revenue structure of SaaS, which is based on the subscription economy model, ensures that users pay only for the services used. In other words, SaaS operates on a subscription-based billing model, thus providing subscribers access to software uploaded to cloud computers via the Internet. This study aimed to explore the manner by which software-solution firms have to counteract the decline in profit and loss sales caused by changing their business-model orientation from on-premise deployment software to subscription-based software. Additionally it analyzes a method for selecting a subscription-based pricing model and rapidly recovering the investment costs via quantitative business-viability assessment. By calculating subscription fees via a more quantitative business-viability evaluation instead of focusing on conventional business-planning methods that rely on qualitative methods, companies are expected to be equipped in providing services to customers at reasonable costs. This strategy will facilitate them in leading emerging growth sectors.