• Journal of Distribution Research
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• v.16 no.5
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• pp.171-192
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• 2011

This paper focuses on the retail industry of industrial share of the GDP, productivity of distribution industry and input-out analysis between Korea and Japan, also results are summarized as follows. First, the share of GDP in agriculture, forestry and fisheries of the both countries is falling. That of manufacture increases in South Korea, while Japan is falling. While distribution industry shows vice versa. Employed population by industry is falling both countries also. The relative labor productivity shows that agriculture, forestry and fisheries, retail industry needs more labor, while manufacture has been met for both countries. Second, compare to Japan, the retail industry of Korea has been increased since 1990. Likewise, overall productivity of distribution industry in Korea has been increased while almost that of Japan has declined. Third, production inducement effects of Japan are greater than that of Korea. On the other hand, import inducement effects show vice versa. Fourth, as shown from the final demand of distribution industry and the rate of dependence on production inducement, we can see that the “increase in stocks” increases while gross government fixed capital formation shows vice versa. Korea's private consumption expenditure increases while Japan shows versa. South Korea's government consumption expenditure and exports are rising, on the other hand, that of Japan is declining. Fifth, the rate of dependence on distribution industry and import inducement shows the same tendency from both countries. As we can see from the private consumption expenditure, government consumption expenditure, gross government fixed capital formation, gross private fixed capital formation, increase in stocks, the rate of dependence on import inducement is more effective than the rate of dependence on production inducement. While the exports are comparatively ineffective. Sixth, the degrees of influence of retail industry are similar between Korea and Japan, while sensitivity of the Korean industry has been weakened. In this sense, strong policies are needed to boost the industry. Seventh, the investments in the retail industry of Korea showed the public-led trend, while Japan showed private sector-led investment trend. The investment trend of Korea's retail industry will be switched into private sector-led investment step by step in the future. This finding will be an important clue to set the policy direction of Korea distribution industry. Finally, both Korea and Japan are still in need of employment in retail industry. Not addressed in this paper, such as value-added-induced effects, employment inducement effect, will be remaining challenges in the following paper.

• The Journal of Korean Institute of Communications and Information Sciences
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• v.40 no.5
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• pp.903-913
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• 2015

The Korea Agency of Education, Promotion and Information Service in Food, Agriculture, Forestry and Fisheries launched a public data portal service in January 2015. The service provides customized information for consumers through an agri-food recommendation system built-in portal service. The recommendation system has fallowing characteristics. First, the system can increase recommendation accuracy by using a wide variety of agri-food related data, including SNS opinion mining, consumer's purchase data, climate data, and wholesale price data. Second, the system uses segmentation method based on consumer's lifestyle and megatrends factors to overcome the cold start problem. Third, the system recommends agri-foods to users reflecting various preference contextual factors by using recommendation algorithm, dirichlet-multinomial distribution. In addition, the system provides diverse information related to recommended agri-foods to increase interest in agri-food of service users.

• Journal of Distribution Research
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• v.17 no.4
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• pp.29-53
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• 2012

As so many marketers get to use diverse sales promotion methods, manufacturer and retailer in a channel often use them too. In this context, diverse issues on sales promotion management arise. One of them is the issue of unplanned buying. Consumers' unplanned buying is clearly better off for the retailer but not for manufacturer. This asymmetric influence of unplanned buying should be dealt with prudently because of its possibility of provocation of channel conflict. However, there have been scarce studies on the sales promotion management strategy considering the unplanned buying and its asymmetric effect on retailer and manufacturer. In this paper, we try to find a better way for a manufacturer in a channel to promote performance through the retailer's sales promotion efforts when there is potential of unplanned buying effect. We investigate via game-theoretic modeling what is the optimal cost sharing level between the manufacturer and retailer when there is unplanned buying effect. We investigated following issues about the topic as follows: (1) What structure of cost sharing mechanism should the manufacturer and retailer in a channel choose when unplanned buying effect is strong (or weak)? (2) How much payoff could the manufacturer and retailer in a channel get when unplanned buying effect is strong (or weak)? We focus on the impact of unplanned buying effect on the optimal cost sharing mechanism for sales promotions between a manufacturer and a retailer in a same channel. So we consider two players in the game, a manufacturer and a retailer who are interacting in a same distribution channel. The model is of complete information game type. In the model, the manufacturer is the Stackelberg leader and the retailer is the follower. Variables in the model are as following table. Manufacturer's objective function in the basic game is as follows: ${\Pi}={\Pi}_1+{\Pi}_2$, where, ${\Pi}_1=w_1(1+L-p_1)-{\psi}^2$, ${\Pi}_2=w_2(1-{\epsilon}L-p_2)$. And retailer's is as follows: ${\pi}={\pi}_1+{\pi}_2$, where, ${\pi}_1=(p_1-w_1)(1+L-p_1)-L(L-{\psi})+p_u(b+L-p_u)$, ${\pi}_2=(p_2-w_2)(1-{\epsilon}L-p_2)$. The model is of four stages in two periods. Stages of the game are as follows. (Stage 1) Manufacturer sets wholesale price of the first period($w_1$) and cost sharing level of channel sales promotion(${\Psi}$). (Stage 2) Retailer sets retail price of the focal brand($p_1$), the unplanned buying item($p_u$), and sales promotion level(L). (Stage 3) Manufacturer sets wholesale price of the second period($w_2$). (Stage 4) Retailer sets retail price of the second period($p_2$). Since the model is a kind of dynamic games, we try to find a subgame perfect equilibrium to derive some theoretical and managerial implications. In order to obtain the subgame perfect equilibrium, we use the backward induction method. In using backward induction approach, we solve the problems backward from stage 4 to stage 1. By completely knowing follower's optimal reaction to the leader's potential actions, we can fold the game tree backward. Equilibrium of each variable in the basic game is as following table. We conducted more analysis of additional game about diverse cost level of manufacturer. Manufacturer's objective function in the additional game is same with that of the basic game as follows: ${\Pi}={\Pi}_1+{\Pi}_2$, where, ${\Pi}_1=w_1(1+L-p_1)-{\psi}^2$, ${\Pi}_2=w_2(1-{\epsilon}L-p_2)$. But retailer's objective function is different from that of the basic game as follows: ${\pi}={\pi}_1+{\pi}_2$, where, ${\pi}_1=(p_1-w_1)(1+L-p_1)-L(L-{\psi})+(p_u-c)(b+L-p_u)$, ${\pi}_2=(p_2-w_2)(1-{\epsilon}L-p_2)$. Equilibrium of each variable in this additional game is as following table. Major findings of the current study are as follows: (1) As the unplanned buying effect gets stronger, manufacturer and retailer had better increase the cost for sales promotion. (2) As the unplanned buying effect gets stronger, manufacturer had better decrease the cost sharing portion of total cost for sales promotion. (3) Manufacturer's profit is increasing function of the unplanned buying effect. (4) All results of (1),(2),(3) are alleviated by the increase of retailer's procurement cost to acquire unplanned buying items. The authors discuss the implications of those results for the marketers in manufacturers or retailers. The current study firstly suggests some managerial implications for the manufacturer how to share the sales promotion cost with the retailer in a channel to the high or low level of the consumers' unplanned buying potential.

• Journal of Distribution Research
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• v.17 no.3
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• pp.1-24
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• 2012

Franchises have recently emerged as the most rapidly expanding industry positioned to create a large impact in the domestic economic. The Chinese franchise industry developed rapidly in the period prior and subsequent to WTO accession with more than 50% of new franchises brands emerging since 2000. M&A transactions in the Chinese franchise industry have progressed actively. In the period from 2005-2007, due to the wholesale and retail market opening in accordance with the guidelines laid forth within the MOU by the WTO the Chinese franchise market is now the largest market in the world all despite a short history of only 20 years. The amount of franchise market research on China is disproportional to its current size and development potential. Beginning in the 1990s, market research conducted by the International Franchise Association focused on emerging markets in Eastern Europe and China. While the research dealt with the Chinese investment environment, it insufficiently explained the market region and cultural environment. The purpose of this research is (i) to investigate the determinants of the performance of franchise systems in China and (ii) new contract renewals based on performance factors. This study will complement existing research in terms of the franchisee perspective. This study may also prove of the benefit to the franchise companies entering the Chinese franchise market enabling them to develop an effective strategy. This study shows that support, incentives, and system standardization by franchisor yielded a positive effect on management performance. This is consistent with previous studies by Shin (2000) and Kim (2008) targeting Korean franchises. Therefore, in the Chinese market, the franchisor must focus on support, incentives, and system standardization rather than concentrate only on the recruitment of franchisees in order to improve revenue. Hypotheses regarding franchisor control have been dismissed in existing research, in the opinion of this study, due to their complexity and inability to control the merchant as a one-kind-assessment-standard. Our findings show that the franchisees' financial condition, management ability and entrepreneurial spirit, among franchisee's characteristics, have a positive effect on franchisor's business performance and satisfaction for the franchisee. This is consistent with previous studies on headquarters' management performance of Lussier (1996), Heo and Jang (2008), and franchisees' financial condition, management ability and entrepreneurial spirit effect on franchisor's satisfaction of Weaven and Franzer (2007), Kim (2009), Han (2009), and Yoon etc. (2008). Therefore, when permitting a franchisee, financial condition, management ability, entrepreneurship of the franchisee should be carefully considered. Among relational factors between franchisor and franchisee, trust has the positive influence on the management performance of the franchisor while conflict has a negative effect. However, trust, commitment and conflict factors have been shown not to have any impact on the satisfaction of the franchise headquarters. This result is consistent with the previous studies of Pavlou and Ba (2000), Morrison (1999), Weaven and Frazer (2007), Kim and Park (1994), Sohn (2007) which show that trust between franchisor and the franchisees have a positive effect and that conflict has a negative impact on franchisor's management performance. Other factors causing a negative effective on the franchisor's management performance are a rapid environmental changes and uncertainty in the business. This is consistent with Campbell et al (2007), Kim and Kim (2009), Han and Baek (2008). Finally, the high management performance and satisfaction of the franchise headquarters has a positive effect on the intention of franchise renewal. In the case of large markets such as China, the franchisor's strategy and the role is very important. In this study, we also investigated the characteristics of franchisor and franchisee, relationship, and environmental uncertainty affecting on the management performance and satisfaction of franchisor. Recently, Korean franchises are attempting to enter foreign markets through the rise in popularity of Korean culture and entertainment commonly referred to as the Korean wave. This study provides recommendations for Korean franchises intending on entering the Chinese market. First, in order to achieve stable profits, the franchise corporation needs to support the operation of the individual franchisee through incentives and standardization of services. Second, because trust between the franchisor and franchisee has a positive effect on management performance, on-going discussion and cooperation is necessary to reduce the level of conflict.

• Journal of Distribution Research
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• v.15 no.1
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• pp.25-47
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• 2010

CS is one of the major concerns of managers in the world because it is well known to be a key medium construct for firms' superior outcome. One of the major agents for CS management is retailers. Firms try to manage not only employees but also retailers to promote CS behaviors. And so diverse incentives are used to promote their CS behaviors under diverse channel setting such as multi-channel. However in spite of the rising needs there has been scarce studies on the optimal incentive structure for a manufacturer to offer competing retailers at the multi-channel. In this paper, we try to find better way for a manufacturer to promote the competing retailers' CS behaviors. We investigated how to promote the retailers' CS behavior via game-theoretic modeling. Especially, we focus on the possible incentive, CS bonus type reward introduced in the studies of Hauser, Simester, and Wernerfelt(1994) and Chu and Desai(1995). We build up a multi stage complete information game and derive a subgame perfect equilibrium using backward induction. Stages of the game are as following. (Stage 1) Manufacturer sets wholesale price(w) and CS bonus($\eta$). (Stage 2) Both retailers in competition set CS effort level($e_i$) and retail price($p_i$) simultaneously. (Stage 3) Consumers make purchasing decisions based on the manufacturer's initial reputation and retailers' CS efforts.