• Journal of Global Scholars of Marketing Science
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• v.19 no.4
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• pp.24-31
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• 2009

Firms produce various products that differ by function, design, color, etc. Product proliferation occurs for three different reasons. When there exist economies of scope, the unit cost for a product is lower when it is produced in conjunction with another product than when it is produced separately. Second, consumers are heterogeneous in the sense that they have different tastes, preferences, or price elasticities. A firm can earn more profit by segmenting consumers into different groups with similar characteristics. For example, product proliferation helps a firm increase profits by satisfying various consumer needs more precisely. The third reason for product proliferation is based on strategy. Producing a number of products can not only deter entry by providing few niches, but can also cause a firm to react efficiently to a low-price entry. By producing various products, a firm can reduce niches so that potential entrants have less incentive to enter. Moreover, a firm can produce new products in response to entry, which is called fighting brands. That is, when an entrant tries to attract consumers with a low price, an incumbent introduces a new lower-quality product while maintaining the price of the existing product. The drawback of product proliferation, however, is cannibalization. Some consumers who would have bought a high-price product switch to a low-price product. Moreover, it is possible that proliferation can decrease profits when a new product is less differentiated from a rival’s than is the existing product because of more severe competition. Many studies have analyzed the effect of product line rivalry in the areas of economics and marketing. They show how a monopolist can solve the problem of cannibalization by adjusting quality in a market where consumers differ in their preferences for quality. They find that a consumer who prefers high-quality products will obtain his or her most preferred quality, but a consumer who has not such preference will obtain less than his or her preferred quality to reduce cannibalization. This study analyzed the effects of product line rivalry in a duopoly market with two types of consumers differentiated by quality preference. I assume that the two firms are asymmetric in the sense that an incumbent can produce both high- and low-quality products, while an entrant can produce only a low-quality product. The effects of product proliferation can be explained by comparing the market outcomes when an incumbent produces both products to those when it produces only one product. Compared to the case in which an incumbent produces only a high-quality product, the price of a low-quality product tends to decrease in a consumer segment that prefers low-quality products because of more severe competition. Prices, however, tend to increase in a segment with high preferences because of less severe competition. It is known that when firms compete over prices, it is optimal for a firm to increase its price when its rival increases its price, which is called a strategic complement. Since prices are strategic complements, we have two opposing effects. It turns out that the price of a high-quality product increases because the positive effect of reduced competition outweighs the negative effect of strategic complements. This implies that an incumbent needs to increase the price of a high-quality product when it is also introducing a low-quality product. However, the change in price of the entrant’s low-quality product is ambiguous. Second, compared to the case in which an incumbent produces only a low-quality product, prices tend to increase in a consumer segment with low preferences but decrease in a segment with high preferences. The prices of low-quality products decrease because the negative effect outweighs the positive effect. Moreover, when an incumbent produces both kinds of product, the price of an incumbent‘s low-quality product is higher, even though the quality of both firms’ low-quality products is the same. The reason for this is that the incumbent has less incentive to reduce the price of a low-quality product because of the negative impact on the price of its high-quality product. In fact, the effects of product line rivalry on profits depend not only on changes in price, but also on sales and cannibalization. If the difference in marginal cost is moderate compared to the difference in product quality, the positive effect of product proliferation outweighs the negative effect, thereby increasing the profit. Furthermore, if the cost difference is very large (small), an incumbent is better off producing only a low (high) quality product. Moreover, this study also analyzed the effect of product line rivalry when a firm can determine product characteristics by focusing on the issue of fighting brands. Recently, Korean air and Asiana airlines have established budget airlines called Jin air and Air Busan, respectively, to confront the launching of budget airlines such as Hansung airline and Jeju air, among others. In addition, as more online bookstores have entered the market, a leading off-line bookstore Kyobo began its own online bookstore. Through fighting brands, an incumbent with a high-quality product can increase profits by producing an additional low-quality product when its low-quality product is more differentiated from that of the entrant than is its high-quality product.

• Journal of Korean Academy of Nursing
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• v.7 no.2
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• pp.43-59
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• 1977

The Community Health Service considers the family as a service unit and places the emphasis of its service on the health problems and the nursing needs of the family rather than the individual. From the conceptual point of view that tile community health service is both health maintenance and health promotion of the family, the community health nurse should have a knowledge of the growth and development of the family and be responsible for the comprehensive support of normal family development. The community health nurse often is in a position to make a real contribution to normal family development. In order to investigate the relationship between the areas of nursing need and family development, the following objectives were established 1. To discover the general characteristics of the study population by the stage of family development. 2. To discover specific nursing needs in relation to the family developmental stage, and to determine the intensity of the nursing needs and the ability of the family to cope with these needs. 3. To discover overall family health nursing problems in relation to the family developmental stage and determine the intensity of the nursing need and the problem solving ability of family. Definitions : The family developmental stages as classified by Dually were used stage 1. Married couples(without children) stage 2. Childbearing Families (oldest child birth to 30 months of age) stage 3. Families with preschool children (oldest child 2½-to 6 years) stage 4. Families with schoolchildren (oldest child 6 to 13 years). stage 5. Families with teenagers (oldest child 13 to 20 years) stage 6. Families as launching centers (first child gone to last child′s leaving home). stage 7. Middle- aged parents (empty nest to retirement) stage 8. Aging family member (retirement to death of both spouses) The areas of nursing need were defined as those used in the study, "A Comprehensive Study about Health and Nursing Need and a Social Diagram of the Community", by tile Nursing research Institute and Center for population. and Family Planning, July 1974. The study population defiled and selected were 260 nuclear families ill two myron of Kang Hwa Island. Percent, mean value and F- test were utilized in tile statistical analysis of the study result. Findings : 1. General characteristics of the study population by tile family developmental stage ; 1)The study population was distributed by the family developmental stage as follows : stage 1 : 3 families stage 2 : 13 families stage 3 : 24 families stage 4 : 41 families stage 5 : 50 families stage 6 : 106 families stage 7 : 13 families stage 8 : 10 families 2) Most families had 4 or 5 members except for those in stage, 1, 7, and 8. 3) The parents′ present age was older in the higher developmental stage and their age at marriage was also younger in the higher developmental stages. 4) The educational level of parents was primarily less than elementary school irrespective of the developmental stage. 5) More than half of parents′ occupations were listed as laborers irrespective of the developmental stage, 6) More than half of the parents were atheists irrespective of the developmental stage. 7) The higher the developmental stage(from stage 2 to stage 6 ), the wider the distribution of children′s ages. 8) More than half of the families were of middle or lower socio-economic level. 2. Problems in specific areas of nursing need by family developmental stage, the intensity of nursing need and the problem solving ability of the family : 1) As a whole, many problems, irrespective of the developmental stage, occurred in tile areas of Housing and Sanitation, Eating Patterns, Housekeeping, Preventive Measures and Dental care. Problems occurring ill particular stages included the following ; stage 1 : Prevention of Accident stage 2 : Preventive Vaccination, Family Planning. stage 3 : Preventive Vaccination, Maternal Health, Family Planning, Health of Infant and Preschooler. stage 4, 5 : Preventive Vaccination, Family Planning, Health of School Children. stage 6 : Preventive Vaccination, Health of School Children. 2) The intensity of the nursing need in the area of Acute and Chronic Diseases was generally of moderate degree or above irrespective of the developmental stages except for stage 1. Other areas of need listed as moderate or above were found in the following stages: stage 1 : Maternal Health stage 3 . Horsing and Sanitation, Prevention of Accident. stage 4 . Housing and Sanitation. stage 5 : Housing and Sanitation, Diagnostic and Medical Care. stage 6 : Diagnostic and Medical care stage 7 : Diagnostic and Medical Care, Housekeeping. stage 8 : Housing and Sanitation, Prevention of Accident, Diagnostic and Medical Care, Dental Care, Eating Patterns, Housekeeping. 3) Areas of need with moderate problem solving ability or less were as follows : stage 1 : Diagnostic and Medical Care, Maternal Health. stage 2 : Prevention of Accident, Acute and Chronic Disease, Dental Care. stage 3 : Housing and Sanitation, Acute and Chronic Disease, Diagnostic and Medical Care, Preventive Measure, Dental Care, Maternal Health, Health of Infant and preschooler, Eating Patterns. stage 4 : Housing and Sanitation, Prevention of Accident, Diagnostic and Medical Care, Preventive Measure, Dental Care, Maternal Health, Health of New Born, Health of Infant and Preschooler, Health of school Children, Eating Patterns, Housekeeping. stage 5 . Housing and Sanitation, Prevention of Accident, Acute and Chronic Disease, Diagnostic and Medical Care, Preventive Measure, Dental Care, Preventive Vaccination, Maternal Health, Eating Patterns. stage 7, 8 : Housing and Sanitation, Prevention of Accident, Acute and Chronic Disease, Diagnostic and Medical Care, Preventive Measures, Dental Care, Preventive Vaccination, Eating Patterns , Housekeeping. Problem occurrence, the degree of nursing need and the degree of problem solving ability 1 nursing need areas for the family as a whole were as follows : 1) The higher the stages(except stage 1 ), the lower the rate of problem occurrence. 2) The higher the stage becomes, the lower the intensity of the nursing need becomes. 3) The higher the stages (except stages 7 and 8), the higher. the problem solving ability. Conclusions ; 1) When the nursing care plan for the family is drawn up, depending upon the stage of family development, higher priority should be give to nursing need areas ① at which problems were shown to occur ② where the nursing need is shown to be above moderate degree and ③ where the problem solving ability was shown to be of moderate degree. 2) The priority of the nursing service should be Placed ① not on those families in the high developmental stage but on those families in the low developmental stage ② and on those areas of need shown in stages 7 and 8 where the degree nursing need was high and the ability to cope low.