Due to COVID 19, we are facing unprecedented phenomena. Among various industries, the aviation industry, as it is directly affected by the corona crisis is actively establishing various survival strategies, such as expanding cargo transportation. The market size of air cargo transportation is continuously increasing due to the characteristics that distinguish it from other transportation, and as individualism and selfishness deepen in the aftermath of COVID 19, it can be inferred that the concept of reciprocity within distribution channels will become important in the post-corona era. The specific contents of this study(research question) are as follows. First, as a central member of the air logistics distribution channel, logistics service companies business process and the sub-dimensions of trust of are identified, and how trust is built with transportation companies is investigated. Second, the effect of such trust on the various performances of logistics service companies is analyzed. Third, we examine whether the influences of the sub-dimensions of trust change according to the perceived reciprocity of logistics service companies. In addition, we investigate whether the perceived reciprocity changed before and after the corona situation. In particular, this study theoretically integrates the concepts of trust and commitment, which have been distinguished in many prior studies, to improve the parsimony and practicality of the research model. This study will be able to present useful academic and practical implications by empirically examining how trust is built between members of the air logistics distribution channel and furthermore, how much it affects the performance of logistics service companies, and by identifying the moderating effect of reciprocity.
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.
In regard to the regulations related to the RPA(Remotely Piloted Aircraft), which is sometimes called in other countries as UA(Unmanned Aircraft), ICAO stipulates the regulations in the 'RPAS manual (2015)' in detail based on the 'Chicago Convention' in 1944, and enacts provisions for the Rules of UAS or RPAS. Other contries stipulates them such as the Federal Airline Rules (14 CFR), Public Law (112-95) in the United States, the Air Transport Act, Air Transport Order, Air Transport Authorization Order (through revision in "Regulations to operating Rules on unmanned aerial System") based on EASA Regulation (EC) No.216/2008 in the case of unmanned aircaft under 150kg in Germany, and Civil Aviation Act (CAA 1998), Civil Aviation Act 101 (CASR Part 101) in Australia. Commonly, these laws exclude the model aircraft for leisure purpose and require pilots on the ground, not onboard aricraft, capable of controlling RPA. The laws also require that all managements necessary to operate RPA and pilots safely and efficiently under the structure of the unmanned aircraft system within the scope of the regulations. Each country classifies the RPA as an aircraft less than 25kg. Australia and Germany further break down the RPA at a lower weight. ICAO stipulates all general aviation operations, including commercial operation, in accordance with Annex 6 of the Chicago Convention, and it also applies to RPAs operations. However, passenger transportation using RPAs is excluded. If the operational scope of the RPAs includes the airspace of another country, the special permission of the relevant country shall be required 7 days before the flight date with detail flight plan submitted. In accordance with Federal Aviation Regulation 107 in the United States, a small non-leisure RPA may be operated within line-of-sight of a responsible navigator or observer during the day in the speed range up to 161 km/hr (87 knots) and to the height up to 122 m (400 ft) from surface or water. RPA must yield flight path to other aircraft, and is prohibited to load dangerous materials or to operate more than two RPAs at the same time. In Germany, the regulations on UAS except for leisure and sports provide duty to avoidance of airborne collisions and other provisions related to ground safety and individual privacy. Although commercial UAS of 5 kg or less can be freely operated without approval by relaxing the existing regulatory requirements, all the UAS regardless of the weight must be operated below an altitude of 100 meters with continuous monitoring and pilot control. Australia was the first country to regulate unmanned aircraft in 2001, and its regulations have impacts on the unmanned aircraft laws of ICAO, FAA, and EASA. In order to improve the utiliity of unmanned aircraft which is considered to be low risk, the regulation conditions were relaxed through the revision in 2016 by adding the concept "Excluded RPA". In the case of excluded RPA, it can be operated without special permission even for commercial purpose. Furthermore, disscussions on a new standard manual is being conducted for further flexibility of the current regulations.
The purpose of this study is to survey the successful cases of small and medium Business Systematization Cognition by examining their entrepreneurial characteristics and analysing the factors affecting their success. To that end, previous studies on the association types of small businesses were studied. A research model was developed, and research hypotheses for an empirical analysis were established upon it. Suh et al. (2010) insist on the importance of Small Business Systematization in Korea but also show that small business performance is suffering: they are too small to stand alone. That is why association is so crucial for them: they must stand together. Unfortunately, association is difficult, as they have few specific links and little motivation. Even in franchising networks, association tends to be initiated by big franchisers, not small ones. In that sense, association among small businesses is crucial for their long-term survival. With this in mind, this study examines how they think and feel about the issue of 'Industrial Classification', how important Industrial Classification is to their business success, and what kinds of problems it raises in the markets. This study seeks the different cognitions among the association types of small businesses from the perspectives of participation motivation, systematization expectation, policy demand level, and management performance. We assume that different industrial classification types of small businesses will have different cognitions concerning these factors. There are four basic industrial classification types of small businesses: retail sales, restaurant, service, and manufacturing. To date, most of the studies in this area have focused on collecting data on the external environments of small businesses or performing statistical analyses on their status. In this study, we surveyed 4 market areas in Busan, Masan, and Changwon in Korea, where business associations consist of merchants, shop owners, and traders. We surveyed 330 shops and merchants by sending a questionnaire or visiting. Finally, 268 questionnaires were collected and used for the analysis. An ANOVA, T-test, and regression analyses were conducted to test the research hypotheses. The results demonstrate that there are differences in cognition depending upon the industrial classification type. Restaurants generally have a higher cognition concerning job offer problems and a lower cognition concerning their competitiveness. Restaurants also depend more on systematization expectation than do the other industrial classification types. On the policy demand level, restaurants have a higher cognition. This study identifies several factors that are contributing to management performance through differences in cognition that depend upon association type: systematization expectation and policy demand level have positive effects on management performance; participation motivation has a negative effect on management performance. We confirm also that the image factors of different cognitions are linked to an awareness of the value of systematization and that these factors show sequential and continual patterns in the course of generating performances. In conclusion, this study carries significant implications in its classifying of small businesses into the four different associational types (retail sales, restaurant, services, and manufacturing). We believe our study to be the first one to conduct an empirical survey in this subject area. More studies in this area will likely use our research frameworks. The data show that regionally based industrial classification associations such as those in rural cities or less developed areas tend to suffer more problems than those in urban areas. Moreover, restaurants suffer more problems than the norm. Most of the problems raised in this study concern the act of 'associating itself'. Most associations have serious difficulties in associating. On the other hand, the area where they have the least policy demand is that of service types. This study contributes to the argument that associating, rather than financial assistance or management consulting, promotes the start-up and managerial performance of small businesses. This study also has some limitations. The main limitation is the number of questionnaires. We could not survey all the industrial classification types across the country because of budget and time limitations. If we had, we could have produced many more useful results and enhanced the precision of our analysis. The history of systemization is very short and the number of industrial classification associations is relatively low in Korea. We should keep in mind, though, that this is very crucial to systemization entrepreneurs starting their businesses, as it can heavily affect their chances of success. Being strongly associated with each other might be critical to the business success of industrial classification members. Thus, the government needs to put more effort and resources into supporting the drive of industrial classification members to become more strongly associated.
Even with the most advanced aviation technology benefits, aircraft accidents are constantly occurring while air passenger transportation volume is expected to double in the next 15 years. Since it is not possible to secure aviation safety only by the post aircraft accident safety action of accident investigations, it has been recognized and consensus has been formed that proactive and predictive prevention measures are necessary. In this sense, the aviation safety management system (SMS) was introduced in 2008 and has been carried out in earnest since 2011. SMS is a proactive and predictive aircraft accident preventive measure, which is a mechanism to eliminate the fundamental risk factors by approaching organizational factors beyond technological factors and human factors related to aviation safety. The methodology is to collect hazards in all the sites required for aircraft operations, to build a database, to analyze the risks, and through managing risks, to keep the risks acceptable or below. Therefore, the improper implementation of SMS indicates that the aircraft accident prevention is insufficient and it is to be directly connected with the aircraft accident. Reports of duty performance related hazards including their own errors are essential and most important in SMS. Under the policy of just culture for voluntary reporting, the guarantee of information providers' anonymity, non-punishment and non-blame should be basically secured, but to this end, under-reporting is stagnant due to lack of trust in their own organizations. It is necessary for the accountable executive(CEO) and senior management to take a leading role to foster the safety culture initiating from just culture with the safety consciousness, balancing between safety and profit for the organization. Though a Ministry of Land, Infrastructure and Transport's order, "Guidance on SMS Implementation" states the training required for the accountable executive(CEO) and senior management, it is not legally binding. Thus it is suggested that the SMS training completion certificates of accountable executive(CEO) and senior management be included in SMS approval application form that is legally required by "Korea Aviation Safety Program" in addition to other required documents such as a copy of SMS manual. Also, SMS related items are missing in the aircraft accident investigation, so that organizational factors in association with safety culture and risk management are not being investigated. This hinders from preventing future accidents, as the root cause cannot be identified. The Aircraft Accident Investigation Manuals issued by ICAO contain the SMS investigation wheres it is not included in the final report form of Annex 13 to the Convention on International Civil Aviation. In addition, the US National Transportation Safety Board(NTSB) that has been a substantial example of the aircraft accident investigation for the other accident investigation agencies worldwide does not appear to expand the scope of investigation activities further to SMS. For these reasons, it is believed that investigation agencies conducting their investigations under Annex 13 do not include SMS in the investigation items, and the aircraft accident investigators are hardly exposed to SMS investigation methods or techniques. In this respect, it is necessary to include the SMS investigation in the organization and management information of the final report format of Annex 13. In Korea as well, in the same manner, SMS item should be added to the final report format of the Operating Regulation of the Aircraft and Railway Accident Investigation Board. If such legal and institutional improvement methods are complemented, SMS will serve the purpose of aircraft accident prevention effectively and contribute to the improvement of aviation safety in the future.
The rule of the Warsaw Convention of 1929 are well known and still being all over the world. The Warsaw Convention is undoubtedly the most widely accepted private international air law treaty with some 140 countries. In the international legal system for air transportation, the Warsaw Convention has played a major role for more than half century, and has been revised many times in consideration of the rapid developments of air high technology, changes of social and economic circumstances, need for the protection of passengers. Some amendments became effective, but others are still not effective. As a result, the whole international legal system for air transportation is at past so complicated and tangled. However, the 'Warsaw system' consists of the Warsaw Convention of 1929 the Guadalajara Convention of 1961, a supplementary convention, and the following six protocols: (1) the Hague Protocol of 1955, (2) the Guatemala Protocol of 1971, (3) the Montreal Additional Protocols, No.1, (4) the Montreal Additional Protocol No.2, (5) the Montreal Additional Protocol No.3, and (6) the Montreal Additional Protocol No.4. of 1975. As a fundamental principle of the air carrier's liability in the international convention and protocols, for instance in the Warsaw Convention and the Hague Protocol, the principle of limited liability and a presumed fault system has been adopted. Subsequently, the Montreal Inter-carrier Agreement of 1966, the Guatemala City Protocol, the Montreal Additional Protocol No.3, and the Montreal Additional Protocol No. 4 of 1975 maintained the limited liability, but substituted the presumed liability system by an absolute liability, that is, strict liability system. The Warsaw System, which sets relatively low compensation limits for victims of aircraft accidents and regulates the limited liability for death and injury of air passengers, had become increasingly outdated. Japanese Airlines and Inter-carrier Agreement of International Air Transport Association in 1995 has been adopted the unlimited liability of air carrier in international flight. The IATA Inter-Carrier Agreement, in which airlines in international air transportation agree to waive the limit of damages, was long and hard in coming, but it was remarkable achievement given the political and economic realities of the world. IATA deserves enormous credit for bringing it about. The Warsaw System is controversial and questionable. In order to find rational solution to disputes between nations which adopted differing liability systems in international air transportation, we need to reform the liability of air carriers the 'Warsaw system' and fundamentally, to unify the liability system among the nations. The International Civil Aviation Organization(ICAO) will therefore reinforce its efforts to further promote a legal environment that adequately reflects the public interest and the needs of the parties involved. The ICAO Study Group met in April, 1998, together with the Drafting Committee. The time between the "Special Group on the Modernization and Consolidation of the 'Warsaw system'(SGMW)" and the Diplomatic Conference must be actively utilized to arrange for profound studies of the outstanding issues and for wide international consultations with a view to narrowing the scope of differences and preparing for a global international consensus. From 11 to 28 May 1999 the ICAO Headquarters at Montreal hosted a Diplomatic Conference convened to consider, with a view to adoption, a draft Convention intended to modernize and to integrate replace the instruments of the Warsaw system. The Council of ICAO convened this Conference under the Procedure for the Adoption of International Conventions. Some 525 participants from 121 Contracting States of ICAO attended, one non-contracting State, 11 observer delegations from international organizations, a total of 544 registered participants took part in the historic three-week conference which began on 10 May. The Conference was a success since it adopted a new Convention for the Unification of Certain Rules for International Carriage by Air. The 1999 Montreal Convention, created and signed by representatives of 52 countries at an international conference convened by ICAO at Montreal on May 28, 1999, came into effect on November 4, 2003. Representatives of 30 countries have now formally ratified the Convention under their respective national procedures and ratification of the United States, which was the 30th country to ratify, took place on September 5, 2003. Under Article 53.6 of the Montreal Convention, it enters into force on the 60th day following the deposit of the 30th instrument of ratification or acceptation. The United States' ratification was deposited with ICAO on September 5, 2003. The ICAO have succeeded in modernizing and consolidating a 70-year old system of international instruments of private international law into one legal instrument that will provide, for years to come, an adequate level of compensation for those involved in international aircraft accidents. An international diplomatic conference on air law by ICAO of 1999 succeeded in adopting a new regime for air carrier liability, replacing the Warsaw Convention and five other related legal instruments with a single convention that provided for unlimited liability in relation to passengers. Victims of international air accidents and their families will be better protected and compensated under the new Montreal Convention, which modernizes and consolidates a seventy-five year old system of international instruments of private international law into one legal instrument. A major feature of the new legal instrument is the concept of unlimited liability. Whereas the Warsaw Convention set a limit of 125,000 Gold Francs (approximately US$ 8,300) in case of death or injury to passengers, the Montreal Convention introduces a two-tier system. The first tier includes strict liability up to l00,000 Special Drawing Rights (SDR: approximately US$ 135,000), irrespective of a carrier's fault. The second tier is based on presumption of fault of a carrier and has no limit of liability. The 1999 Montreal Convention also includes the following main elements; 1. In cases of aircraft accidents, air carriers are called upon to provide advance payments, without delay, to assist entitled persons in meeting immediate economic needs; the amount of this initial payment will be subject to national law and will be deductable from the final settlement; 2. Air carriers must submit proof of insurance, thereby ensuring the availability of financial resources in cases of automatic payments or litigation; 3. The legal action for damages resulting from the death or injury of a passenger may be filed in the country where, at the time of the accident, the passenger had his or her principal and permanent residence, subject to certain conditions. The new Montreal Convention of 1999 included the 5th jurisdiction - the place of residence of the claimant. The acceptance of the 5th jurisdiction is a diplomatic victory for the US and it can be realistically expected that claimants' lawyers will use every opportunity to file the claim in the US jurisdiction - it brings advantages in the liberal system of discovery, much wider scope of compensable non-economic damages than anywhere else in the world and the jury system prone to very generous awards. 4. The facilitation in the recovery of damages without the need for lengthy litigation, and simplification and modernization of documentation related to passengers. In developing this new Montreal Convention, we were able to reach a delicate balance between the needs and interests of all partners in international civil aviation, States, the travelling public, air carriers and the transport industry. Unlike the Warsaw Convention, the threshold of l00,000 SDR specified by the Montreal Convention, as well as remaining liability limits in relation to air passengers and delay, are subject to periodic review and may be revised once every five years. The primary aim of unification of private law as well as the new Montreal Convention is not only to remove or to minimize the conflict of laws but also to avoid conflict of jurisdictions. In order to find a rational solution to disputes between nations which have adopted differing liability systems in international air transport, we need fundamentally to reform their countries's domestic air law based on the new Montreal Convention. It is a desirable and necessary for us to ratify rapidly the new Montreal Convention by the contracting states of lCAO including the Republic of Korea. According to the Korean and Japanese ideas, airlines should not only pay compensation to passengers immediately after the accident, but also the so-called 'condolence' money to the next of kin. Condolence money is a gift to help a dead person's spirit in the hereafter : it is given on account of the grief and sorrow suffered by the next of kin, and it has risen considerably over the years. The total amount of the Korean and Japanese claims in the case of death is calculated on the basis of the loss of earned income, funeral expenses and material demage (baggage etc.), plus condolence money. The economic and social change will be occurred continuously after conclusion of the new Montreal Convention. In addition, the real value of life and human right will be enhanced substantially. The amount of compensation for damage caused by aircraft accident has increased in dollar amount as well as in volume. All air carrier's liability should extend to loss of expectation of leisure activities, as well as to damage to property, and mental and physical injuries. When victims are not satisfied with the amount of the compensation for damage caused by aircraft accident for which an airline corporation is liable under the current liability system. I also would like to propose my opinion that it is reasonable and necessary for us to interpret broadly the meaning of the bodily injury on Article 17 of the new Montreal Convention so as to be included the mental injury and condolence. Furthermore, Korea and Japan has not existed the Air Transport Act regulated the civil liability of air carrier such as Air Transport Act (Luftverkehrsgestz) in Germany. It is necessary for us to enact "the Korean Air Transport Contract Act (provisional title)" in order to regulate the civil liability of air carrier including the protection of the victims and injured persons caused by aircraft accident.
1. Introduction Today Internet is recognized as an important way for the transaction of products and services. According to the data surveyed by the National Statistical Office, the on-line transaction in 2007 for a year, 15.7656 trillion, shows a 17.1%(2.3060 trillion won) increase over last year, of these, the amount of B2C has been increased 12.0%(10.2258 trillion won). Like this, because the entry barrier of on-line market of Korea is low, many retailers could easily enter into the market. So the bigger its scale is, but on the other hand, the tougher its competition is. Particularly due to the Internet and innovation of IT, the existing market has been changed into the perfect competitive market(Srinivasan, Rolph & Kishore, 2002). In the early years of on-line business, they think that the main reason for success is a moderate price, they are awakened to its importance of on-line service quality with tough competition. If it's not sure whether customers can be provided with what they want, they can use the Web sites, perhaps they can trust their products that had been already bought or not, they have a doubt its viability(Parasuraman, Zeithaml & Malhotra, 2005). Customers can directly reserve and issue their air tickets irrespective of place and time at the Web sites of travel agencies or airlines, but its empirical studies about these Web sites for reserving and issuing air tickets are insufficient. Therefore this study goes on for following specific objects. First object is to measure service quality and service recovery of Web sites for reserving and issuing air tickets. Second is to look into whether above on-line service quality and on-line service recovery have an impact on overall service quality. Third is to seek for the relation with overall service quality and customer satisfaction, then this customer satisfaction and loyalty intention. 2. Theoretical Background 2.1 On-line Service Quality Barnes & Vidgen(2000; 2001a; 2001b; 2002) had invented the tool to measure Web sites' quality four times(called WebQual). The WebQual 1.0, Step one invented a measuring item for information quality based on QFD, and this had been verified by students of UK business school. The Web Qual 2.0, Step two invented for interaction quality, and had been judged by customers of on-line bookshop. The WebQual 3.0, Step three invented by consolidating the WebQual 1.0 for information quality and the WebQual2.0 for interactionquality. It includes 3-quality-dimension, information quality, interaction quality, site design, and had been assessed and confirmed by auction sites(e-bay, Amazon, QXL). Furtheron, through the former empirical studies, the authors changed sites quality into usability by judging that usability is a concept how customers interact with or perceive Web sites and It is used widely for accessing Web sites. By this process, WebQual 4.0 was invented, and is consist of 3-quality-dimension; information quality, interaction quality, usability, 22 items. However, because WebQual 4.0 is focusing on technical part, it's usable at the Website's design part, on the other hand, it's not usable at the Web site's pleasant experience part. Parasuraman, Zeithaml & Malhorta(2002; 2005) had invented the measure for measuring on-line service quality in 2002 and 2005. The study in 2002 divided on-line service quality into 5 dimensions. But these were not well-organized, so there needed to be studied again totally. So Parasuraman, Zeithaml & Malhorta(2005) re-worked out the study about on-line service quality measure base on 2002's study and invented E-S-QUAL. After they invented preliminary measure for on-line service quality, they made up a question for customers who had purchased at amazon.com and walmart.com and reassessed this measure. And they perfected an invention of E-S-QUAL consists of 4 dimensions, 22 items of efficiency, system availability, fulfillment, privacy. Efficiency measures assess to sites and usability and others, system availability measures accurate technical function of sites and others, fulfillment measures promptness of delivering products and sufficient goods and others and privacy measures the degree of protection of data about their customers and so on. 2.2 Service Recovery Service industries tend to minimize the losses by coping with service failure promptly. This responses of service providers to service failure mean service recovery(Kelly & Davis, 1994). Bitner(1990) went on his study from customers' view about service providers' behavior for customers to recognize their satisfaction/dissatisfaction at service point. According to them, to manage service failure successfully, exact recognition of service problem, an apology, sufficient description about service failure and some tangible compensation are important. Parasuraman, Zeithaml & Malhorta(2005) approached the service recovery from how to measure, rather than how to manage, and moved to on-line market not to off-line, then invented E-RecS-QUAL which is a measuring tool about on-line service recovery. 2.3 Customer Satisfaction The definition of customer satisfaction can be divided into two points of view. First, they approached customer satisfaction from outcome of comsumer. Howard & Sheth(1969) defined satisfaction as 'a cognitive condition feeling being rewarded properly or improperly for their sacrifice.' and Westbrook & Reilly(1983) also defined customer satisfaction/dissatisfaction as 'a psychological reaction to the behavior pattern of shopping and purchasing, the display condition of retail store, outcome of purchased goods and service as well as whole market.' Second, they approached customer satisfaction from process. Engel & Blackwell(1982) defined satisfaction as 'an assessment of a consistency in chosen alternative proposal and their belief they had with them.' Tse & Wilton(1988) defined customer satisfaction as 'a customers' reaction to discordance between advance expectation and ex post facto outcome.' That is, this point of view that customer satisfaction is process is the important factor that comparing and assessing process what they expect and outcome of consumer. Unlike outcome-oriented approach, process-oriented approach has many advantages. As process-oriented approach deals with customers' whole expenditure experience, it checks up main process by measuring one by one each factor which is essential role at each step. And this approach enables us to check perceptual/psychological process formed customer satisfaction. Because of these advantages, now many studies are adopting this process-oriented approach(Yi, 1995). 2.4 Loyalty Intention Loyalty has been studied by dividing into behavioral approaches, attitudinal approaches and complex approaches(Dekimpe et al., 1997). In the early years of study, they defined loyalty focusing on behavioral concept, behavioral approaches regard customer loyalty as "a tendency to purchase periodically within a certain period of time at specific retail store." But the loyalty of behavioral approaches focuses on only outcome of customer behavior, so there are someone to point the limits that customers' decision-making situation or process were neglected(Enis & Paul, 1970; Raj, 1982; Lee, 2002). So the attitudinal approaches were suggested. The attitudinal approaches consider loyalty contains all the cognitive, emotional, voluntary factors(Oliver, 1997), define the customer loyalty as "friendly behaviors for specific retail stores." However these attitudinal approaches can explain that how the customer loyalty form and change, but cannot say positively whether it is moved to real purchasing in the future or not. This is a kind of shortcoming(Oh, 1995). 3. Research Design 3.1 Research Model Based on the objects of this study, the research model derived is . 3.2 Hypotheses 3.2.1 The Hypothesis of On-line Service Quality and Overall Service Quality shows, Step 1 and Step 2 are significant, and mediation variable has a significant effect on dependent variables and so does independent variables at Step 3, too. And there needs to prove the partial mediation effect, independent variable's estimate ability at Step 3(Standardized coefficient
shows, Step 1 and Step 2 are significant, and mediation variable has a significant effect on dependent variables and so does independent variables at Step 3, too. And there needs to prove the partial mediation effect, independent variable's estimate ability at Step 3(Standardized coefficient
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