Arab boycotts of Danish products, Australian boycotts of French products and Chinese consumer aversion toward Japanese products are all examples of how adverse actions at the country level might impact consumers' behavior. The animosity literature has examined how consumers react to the adverse actions of other countries, and how such animosity impacts consumers' attitudes and preferences for products from the transgressing country. For example, Chinese consumers are less likely to buy Japanese products because of Japanese atrocities during World War II and the unjust economic dealings of the Japanese (Klein, Ettenson and Morris 1998). The marketing literature, however, has not examined how consumers react to adverse actions committed by their own country against other countries, and whether such actions affect their attitudes towards purchasing products that originated from the adversely affected country. The social psychology literature argues that consumers will experience a feeling called collective guilt, in response to such adverse actions. Collective guilt stems from the distress experienced by group members when they accept that their group is responsible for actions that have harmed another group (Branscombe, Slugoski, and Kappenn 2004). Examples include Americans feeling guilty about the atrocities committed by the U.S. military at Abu Ghraib prison (Iyer, Schamder and Lickel 2007), and the Dutch about their occupation of Indonesia in the past (Doosje et al. 1998). The primary aim of this study is to examine consumers' perceptions of adverse actions by members of one's own country against another country and whether such perceptions affected their attitudes towards products originating from the country transgressed against. More specifically, one objective of this study is to examine the perceptual antecedents of collective guilt, an emotional reaction to adverse actions performed by members of one's country against another country. Another objective is to examine the impact of collective guilt on consumers' perceptions of, and preference for, products originating from the country transgressed against by the consumers' own country. If collective guilt emerges as a significant predictor, companies originating from countries that have been transgressed against might be able to capitalize on such unfortunate events. This research utilizes the animosity model introduced by Klein, Ettenson and Morris (1998) and later expanded on by Klein (2002). Klein finds that U.S. consumers harbor animosity toward the Japanese. This animosity is experienced in response to events that occurred during World War II (i.e., the bombing of Pearl Harbor) and more recently the perceived economic threat from Japan. Thus this study argues that the events of Word War II (i.e., bombing of Hiroshima and Nagasaki) might lead U.S. consumers to experience collective guilt. A series of three hypotheses were introduced. The first hypothesis deals with the antecedents of collective guilt. Previous research argues that collective guilt is experienced when consumers perceive that the harm following a transgression is illegitimate and that the country from which the transgressors originate should be responsible for the adverse actions. (Wohl, Branscombe, and Klar 2006). Therefore the following hypothesis was offered: H1a. Higher levels of perceived illegitimacy for the harm committed will result in higher levels of collective guilt. H1b. Higher levels of responsibility will be positively associated with higher levels of collective guilt. The second and third hypotheses deal with the impact of collective guilt on the preferences for Japanese products. Klein (2002) found that higher levels of animosity toward Japan resulted in a lower preference for a Japanese product relative to a South Korean product but not a lower preference for a Japanese product relative to a U.S. product. These results therefore indicate that the experience of collective guilt will lead to a higher preference for a Japanese product if consumers are contemplating a choice that inv olves a decision to buy Japanese versus South Korean product but not if the choice involves a decision to buy a Japanese versus a U.S. product. H2. Collective guilt will be positively related to the preference for a Japanese product over a South Korean product, but will not be related to the preference for a Japanese product over a U.S. product. H3. Collective guilt will be positively related to the preference for a Japanese product over a South Korean product, holding constant product judgments and animosity. An experiment was conducted to test the hypotheses. The illegitimacy of the harm and responsibility were manipulated by exposing respondents to a description of adverse events occurring during World War II. Data were collected using an online consumer panel in the United States. Subjects were randomly assigned to either the low levels of responsibility and illegitimacy condition (n=259) or the high levels of responsibility and illigitemacy (n=268) condition. Latent Variable Structural Equation Modeling (LVSEM) was used to test the hypothesized relationships. The first hypothesis is supported as both the illegitimacy of the harm and responsibility assigned to the Americans for the harm committed against the Japanese during WWII have a positive impact on collective guilt. The second hypothesis is also supported as collective guilt is positively related to preference for a Japanese product over a South Korean product but is not related to preference for a Japanese product over a U.S. product. Finally there is support for the third hypothesis, since collective guilt is positively related to the preference for a Japanese product over a South Korean product while controlling for the effect of product judgments about Japanese products and animosity. The results of these studies lead to several conclusions. First, the illegitimacy of harm and responsibility can be manipulated and that they are antecedents of collective guilt. Second, collective guilt has an impact on a consumers' decision when they face a choice set that includes a product from the country that was the target of the adverse action and a product from another foreign country. This impact however disappears from a consumers' decision when they face a choice set that includes a product from the country that was the target of the adverse action and a domestic product. This result suggests that collective guilt might be a viable factor for company originating from the country transgressed against if its competitors are foreign but not if they are local.
The main purpose of this study was to test the effect of the structured information on the sleep amount of the patients undergoing open heart surgery. This study has specifically addressed to the Following two basic research questions: (1) Would the structed in formation influence in the reduction of sleep disturbance related to anxiety and Physical stress before and after the operation? and (2) that would be the effects of the structured information on the level of preoperative state anxiety, the hormonal change, and the degree of behavioral change in the patients undergoing an open heart surgery? A Quasi-experimental research was designed to answer these questions with one experimental group and one control group. Subjects in both groups were matched as closely as possible to avoid the effect of the differences inherent to the group characteristics, Baseline data were also. collected on both groups for 7 days prior to the experiment and found that subjects in both groups had comparable sleep patterns, trait anxiety, hormonal levels and behavioral level. A structured information as an experimental input was given to the subjects in the experimental group only. Data were collected and compared between the experimental group and the control group on the sleep amount of the consecutive pre and post operative days, on preoperative state anxiety level, and on hormonal and behavioral changes. To test the effectiveness of the structured information, two main hypotheses and three sub-hypotheses were formulated as follows; Main hypothesis 1: Experimental group which received structured information will have more sleep amount than control group without structured information in the night before the open heart surgery. Main hypothesis 2: Experimental group with structured information will have more sleep, amount than control group without structured information during the week following the open heart surgery Sub-hypothesis 1: Experimental group with structured information will be lower in the level of State anxiety than control group without structured information in the night before the open heart surgery. Sub-hypothesis 2 : Experimental group with structured information will have lower hormonal level than control group without stuctured information on the 5th day after the open heart surgery Sub-hypothesis 3: Experimental group with structured information will be lower in the behavioral change level than control group without structured information during the week after the open heart surgery. The research was conducted in a national university hospital in Seoul, Korea. The 53 Subjects who participated in the study were systematically divided into experimental group and control group which was decided by random sampling method. Among 53 subjects, 26 were placed in the experimental group and 27 in the control group. Instruments; (1) Structed information: Structured information as an independent variable was constructed by the researcher on the basis of Roy's adaptation model consisting of physiologic needs, self-concept, role function and interdependence needs as related to the sleep and of operational procedures. (2) Sleep amount measure: Sleep amount as main dependent variable was measured by trained nurses through observation on the basis of the established criteria, such as closed or open eyes, regular or irregular respiration, body movement, posture, responses to the light and question, facial expressions and self report after sleep. (3) State anxiety measure: State Anxiety as a sub-dependent variable was measured by Spi-elberger's STAI Anxiety scale, (4) Hormornal change measure: Hormone as a sub-dependent variable was measured by the cortisol level in plasma. (5) Behavior change measure: Behavior as a sub-dependent variable was measured by the Behavior and Mood Rating Scale by Wyatt. The data were collected over a period of four months, from June to October 1981, after the pretest period of two months. For the analysis of the data and test for the hypotheses, the t-test with mean differences and analysis of covariance was used. The result of the test for instruments show as follows: (1) STAI measurement for trait and state anxiety as analyzed by Cronbachs alpha coefficient analysis for item analysis and reliability showed the reliability level at r= .90 r= .91 respectively. (2) Behavior and Mood Rating Scale measurement was analyzed by means of Principal Component Analysis technique. Seven factors retained were anger, anxiety, hyperactivity, depression, bizarre behavior, suspicious behavior and emotional withdrawal. Cumulative percentage of each factor was 71.3%. The result of the test for hypotheses show as follows; (1) Main hypothesis, was not supported. The experimental group has 282 minutes of sleep as compared to the 255 minutes of sleep by the control group. Thus the sleep amount was higher in experimental group than in control group, however, the difference was not statistically significant at .05 level. (2) Main hypothesis 2 was not supported. The mean sleep amount of the experimental group and control group were 297 minutes and 278 minutes respectively Therefore, the experimental group had more sleep amount as compared to the control group, however, the difference was not statistically significant at .05 level. Thus, the main hypothesis 2 was not supported. (3) Sub-hypothesis 1 was not supported. The mean state anxiety of the experimental group and control group were 42.3, 43.9 in scores. Thus, the experimental group had slightly lower state anxiety level than control group, howe-ver, the difference was not statistically significant at .05 level. (4) Sub-hypothesis 2 was not supported. . The mean hormonal level of the experimental group and control group were 338 ㎍ and 440 ㎍ respectively. Thus, the experimental group showed decreased hormonal level than the control group, however, the difference was not statistically significant at .05 level. (5) Sub-hypothesis 3 was supported. The mean behavioral level of the experimental group and control group were 29.60 and 32.00 respectively in score. Thus, the experimental group showed lower behavioral change level than the control group. The difference was statistically significant at .05 level. In summary, the structured information did not influence the sleep amount, state anxiety or hormonal level of the subjects undergoing an open heart surgery at a statistically significant level, however, it showed a definite trends in their relationships, not least to mention its significant effect shown on behavioral change level. It can further be speculated that a great degree of individual differences in the variables such as sleep amount, state anxiety and fluctuation in hormonal level may partly be responsible for the statistical insensitivity to the experimentation.
Journal of Korean Home Economics Education Association
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v.20
no.4
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pp.19-42
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2008
The purpose of this study was to develop practical problem-based home economics teaching.learning process plans about a unit 'the youth and consumer life' of middle school eighth-grade Technology and Home Economics by applying blended learning(BL) strategy. According to ADDIE instructional design model, this study was conducted in the following procedure: analysis, design/development, implementation, and evaluation. In the stage of design and development, the selected unit was converted into a practical problem-based unit, and practical problem-based teaching. learning process plans were designed in detail by using BL strategy. An online study room for practical problem-based home economics instruction grounded in BL strategy was prepared by using Edunet(http://community.edunet4u.net/${\sim}$consumer2). Eight-session lesson plans were mapped out, and study aids for students and materials for teachers were prepared. In the implementation stage, the first-session teaching plans that dealt with a minor question 'what preparations should be made to become a wise consumer' were utilized when instruction was provided to 115 eighth graders who were in three different province, and the other one was in a middle school in the city of Daejeon. The experimental teaching was implemented for two weeks in the following procedure: preliminary program, pre-online learning, main instruction and post- online learning. The preliminary program was carried out in a session in the classroom, and pre-online learning was provided before the main instruction was given in a session in the classroom. After the main instruction was completed, post-online learning was offered. In the evaluation stage, a survey was conducted on all the learners and teachers to find out their opinions and suggestions.
The purpose of this paper was to review the results of the subjective well-being(swb) studies performed by Hahn and coworkers in Korean culture. As the correlates of swb, we dealt with demographic/individual difference variables, intrapersonal variables, interpersonal process variables, and Korean cultural variables. We proposed that the components of swb were consisted of quality of life(cognitive swb) and overall happy feelings about one's own life(emotional swb). It was also assumed that a measure of total swb could be calculated by summated mean of cognitive swb and emotional swb measures. The data of the swb studies were analyzed and interpreted according to the above three measures of swb. The results of a nationwide survey(Hahn, 2004) from age of 19 to 75 years ald(n=2,230) showed significant simple correlation coefficients between the following demographic/individual difference variables and swb: Gender difference in swb was found(total swb r=.08, p<.001; life satisfaction r=.10, p<.001; overall emotional swb r=.05, p<.05). Men were happier than women in terms of all three measures of swb. It was also found that women appeared to experience greater positive and negative emotions. Correlation between age and emotional swb(r=.09, p<.001) was significant, but life satisfaction was not significant(r=.04, n.s). Correlations between economic status and swb were also significant(total swb r =.23, p<.001; life satisfaction r=.15 p<.001; overall emotional swb r=.15, p<.001l). Although existence of father was negatively related to emotional swb(r=-.05, p<.05), the existence of mother was not related to any of swb measures. Similarly existence of brothers was related positively to overall emotional swb, but existence of sisters was not. Though existence of son was not related to swb, daughter contributed negatively to swb(total swb -.12, p<.01; life satisfaction -.09, p<.05; emotional swb r=-.12, p<.01). We assumed that family member-in-Iaw also contributed to swb because the extended dose social networks were important in Korean culture. The results showed that the following family member-in-law variables were related to swb: Parents-in-law(total swb r=.11, p<.01; life satisfaction r=.10, p<.01; emotional swb r=.10, p<.01), father-in-law(total swb r=.11, p<.01; life satisfaction r=.11, p<.01; emotional swb r=.06, n.s). The result suggested that especially father-in-law contributed to swb through financial and social support. Correlations between emotional experiences in everyday life and swb were also presented. The range of correlation coefficients between the positive emotion measures and swb were r=.30~.48(p<.001) when the above two measures obtained at same time. But the range decreased to r=.19~32(p<.001) when the swb measure was obtained 9 month later longitudinally. Intercorrelations between positive emotional experience; and life satisfaction were r=.37~58(p<.001) when two measures were obtained at same time. We also examined the effects of the intrapersonal cognitive responses to the most stressful life event upon swb. The results of nationwide survey(n=1,021) showed that self-disclosure(total swb r=.09, p<.010; life satisfaction r=.10, p<.01; emotional swb r=.07, p<.01), rumination(total swb r=-.17, p<.001), thought avoidance(total swb r=.12, p<.001; life satisfaction r=-.08; emotional swb r=-.12, p<.001) and suppression(total swb r=-.13, p<.001; life satisfaction r=-.08, p<.05: emotional swb r=-.13, p<.001) contributed to swb. It was also suggested that mismatch between self-guide and regulatory focus contributed negatively to emotional swb. It was also found that social comparison motives and fulfillment of the motives contributed to swb. The results of a survey research(n=363 college students) revealed that the higher the general social comparison motive, the lower the swb(total swb r=-.15, P<.01: life satisfaction r=-.17. p<.01; emotional swb r=-.10, p<.05). It was also found that satisfaction level of self-evalution motive contributed positively to swb(total swb r=-.14. p<.01: life satisfaction r=-.12, p<.05; emotional swb r=.15, p<.001). Both of self-improvement motive(r=.13, p<.05) and satisfaction level of self-improvement motive(r=.12, p<.05) contributed positively to emotional swb, respectively. The above results suggested that swb was depended upon the interaction effect of social comparison motive; and level of fulfillment of the motives. We also reported the significant multiple predictors of swb in a sample of age from 60years to 89years olds. The results of multiple regression analysis showed that the significant multiple predictors of swb were past illness(β=.174, p<.001), economic status(β=.418, p<.001), marital satisfaction(β=.0841, p<.001), satisfaction of offsprins(β=.065, p<.01), expectation level of social support from offsprings(β=-.049, p<.001), and negative emotions(β=-.454. p<.001) among 16 social psychological factors. It was also found that swb was an important multiple predictors of physical health. This finding was replicated in a longitudinal study. Both of positive and negative emotional experiences were significant multiple predictors of physical health one year later. The results of the discriminant analysis showed both of total swb and positive emotional experiences contributed to discriminate the happy and healthy olds from unhappy and unhealthy olds. We paper also examined the effects of the nonnative social behaviors upon swb in Korean culture. The main hypotheses of the study(Hahn, 2006, in press) was that the important nonnative behaviors would influence on swb through both of the mediation processes of adjustment to social relationships and psychological stress. The survey data were collected from 2,129 adults age of 19 to 75, from 7 regional areas in Korea. The results of the study revealed that almost all of correlation coefficients between 15 normative social behaviors and the above three criteria w-ere significant. The fitness test results of the covariance structural equation model showed that all of the fitness indices were satisfactory (GFI=.974, AGFI=.909, NNFI=.922, NFI=.973, CFI=.974. RMR=.049, RMSEA=.073). The results of the analysis revealed that the following five path coeffi6ents from behaviors to social adjustment were significant; behavior tor family and family members(t=5.87, p<.001), courteous behavior(t=4.39, p<.001), faithful behavior (t=2.15. p<.05). collectivistic behavior(t=8.31, p<.001). Seven path coefficients from the normative behaviors to psychological stress were significant; behavior for family and family members (t=-4.63, p<.001), faithful behavior(t=-3.86, p<.001). suppression of emotional expression(t=3.99, p<.001), trustworthy and dependable behavior(t=-2.21, p<.05), collectivistic behavior(t=3.72, p<.001), effortful and diligent behavior(t=2.94, p<.001), husbandry and saving behavior(t=3.40, p<.001). The above results suggested that four normative behaviors among seven behaviors contributed negatively to psychological stress in current Korean society. The results abo confirmed the hypothesized paths from social adjustment (t=10.40, p<.001) to swb and from psychological stress(t=-19.74, p<.001) to swb. The important results of the study were discussed in terms of the Confucian traditions and recent social changes in Korean culture. Finally limitations of this review paper were discussed and the suggestions for the future study were also proposed.
Franchise businesses in South Korea have contributed to economic growth and job creation, and its growth potential remains very high. However, despite such virtues, domestic franchise businesses face many problems such as the instability of franchisor's business structure and weak financial conditions. To solve these problems, the government enacted legislation and strengthened franchise related laws. However, the strengthening of laws regulating franchisors had many side effects that interrupted the development of the franchise business. For example, legal regulations regarding franchisors have had the effect of suppressing the franchisor's leadership activities (e.g. activities such as the ability to advocate the franchisor's policies and strategies to the franchisees, in order to facilitate change and innovation). One of the main goals of the franchise business is to build cooperation between the franchisor and the franchisee for their combined success. However, franchisees can refuse to follow the franchisor's strategies because of the current state of franchise-related law and government policy. The purpose of this study to explore the effects of franchisor's leadership style on franchisee's commitment in a franchise system. We classified leadership styles according to the path-goal theory (House & Mitchell, 1974), and it was hypothesized and tested that the four leadership styles proposed by the path-goal theory (i.e. directive, supportive, participative and achievement-oriented leadership) have different effects on franchisee's commitment. Another purpose of this study to explore the how the level of franchisee's self-efficacy influences both the franchisor's leadership style and franchisee's commitment in a franchise system. Results of the present study are expected to provide important theoretical and practical implications as to the role of franchisor's leadership style, as restricted by government regulations and the franchisee's self-efficacy, which could be needed to improve the quality of the long-term relationship between the franchisor and franchisee. Quoted by Northouse(2007), one problem regarding the investigation of leadership is that there are almost as many different definitions of leadership as there are people who have tried to define it. But despite the multitude of ways in which leadership has been conceptualized, the following components can be identified as central to the phenomenon: (a) leadership is a process, (b) leadership involves influence, (c) leadership occurs in a group context, and (d) leadership involves goal attainment. Based on these components, in this study leadership is defined as a process whereby franchisor's influences a group of franchisee' to achieve a common goal. Focusing on this definition, the path-goal theory is about how leaders motivate subordinates to accomplish designated goals. Drawing heavily from research on what motivates employees, path-goal theory first appeared in the leadership literature in the early 1970s in the works of Evans (1970), House (1971), House and Dessler (1974), and House and Mitchell (1974). The stated goal of this leadership theory is to enhance employee performance and employee satisfaction by focusing on employee motivation. In brief, path-goal theory is designed to explain how leaders can help subordinates along the path to their goals by selecting specific behaviors that are best suited to subordinates' needs and to the situation in which subordinates are working (Northouse, 2007). House & Mitchell(1974) predicted that although many different leadership behaviors could have been selected to be a part of path-goal theory, this approach has so far examined directive, supportive, participative, and achievement-oriented leadership behaviors. And they suggested that leaders may exhibit any or all of these four styles with various subordinates and in different situations. However, due to restrictive government regulations, franchisors are not in a position to change their leadership style to suit their circumstances. In addition, quoted by Northouse(2007), ssubordinate characteristics determine how a leader's behavior is interpreted by subordinates in a given work context. Many researchers have focused on subordinates' needs for affiliation, preferences for structure, desires for control, and self-perceived level of task ability. In this study, we have focused on the self-perceived level of task ability, namely, the franchisee's self-efficacy. According to Bandura (1977), self-efficacy is chiefly defined as the personal attitude of one's ability to accomplish concrete tasks. Therefore, it is not an indicator of one's actual abilities, but an opinion of the extent of how one can use that ability. Thus, the judgment of maintain franchisee's commitment depends on the situation (e.g., government regulation and policy and leadership style of franchisor) and how it affects one's ability to mobilize resources to deal with the task, so even if people possess the same ability, there may be differences in self-efficacy. Figure 1 illustrates the model investigated in this study. In this model, it was hypothesized that leadership styles would affect the franchisee's commitment, and self-efficacy would moderate the relationship between leadership style and franchisee's commitment. Theoretically, quoted by Northouse(2007), the path-goal approach suggests that leaders need to choose a leadership style that best fits the needs of subordinates and the work they are doing. According to House & Mitchell (1974), the theory predicts that a directive style of leadership is best in situations in which subordinates are dogmatic and authoritarian, the task demands are ambiguous, and the organizational rule and procedures are unclear. In these situations, franchisor's directive leadership complements the work by providing guidance and psychological structure for franchisees. For work that is structured, unsatisfying, or frustrating, path-goal theory suggests that leaders should use a supportive style. Franchisor's Supportive leadership offers a sense of human touch for franchisees engaged in mundane, mechanized activity. Franchisor's participative leadership is considered best when a task is ambiguous because participation gives greater clarity to how certain paths lead to certain goals; it helps subordinates learn what actions leads to what outcome. Furthermore, House & Mitchell(1974) predicts that achievement-oriented leadership is most effective in settings in which subordinates are required to perform ambiguous tasks. Marsh and O'Neill (1984) tested the idea that organizational members' anger and decline in performance is caused by deficiencies in their level of effort and found that self-efficacy promotes accomplishment, decreases stress and negative consequences like depression and emotional instability. Based on the extant empirical findings and theoretical reasoning, we posit positive and strong relationships between the franchisor's leadership styles and the franchisee's commitment. Furthermore, the level of franchisee's self-efficacy was thought to maintain their commitment. The questionnaires sent to participants consisted of the following measures; leadership style was assessed using a 20 item 7-point likert scale developed by Indvik (1985), self-efficacy was assessed using a 24 item 6-point likert scale developed by Bandura (1977), and commitment was assessed using a 6 item 5-point likert scale developed by Morgan & Hunt (1994). Questionnaires were distributed to Korean optical franchisees in Seoul. It took about 20 days to complete the data collection. A total number of 140 questionnaires were returned and complete data were available from 137 respondents. Results of multiple regression analyses testing the relationships between the each of the four styles of leadership shown by the franchisor as independent variables and franchisee's commitment as the dependent variable showed that the relationship between supportive leadership style and commitment ($\beta$=.13, p<.001),and the relationship between participative leadership style and commitment ($\beta$=.07, p<.001)were significant. However, when participants divided into high and low self-efficacy groups, results of multiple regression analyses showed that only the relationship between achievement-oriented leadership style and commitment ($\beta$=.14, p<.001) was significant in the high self-efficacy group. In the low self-efficacy group, the relationship between supportive leadership style and commitment ($\beta$=.17, p<.001),and the relationship between participative leadership style and commitment ($\beta$=.10, p<.001) were significant. The study focused on the franchisee's self-efficacy in order to explore the possibility that regulation, originally intended to protect the franchisee, may not be the most effective method to maintain the relationships in a franchise business. The key results of the data analysis regarding the moderating role of self-efficacy between leadership behavior style as proposed by path-goal and commitment theory were as follows. First, this study proposed that franchisor should apply the appropriate type of leadership behavior to strengthen the franchisees commitment because the results demonstrated that supportive and participative leadership styles by the franchisors have a positive influence on the franchisee's level of commitment. Second, it is desirable for franchisor to validate the franchisee's efforts, since the franchisee's characteristics such as self-efficacy had a substantial, positive effect on the franchisee's commitment as well as being a meaningful moderator between leadership and commitment. Third, the results as a whole imply that the government should provide institutional support, namely to put the franchisor in a position to clearly identify the characteristics of their franchisees and provide reasonable means to administer the franchisees to achieve the company's goal.
Internet commerce has been growing at a rapid pace for the last decade. Many firms try to reach wider consumer markets by adding the Internet channel to the existing traditional channels. Despite the various benefits of the Internet channel, a significant number of firms failed in managing the new type of channel. Previous studies could not cleary explain these conflicting results associated with the Internet channel. One of the major reasons is most of the previous studies conducted analyses under a specific market condition and claimed that as the impact of Internet channel introduction. Therefore, their results are strongly influenced by the specific market settings. However, firms face various market conditions in the real worlddensity and disutility of using the Internet. The purpose of this study is to investigate the impact of various market environments on a firm's optimal channel strategy by employing a flexible game theory model. We capture various market conditions with consumer density and disutility of using the Internet.
shows the channel structures analyzed in this study. Before the Internet channel is introduced, a monopoly manufacturer sells its products through an independent physical store. From this structure, the manufacturer could introduce its own Internet channel (MI). The independent physical store could also introduce its own Internet channel and coordinate it with the existing physical store (RI). An independent Internet retailer such as Amazon could enter this market (II). In this case, two types of independent retailers compete with each other. In this model, consumers are uniformly distributed on the two dimensional space. Consumer heterogeneity is captured by a consumer's geographical location (ci) and his disutility of using the Internet channel (${\delta}_{N_i}$).
shows various market conditions captured by the two consumer heterogeneities.
(a) illustrates a market with symmetric consumer distributions. The model captures explicitly the asymmetric distributions of consumer disutility in a market as well. In a market like that is represented in
(c), the average consumer disutility of using an Internet store is relatively smaller than that of using a physical store. For example, this case represents the market in which 1) the product is suitable for Internet transactions (e.g., books) or 2) the level of E-Commerce readiness is high such as in Denmark or Finland. On the other hand, the average consumer disutility when using an Internet store is relatively greater than that of using a physical store in a market like (b). Countries like Ukraine and Bulgaria, or the market for "experience goods" such as shoes, could be examples of this market condition.
summarizes the various scenarios of consumer distributions analyzed in this study. The range for disutility of using the Internet (${\delta}_{N_i}$) is held constant, while the range of consumer distribution (${\chi}_i$) varies from -25 to 25, from -50 to 50, from -100 to 100, from -150 to 150, and from -200 to 200.
summarizes the analysis results. As the average travel cost in a market decreases while the average disutility of Internet use remains the same, average retail price, total quantity sold, physical store profit, monopoly manufacturer profit, and thus, total channel profit increase. On the other hand, the quantity sold through the Internet and the profit of the Internet store decrease with a decreasing average travel cost relative to the average disutility of Internet use. We find that a channel that has an advantage over the other kind of channel serves a larger portion of the market. In a market with a high average travel cost, in which the Internet store has a relative advantage over the physical store, for example, the Internet store becomes a mass-retailer serving a larger portion of the market. This result implies that the Internet becomes a more significant distribution channel in those markets characterized by greater geographical dispersion of buyers, or as consumers become more proficient in Internet usage. The results indicate that the degree of price discrimination also varies depending on the distribution of consumer disutility in a market. The manufacturer in a market in which the average travel cost is higher than the average disutility of using the Internet has a stronger incentive for price discrimination than the manufacturer in a market where the average travel cost is relatively lower. We also find that the manufacturer has a stronger incentive to maintain a high price level when the average travel cost in a market is relatively low. Additionally, the retail competition effect due to Internet channel introduction strengthens as average travel cost in a market decreases. This result indicates that a manufacturer's channel power relative to that of the independent physical retailer becomes stronger with a decreasing average travel cost. This implication is counter-intuitive, because it is widely believed that the negative impact of Internet channel introduction on a competing physical retailer is more significant in a market like Russia, where consumers are more geographically dispersed, than in a market like Hong Kong, that has a condensed geographic distribution of consumers.