Doctoral Thesis-Dong Hwan, Kim - Applying in the Bottled Water and Water Purifier Product Market in Korea

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Doctoral Thesis-Dong Hwan, KimㆍSung Ho, Lee†

School of Business Administration, University of Seoul

Explaining the Formation and Change of Product Meaning by the Social Cognitive Dynamics Theory in a Product Market :

Applying in the Bottled Water and Water Purifier Product Market in Korea

Abstract

This study examined the following topics using the theory of sociocognitive dynamics in a product market (Rosa, Porac, Runser-Spanjol and Saxon 1999). In the respective Korean markets of the drinking water and the water purifier, the producer's behavior and conceptual system affect the producer's product meaning, and the meaning of the product is changed by an interactive process that affects consumer behavior, conceptual system, and product meaning. These processes were considered.

The main data collected and analyzed were the interview contents of producers and consumers in the respective markets. Fourteen people have the experiences of working in the drinking water market, and 16 people worked in the water purifier market. In addition, we collected and analyzed interview data with 20 people from professional groups, water-related associations, research institutes, analytical institutions, academia, public officials, water-related businessmen. For consumer groups, we collected and analyzed 19 housewives consumers.

In the hypothesis 1 ('negative media and legal system changed the conceptual system of producers'), in both the drinking water and water purifiers markets, the conceptual system of producers were changed by negative media reports, thereby converting the product meanings. In other words, the distrust of tap water and the deterioration of the social environment had a profound effect on the industrial development of drinking water and water purifiers, but the water purifier showed an explosive increase, while the drinking water was found to show a relatively moderate increase. The difference between drinking water and water purifiers is that water purifiers are not affected by the legal system, but drinking water is not permitted under the marketing permission (1995) for drinking water (environmental impact assessment, water quality improvement charges, advertisements, etc.) Turned into a licensed company, but some drinking water companies were found to have failed to grow properly due to the restrictions of various laws. This phenomenon also shows that the sales growth of the drinking water was higher than that of the water purifier until it was allowed to be marketed when looking at the sales status of the drinking water and the change in the water purifier in the secondary data.

As to whether changes in the initial producer's concept influenced the meaning of producer's products (hypothesis 2), the drinking water brought about a variety of marketing changes (through dealer sales, mart sales, online sales, etc.) and renewed the drinking water intake source to strengthen competitiveness. In order to prevent the phenomenon of insufficient production compared to sales volume, the OEM (Order of Origin) brand was used, and the brand also brought about a change in behavior from one company to one brand. The change in the meaning of producer products (hypothesis 2) also changed the initial consumer’s understanding of product concept (hypothesis 3). Consumers are not simply choosing to drink water, but to choose through functions, nature, cleanliness, health, hygiene, safety and price. It was found that the process of drinking water evolved from a single type of tap water to tap water and then drinking water. In hypothesis 4, the hypothesis that the initial consumer conceptual system and the consumer's product meaning affected producers’ behaviors and new conceptual systems reflects a trend that emphasizes the cleanliness of water sources, the container material, design, color, functional water, distribution of PB products, and price. The hypothesis 5 (The new conceptual system of producers and the conceptual system of consumers brought about a change in product meaning from the producer and consumer perspectives) contained the meaning of health and natural minerals in the concept of simple drinking water, evolving along with the functional water and/or the drinking water products of emotional images.

In the water purifier market, hypothesis 1 showed a tendency similar to that of drinking water market. The hypothesis 2 (the conceptual system and product meaning of the early water purifiers resulted in changes in the conceptual system and product meaning of the initial consumers of the water purifier and then the conceptual system of the producer) was supported. Related to the hypothesis, the producers acted on their own with producing extermination measures and performance certifications. In the case of Hypothesis 3 (the initial consumer's product meaning of the water purifier changed the producer's behavior and conceptual system), consumers became sensitive to information on water purifiers, such as quality and hygiene issues for various water purifiers, and switched from selective products to essential products. In addition, the concept of health, refinement of use, and development of original technologies such as filters were introduced. In the case of hypothesis 4 (the conceptual system of water purifiers changed the consumer's various conceptual systems and product meanings through changes in product meaning of producers), the service system and follow-up management were established, being changed from one-time sales, such as door-to-door sales. Moreover, the participation of large companies in the water purifier industry started to draw a new genre map.

This study considers Rosa et al.'s (1999) social cognitive theory to be highly valuable by empirically confirm‎ing through evidences of drinking water and water purifiers. The social cognitive change was shown by the endogenous variables suggested in the research model, and it played an important and unique role in the expansion of the model by using the exogenous variables of the law, institution, and social environment (press). Marketers, namely, proactively inform the consumers of the concept and product meaning of the producer, and fully understanding the intention of the consumer to realize the opportunities and market activation that occur in the market when the consumer's concept and product meaning are successfully formed.

Based on these results, it is considered that even in the case of the water industry, which is a public arena among the water industry, if the dynamic theory of the private sector is well digested, it can create an opportunity to strengthen competitiveness. For example, in the water purifier industry, the water industry recently introduced cases in which producers have newly formed relationships with consumers through approaches such as coordination and doctor system that have been used since the 2000s, such as water doctors, safety checks, and water coordination. It is worth noting the implementation of these service business innovations.

Keywords: Water industry, Drinking water, Water purifier, Producer, Consumer, Product meaning, Marketing of product meaning formation, Product market, Social cognition, Dynamics, Social environment, Legal system

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