Construction of Preferred Product Profiles and Product Differentiation

Abstract

This paper illustrates a methodology called choice modeling (CM) that allows a comparison between beef quality preference profiles of three different merchandising groups in South Korea. The CM data was collected from three equally proportioned retailer, wholesaler and importer groups in South Korea by a mail survey. Multinomial logit model (MNL) estimation of the CM data showed that all three merchandising groups currently define preferences for imported beef cut with narrow range and specificity. The choice modeling (CM) technique that was applied in this study is found to be effective in eliciting product profile of a beef cut that is preferred specifically by a particular merchandising group. Construction of a preferred product profile of a beef cut for each merchandising group provides a basis for marginal analysis of factor level changes on buyers' purchasing choices. Information on preferred product profiles and marginal analysis of three merchandising groups' beef purchasing behavior can facilitate differentiated product development and marketing programs at different stages of the beef supply chain in Korea.