A study on the consumer preference in Korean telematics market

Abstract

Telematics is an amalgamation of the words "Telecommunication" and "Informatics". Telematics services include navigation, traffic information, emergency assistance, and other value added services. In this study, consumer preferences for telematics services were studied in terms of service features and purchasing time by conjoint analysis and RTP method. In the empirical results, current consumer"s satisfaction remains at low level, but consumers still express repurchase intention and recommendation intention to others. The empirical results prove that upgrading navigation and traffic information service, VRM service are the most important factors for both current and potential consumers, and later availability for the services put a negative impact to consumer preferences. Conjoint results indicate that consumer preferences change over time with service features. The study found that there were statistically significant differences in consumer preferences for telematics services, with eight different types of service features, in each of the two time periods considered. In terms of preferences overtime, statistically significant differences were found in the index of declining willingness to pay for eight pairs of service levels at two different time periods. That is, consumers appear to discount current telematics service features more rapidly than future telematics service features, if such features were to become available today. That is, future service holds their value in the minds of consumers for longer periods of time. This study identified that earlier findings about the effect of time on the willingness to pay for technology-driven consumer durable innovations (HDTV) and services (Internet) can be extended to the case of telematics, which includes both features of consumer durable product and technology-driven service. From the empirical results, this study suggests marketing implications for telematics service providers. First, both OEMs an...