How to Undertake Architectural Innovation in Food Industry: The case of South Korean New Food Product Market

Abstract

New food products market in South Korea shows characteristics of bandwagon effect, hunger marketing, and viral marketing. Some products have shown explosive consumer responses after launching in the market. After a few months, some products are discontinued where others are still attracting consumers. This study tries to explain the different diffusion results of new food products, based on their innovativeness. Consumers respond differently to new food products based on its innovation types, architectural and modular. This study evaluates market performance of several new food products which have drawn explosive responses after launching in South Korea food market. Binary logistic regression model and Cox-proportional hazards model are applied to explain market performances of the new food products by consumer innovativeness and innovation types of new food products, modular and architectural. The result identifies consumer innovativeness as a significant determinant at the initial period of both innovation types in new food product consumption. However, the consumer innovativeness only affects purchase of new food products with modular innovation in the long term, but does not on products with architectural innovation. The results explain the diffusion of purchase increase to all consumers in the new food products market with architectural innovation. They also explain the short term purchase expansion of new food products with modular innovation, but the purchase disappearance in the long term with launching.