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Abstract

When Korea`s retail industry was liberalized, new store formats such as large discount stores and Super Supermarket(SSMs) have grown. New types of business have borne significant influence on traditional market. Traditional markets have been in gradual decline since they fail to meet to consumer`s purchasing behavior. The South Korean government has been making sustained efforts to revitalize the modernization of traditional markets since 2004. This research is conducted to analyze how changes in the distribution of different types of distributors influence the consumer`s purchasing behaviors depending on the changes in the market environment. The purpose of this research is to present a policy to invigorate consumer-oriented traditional markets by analyzing the consumption behavior among major retail channels at a point when competition among retail channels is becoming intensified. In order to examine the effect of the spatial competitive landscape among major retail channels on consumption behavior, an empirical analysis was conducted with 613 consumers in 6 cities nationwide, using the multiple regression model. This research identified three main areas of factors. The analysis result indicates that the physical factor (time required to go to the traditional market), socioeconomic factors (the number of vehicles owned and average monthly income), and competitive factors (intensity of competition in spatial locations and average monthly spending in supermarkets) have significant influence on consumption patterns of consumers. The findings present that the Korean government should go ahead with policies aimed to revitalize traditional markets, keeping in mind the factors that influence the consumption patterns of customers based on these results. We propose that the policy supporting traditional markets need to be a customized-strategy, considering traditional market`s characteristic.

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