Product Placement Belief and Product Usage Behavior in South Korea and the United States

PRODUCT PLACEMENT BELIEF AND PRODUCT USAGE BEHAVIOR IN SOUTH KOREA AND THE UNITED STATES

IN-MYOUNG YOU

A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ADVERTISING

UNIVERSITY OF FLORIDA

2004

In-Myoung You

To my parents, Moon-Sik You and Ok-Hyun Um; and to my lovely wife, Jung-A Choi

ACKNOWLEDGMENTS

I wish to give special thanks to Dr. Joseph Pisani (my supervisory committee chair) for his great guidance and extreme help throughout the entire thesis process. He was available whenever I needed his advice. I would also like to thank Dr. Chang-Hoan Cho for serving on my thesis committee and for his great support throughout my time here at the University of Florida. Many thanks go to Dr. Cynthia Morton for being kind enough to serve on my thesis committee members, and for allowing me to replicate her study for my thesis.

I would also like to thank all of the professors who let me conduct a survey in their classes. Dr. Gee-In Song, Dr. Joo-Ah An, and Dr. Bong-Hyun Kim allowed their student to participate in my thesis and sent the responses to me in South Korea. Steve Marshal, a doctoral student in the advertising department, welcomed me into his class for the survey.

In addition, I wish to thank my friends. They helped create good memories of my time here. I thank Jong-Hyuk and his wife; Yang-Hwan and his wife; Chang-Hyun, and other Korean Gators. I would also like to thank Jordan and Rocky, my old roommates and my first American friends with whom I experienced heartfelt friendship.

Finally, I would like to thank my family and my wife, who have always believed me. I thank my sister, Ji-Yeon, and her husband; and my brother-in-law, Jung-Sik, for listening to me and always being there. I would like to give special thanks to my Mother and Father for their years of patient guidance, and complete support. I cannot imagine being here without their support. I am indebted to them. Special thanks also go to my

iv Mother-in-law and Father-in-law, who allowed me to become a member of their family last summer. Lastly, I appreciate my lovely wife, Jung-A. She has always believed me and made me focus on my goal. I could not have completed this without her.

TABLE OF CONTENTS

page

ACKNOWLEDGMENTS ...... iv

LIST OF TABLES...... viii

ABSTRACT...... ix

CHAPTER

1 INTRODUCTION ...... 1

2 LITERATURE REVIEW...... 5

Definition of Product Placement ...... 5 Advantages and Disadvantages of Product Placement...... 6 Attitude- and Memory-Based Effectiveness of Product Placement ...... 7 Behavioral Efficacy of Product Placement...... 9 Ethical Issues in Product Placement...... 10 Cross-Cultural Studies in Product Placement...... 11 Cultural Differences between South Korea and the United States...... 12 Research Questions...... 13

3 METHODOLOGY ...... 14

Sample and Data Collection ...... 14 Survey Instrument...... 15 Operational Definition of Product Placement ...... 15 Product Placement Beliefs...... 15 Product Usage Behaviors ...... 17 Frequency of Watching Movies and Expenditure for Recreation Activities ...... 17 Demographics...... 17

4 RESULTS...... 18

Research Question 1 ...... 18 Research Question 2 ...... 21 Research Question 3 ...... 24

vi 5 DISCUSSION...... 31

Summary of Results...... 31 Managerial Implications ...... 33 Limitations...... 35

APPENDIX

A FREQUENCY STATISTICS...... 38

B QUESTIONNAIRE: ENGLISH VERSION...... 40

C QUESTIONNAIRE: KOREAN VERSION...... 43

REFERENCES ...... 46

BIOGRAPHICAL SKETCH ...... 49

vii

LIST OF TABLES

Table page

2-1 Hofstede’s cultural values Index (Rank)...... 13

3-1 Summaries of South Korea and United States samples ...... 14

3-2 Ten items about product placement beliefs...... 16

3-3 Four items about product usage behavior ...... 17

4-1 Comparisons of the means of product placement beliefs...... 19

4-2 Comparisons of the means of overall product placement beliefs...... 21

4-3 Chi-square analysis of nationality and product usage...... 22

4-4 Comparisons of the means of overall product usages ...... 23

4-5 Factor analysis for the South Korea ...... 25

4-6 Factor analysis for the United States...... 27

4-7 Multiple regression analysis for South Korea ...... 28

4-8 Multiple regression analysis for the United Sstates ...... 29

viii

Abstract of Thesis Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Master of Advertising

PRODUCT PLACEMENT BELIEF AND PRODUCT USAGE BEHAVIOR IN SOUTH KOREA AND THE UNITED STATES

In-Myoung You

December 2004

Chair: Joseph S. Pisani Major Department: Advertising

Marketers and advertising agencies have come to see product placement as an alternative to traditional ads. Product placement as a strategy has quickly become ubiquitous across media and throughout the world.

The purpose of my study was to provide globalized and practical insights about product placement to marketers and advertising agencies. We did this by conducting a cross-cultural study on beliefs about product placement, and product usage behavior comparing South Korea with the United States.

Three research questions were examined: First, we examined differences in beliefs about product placement for South Korea versus the United States. We found that the two countries differed in consumer beliefs toward product placement. South Koreans beliefs about product placement were generally more conservative than those of the

United States consumers.

ix Second, we compared two countries’ consumer product usage behavior after exposure to product placement in a movie. Results showed almost no differences in overall product usage behavior. However, analysis of sub-items showed differences in particular usage behaviors.

Third, we explored cross-cultural differences in the relationship between consumer beliefs about product placement, and product usage. Consumer beliefs about how to show a product and about concern with the appearance of ethically charged products may influence product usage behavior after watching a movie containing product placement in

South Korea. In comparison, only consumer beliefs about how to show a product affected product usage behavior after US consumers watched a movie.

The contribution of this study is in offering practical insights for marketers and advertising agencies targeting countries with different culture using a product placement strategy.

x CHAPTER 1 INTRODUCTION

As consumers were exposed to hundreds of advertisements every day and advertising messages were excessive, consumers got tired of traditional advertising. The power of traditional communication tools that delivered advertising messages to consumers naturally got weaker. Under these circumstances, marketers needed to find alternative tools to communicate more effectively with consumers. Product placement came into the spotlight of marketers and advertising agencies as an alternative strategy to traditional ads at that point.

Indeed, product placement is already ubiquitous across the media as well as the world. It is easy to see major name brands or products that are already recognized in movies, TV shows, music videos, books, and even video games across countries.

According to Galician (2004), marketers and advertising agencies in the United States paid $1.5 billion for product or brand appearances in various types of media such as films, TV programs, novels, video games, etc. Additionally, more than 1,000 brands employed product placement as a marketing strategy.

Product placement has played a major role in the film industry in terms of plot and also financial support, particularly since Reese’s Pieces appeared in the movie E.T.

(1982). This is regarded as the most successful example. Since then, the practice of product placement strategy is getting more aggressive. Cast Away (2000), starring Tom

Hanks, was like a public-relations movie for FedEx, a gigantic delivery company. From

FedEx’s airplane in the first scene to FedEx’s delivery truck in the last scene, FedEx’s

1 2 logo or company name was shown in every single scene and background. In total, the company name appeared in 70 of the 230 minutes of the movie (Kim, 2004).

Steven Spielberg’s science fiction movie, Minority Report (2002) was another good example of active product placement strategy. It contained more than 15 major name brands including Nokia, Lexus, Pepsi, American Express, Guinness, Bvlgari, Reebok,

Burger King, etc. These advertisers paid a total of $25 million, which was 25% of the total cost of production, nearly as much as Tom Cruise’s performance fee for this movie

(Kim, 2004).

German automaker, Audi, recently showcased its car via an upscale product placement strategy in Will Smith’s science-fiction movie, iRobot (2004). So far, marketers have generally placed their products or brands in the appropriate movie after the products or brands were developed, regardless of the promotion strategy. However, the Audi was already involved with the movie before the car was developed. Car and movie designers created a concept car, the Audi RSQ, and customized it for the movie.

This kind of product placement is a more aggressive format than before. It showed a new level of product placement for the future (Neer 2004).

As the practice of product placement rapidly increased, researchers’ interest in product placement also grew. Many earlier studies have found that the practice of product placement is positively related to brand attitudes, recall, and recognition (Ong and Meri, 1994; Gupta and Lord, 1998; Brennan, Dubas and Babin, 1999; D’Astous and

Chartier, 2000; Gould, Gupta and Grabner-Krauter, 2000; Karrh, Frith and Callison,

2001). Some studies show that consumers generally are concerned about the ethical issues of product placement, such as the acceptability of placing ethically charged

products. Another ethical issue is product placement’s effectiveness as a marketing tool, which is dependent on individual differences (Nebenzahl and Secunda, 1993; Gupta and

Gould, 1997).

Although earlier studies dealt mainly with consumer attitudes toward product

placement or with memory-based efficacy of product placement as mentioned above, a

more practical measure of the effectiveness of product placement for marketers or

advertising agencies may be how the beliefs, attitudes or memories of product placement

are linked to consumers’ purchase behavior. Few studies, however, focused on this kind

of relationship (Morton and Friedman, 2002). Furthermore, under circumstances where

movies and even TV programs are easily exposed to other countries’ consumers, cross-

cultural research about product placement is essential to developing an international

marketing strategy. Despite the importance of cultural studies about product placement,

cross-cultural or cross-national studies on product placement have also been insufficient

(d’Astous and Seguin, 1999; Nelson, 2002; Gould et al. 2000; Karrh et al. 2001;

McKechnie and Zhou 2003).

Since research on these topics has been limited, the current study combined these two important points. Morton and Friedman’s (2002) study to explore the relationship between product placement beliefs and product usage behavior was used as a foundation for this study. However, unlike the original study, we added the cross-cultural dimensions as additional variables for exploration.

The purpose of this study was to provide practical insights for marketers and advertising agencies who seek to approach different cultural-based countries with a product placement strategy.

Specifically, the current study used Korean consumer data about product placement

beliefs and product usage for this cross-cultural study, as opposed to Morton and

Friedman’s (2002) study using the United States consumer data. Korean data was used

for two reasons. First, South Korean and the United States have different culture in terms

of cultural dimension values, such as Hofstede’s cultural values and Hall’s contextual

dimension. Second, Korea’ advertising industry of Korea, valued at about $6.1 billion, is

the ninth-largest global advertising market as well as one of the largest advertising

markets in the Asian-Pacific area (Madden, 2004). Moreover, as the product placement

market in Korea has grown considerably in recent years, product placement is a controversial issue in Korea. Approximately 50 to 60 product placement agencies have just opened for business within the last 1 to 2 years. Advertisers spent an estimated $8.4 million in 2003 for placing their products or brands in films and TV programs. The product placement market is expected to keep growing dramatically (Kim 2003).

Considering that the product placement market in Korea only began 1 or 2 years ago, its recent growth is remarkable.

CHAPTER 2 LITERATURE REVIEW

Definition of Product Placement

In previous studies, product placement has been defined diversely by different researchers. Steorz (1987) defined product placement as “the inclusion of a brand name product package, signage, or other trademark merchandise within a motion picture, television show, or music video”, while Baker and Crawford (1995) defined it as “the inclusion of commercial products or services in any form in television or film productions in return for some sort of payment from the advertiser.” Gupta and Gould

(1997) and d’Astous and Seguin (1999) defined product placement respectively as

“incorporating brands in movies in return for money or for some promotional or other consideration” and as “the placement of products, services, brand names, the name of a firm, package, signage or other trademark merchandise in a movie, in a television program or in music video for promotional purposes by different means.”

However, there are two necessary elements in defining product placement according to Karrh (1998). The first is that product placement should be compensated, suggesting that product appearances are not unintended or unpaid. All product placements were carried out intentionally and paid. The second is that product placement could be practiced in various media such as music videos, video games, and novels, in addition to movies and TV programs. Thus, based on these two elements, Karrh (1998) defined product placement was defined as “the paid inclusion of branded products or

5 6

brand identifiers, through audio and/or visual means, within mass media programming.”

(Karrh 1998)

Advantages and Disadvantages of Product Placement

Product placement offers several advantages. Product placement has great cost

effectiveness. While the cost of product placement is relatively lower than other

advertising formats, the captive level of viewers is high because consumers cannot zip or

zap past product exposure (Bellin 2003). Zipping means “consumers fastforward through commercials as they play back a previously recorded program” and zapping is to “change channels to avoid commercials” (Belch and Belch, p361, 2001).

With the introduction of Tivo and DVR, consumer’s abilities to zip, skip, or fastforward commercials became a more serious concern among advertisers. For this reason, product placement strategies of exposing advertiser brands during the context of a program became more important marketing communication strategies among contemporary marketers. Advertisers have already started to consider sponsorship and product placement to put their brand name in a position where it is less likely to be ignored or skipped (i.e., within program, not between programs). With the increase of

DVR technology, media diversification, and the audience having multiple media options, product placement will continue to be viable part of the strategic marketing communication plan of many contemporary marketers (Miyazaki and Morgan 2001,

Parmar 2003).

Additionally, product placement has a long life span linked to great and vast potential to reach a large audience. Successful movies are often distributed into international film markets, and also come out on video and are broadcasted on TV. A product placement in successful movies has many chances to be exposed to consumers

globally. Thus, product placement may accomplish a great reach for consumers who did

not watch a movie on screen and frequency for consumers who already watched a movie

from on screen to TV. Moreover, product placement is less obtrusive than traditional advertising due to product placement is usually embedded into movies and therefore does not interfere with viewers’ movie-watching, compared with a commercial (Terry

2001). In addition, showing consumers brand usage in appropriate situations is also one of its advantages.

In the meantime, product placement also has disadvantages. While many previous researchers have suggested product placement influences consumers’ attitude,

memory, and purchase intension toward brands, it is difficult to measure actual sales

from product placement. Like other advertising forms, product placement is just one

element of the marketing mix and can not be expected to generate work for brands’ sales

in isolation.

Another is that product placement is not controllable. Brands may be described

incorrectly or misleadingly. While a good contract may reduce this kind of risk,

misrepresentation is still potentially a shortcoming (Terry 2001).

Attitude- and Memory-Based Effectiveness of Product Placement

Earlier research diversely categorized product placement based on diverse criteria

and studied the effectiveness of product placement based on their classification. Even

though there were diverse results depending on the types of products and appearances,

previous research generally suggested product placement positively influenced consumer

attitudes, recall, and recognition toward brands appearing in movies.

Gupta and Lord (1998) examined the impact of product placement on consumers’

recall in terms of product placement types, such as “prominence/subtlety” and “audio-

8 only/visual-only” presentation. The result found prominent appearance of a product brought better consumer recall compared to TV commercials as well as a subtle appearance of product. Furthermore, audio messages about products were better than visual appearances in recalling products.

Brennan, Dubas, and Babin (1999) examined audiences’ recognition of product placement depending on product placement type and exposure time. For the effectiveness of product placement types, the result of their study followed the earlier study, Gupta and Lord’s (1998) findings, to suggest prominent placement of products worked better than other types for consumer memory of products. In addition, their research also found the type of placement was a more influential factor in consumers’ recognition of the product appearing in movies than the exposure time of the product.

D’Astous and Chartier’s (2000) research classified product placement into various types based on congruity with a scene, degree of appearance, and association with a movie star to examine the effectiveness of product placement. Their findings showed positive attitudes toward product placement were obtained in three kinds of situations: when the product appeared with a movie star; when the product placement was congruent with a scene presented; and when the product was shown prominently. In the meantime, even though placement associated with the movie scene brought positive attitudes toward product placement, it reduced consumer recall and recognition of brands embedded in a movie.

Some research focused on the efficacy of product placement in TV programs and video games rather than movies (d’Astous and Seguin 1999; Nelson 2002; Russell 2002).

These studies also suggested product placement in TV programs and video games

generally influenced consumer attitudes and memory toward product placement as

previous studies on product placement in movies did.

D’Astous and Seguin (1999) experimented with the impact of product placement in

TV programs on consumer evaluations in terms of product placement types, TV program types, the brand image presented in movies, and the congruity between a product and a

TV program. The result found the type of TV program was more influential in consumer evaluation compared with the type of product placement. Regardless of product placement types, any kind of product placement in a mini-series or drama was negatively evaluated. The result of the effectiveness related to product placement type, such as the degree of product exposure, nearly followed the findings of earlier studies of product placement in movies that proposed the prominent exposure of product affected negative consumer evaluation. Additionally, the stronger congruence that was presented between

the TV program and product, the more positive the brand image was and the better the

consumer evaluations were.

Nelson (2002) attempted to study the effectiveness of product placement in video

games for the first time. This study measured consumer recall of brands appearing in

video games immediately after playing games and 5 months later. Results showed that

consumers recalled approximately 25 to 30 % of brands after playing and 10 to 15 % in

the 5-month test. Additionally, game players also indicated a generally positive attitude

toward product placement in video games like in other media.

Behavioral Efficacy of Product Placement

A previous limited number of studies have investigated the impact of product

placement on consumer purchase intention (Baker and Crawford 1995; Gould et al. 2000;

Karrh et al. 2001; Morton and Friedman 2002). Baker and Crawford (1995) found

consumers had a higher level of short-term purchase intention for the product embedded

in movies. Additionally, the studies of Gould et al. (2000) and Karrh et al. (2001) also

supported the result that product placement positively influenced purchase intention.

Morton and Friedman (2002) focused on the relationship between product placement beliefs, such as perceptions, awareness and feelings, on behaviors like trial intention or purchase intention. Their findings showed a correlation between consumer evaluation and purchase intention, while ethical belief was less likely to affect consumer behaviors.

Ethical Issues in Product Placement

The ethical issues in product placement can be composed of two kinds of issues.

One is relevant to the ethics of the product itself appearing in the movie. Another is

related to the ethics of product placement as a marketing strategy. Both of the issues are

controversial among consumers and marketers (Gould et al. 2000). Some studies have

dealt with the ethical issues of product placement (Gupta and Gould 1997; Nebenzahl and

Secunda 1993). Gupta and Gould (1997) conducted consumer acceptance of product

placement in view of ethical issues and the results followed the outcomes of prior

research. Consumers generally accepted appearances in movies for general products

more than ethically charged products such as tobacco, alcohol, and guns. Additionally,

differences in individual characteristics such as the frequency of watching movies,

attitude toward product placement, and gender influenced consumer acceptability of

product placement. Consumers, who went to movie theaters more frequently, objected

less to restrictions against product placement and who had positive attitudes toward

product placement, were more likely to be accepting of product placement. In addition,

males were more likely to accept placing ethically charged products in movies than

females.

Nebenzahl and Secunda (1993) examined attitudes and acceptability toward product placement. The results of their study also showed consumers generally had positive attitudes toward product placement. Most consumers considered product placement as a less obtrusive form of marketing communication than other advertising forms in the movie theater, even though some of them criticized product placement as a deceptive communication strategy.

Cross-Cultural Studies in Product Placement

Only three studies have researched the effectiveness of product placement in film based on cross-cultural or cross-national characteristics (Gould et al. 2000; Karrh et al.

2001; McKechnie and Zhou 2003). The results these studies showed various attitudes toward product placement in movies and TV programs across the cultures and nations, particularly between Eastern and Western cultures. Furthermore, within similar cultural bases, different attitudes toward product placement were found depending on the research.

Gould, Gupta and Grabner-Krauter (2000) were the first to study the impact of product placement on consumer attitudes and potential purchase intention cross- nationally. They analyzed consumer attitudes toward product placement in three countries (Austria, France and the United States). The results showed that consumers of the United States were more likely to accept product placement compared to other countries and also more likely to purchase products appearing in the movies.

Karrh, Frith and Callison (2001) were more focused on making cross-cultural comparisons between Eastern and Western culture, in contrast to Gould et al’s(2000) study which was tested among countries in Western culture only. In a comparison study of audience attitudes toward brand placement between Singapore and the United States

12 the researchers showed that consumers in Singapore are more likely to consider product placement as a kind of paid advertising, had more concern about the ethical dimension of product placement and had a more positive attitudes toward government regulation on product placement.

McKechine and Zhou (2003) studied differences in viewer attitudes toward product placement in movies between China and the United States based on different cultural values. According to their research, the Chinese are less likely than United States consumers to accept product placement in movies and acceptability of product placement was less influenced by the frequency of watching movies, unlike the United States consumers. Meanwhile, both the Chinese consumers and the United States consumers were similarly concerned about placing “ethically charged” products, such as cigarettes and alcohol, in films.

Cultural Differences between South Korea and the United States

A number of studies have suggested differences in cultural values between South

Korea and the United States. Hofstede’s cultural dimensions and Hall’s (1987) contextual dimensions commonly provide criteria and a theoretical rationale for clarifying cultural differences between the two countries. Hofstede’s cultural values are composed of five cultural dimensions based on work-related values (Hofstede and Bond,

1988). These are individualism (vs. collectivism), power distance, uncertainty avoidance, masculinity (vs. femininity) and confucian dynamism (vs. long-term orientation).

According to Hofstede and Bond (1988), South Korea is described as a collectivist culture, having high power distance, less tolerance for uncertainty, moderate masculinity, and high long-term orientaion. Several studies dealing with individualism reaffirm that

South Korea is a more collectivistic culture than the United States (Tyler, Miracle, and

Wilson 1997; Kim 1985; Hoare and Pares 1989). Specific Hofstede’s cultural dimension

scores of South Korea and the United States are shown in Table 2-1 (Hofstede and Bond

1988).

Table 2-1. Hofstede’s cultural values Index (Rank) Uncertainty Confucian Individualism Power distance Masculinity avoidance dynamism

U.S. 91 (1) 40 (38) 46 (43) 62 (15) 29 (14) South 18 (43) 60 (27) 85 (16) 39 (41) 75 (4) Korea

Alternately, Hall’s (1987) contextual dimensions, including the concept of high and

low context culture, are also commonly used in many cross-cultural studies. Hall (1987)

suggested the United States belonged among low-context culture countries and South

Korea was under high-context culture. In addition, many studies described South Korea

as a high-context culture and the United State as a low-context culture (Yum 1987; Kim

1985; Kang 1988; Gudykunst et al.1987).

Research Questions

Based on the literature review, especially the earlier study of Morton and Friedman

(2002), this study examines the following research questions.

• Research Question 1: Is there any difference in product placement beliefs between South Korea and the United Stated consumers?

• Research Question 2: Is there any difference in product usage behaviors after watching movies containing product placement between South Korea and the United Stated consumers?

• Research Question 3: If there are differences in product placement beliefs and product usage behaviors, is there any cultural difference in the relationship between beliefs and product usage behavior?

CHAPTER 3 METHODOLOGY

Sample and Data Collection

The sample of this study was drawn from college students attending South Korea

universities and a large Southeastern university in the United States. At ages 18-24,

people are considered the primary audience that film-makers and marketers try to entice

(Dortch 1996). College student populations fit that age range. Many earlier studies in product placement used a student sample for this reason (Gupta and Lord 1998;

Nebenzahl and Secunda 1993; Karrh et al. 2001; Morton and Friedman 2002; McKechnie and Zhou 2003). A total of 404 students from advertising classes participated in this survey and were compensated with extra course credit for their participation. Two hundred and one students from three universities in South Korea participated in this study: Gyeongsang National University, Dongshin University and Dongguk University.

Moreover, 203 students from a large Southeastern university in the United States completed the survey.

Table 3-1. Summaries of South Korea and United States samples Sample profile South Korea United States Number of respondent 201 203 Female 110 (55.0%) 138 (68.0%) Male 91 (45.0%) 65 (32.0%) Age 18 to 24 years 181 (90.0%) 202 (99.5%)

As shown in Table 3-1, the United States sample had more female respondents than

male respondents. Most participants were between 18 and 24 years old. In comparison,

14 15 the Korean sample also had more female respondents than male respondents. Of these, most respondents were between 18 and 24 years of age.

Survey Instrument

Eight items used in the survey instrument for this study were the same as those used in Morton and Friedman’s (2002) study. The Korean sample was given the Korean version of the instrument to translate the English-written survey instrument into Korean.

The survey contained the following items.

Operational Definition of Product Placement

The definition of product placement accompanied by a description of the practice of product placement was provided on the front page of the survey questionnaire:

Product placement occurs when brand named products appear in a movie or television program. For example, actual brand named products appear in the background or are used by the actor/actress in the context of the movie. In some instances, the actor/actress may state the brand name in conversations with other actors/actress in the movie.

Product Placement Beliefs

Ten items were used in the survey to measure consumer beliefs about product placement. Eight of them were taken from Morton and Friedman’s study (2002). These items were related to personal perceptions, awareness, and feelings toward as well as ethical concerns about product placement and its acceptability as an alternative to traditional commercial advertising. According to the previous studies, ethical concern may consist of the ethics of product placement as a means to approach the consumer or the ethics of the product itself (Gould, Gupta and Grabner-Krauter 2000). However, the items pertaining to the ethics of product placement in Morton and Friedman’s study were only focused on the general ethical issue of product placement as a marketing tool. In order to further explore the dimensions of ethics, in this study, therefore, two more items

16 asking about the ethically charged products were adapted from Gupta and Gould’s (1997) study supplement to the original instrument’s ethics item. One question asked the respondents’ general opinion about showing ethically charged products in a movie. The other asked their opinions about the placement of cigarettes in movies.

In the end, the beliefs about product placement were 1) ALTER, 2) ETHICS, 3)

ETHPRO, 4) ETHCIGA, 5) TICKET, 6) BANNED, 7) BELIEVE, 8) PAYMOR, 9)

FEEL, 10) RECALL. Table 3-2 shows a detailed statement for each item. These items were measured along a five-point Likert scale from strongly disagree = 1 to strongly agree = 5 based on the scale of the original study.

Table 3-2. Ten items about product placement beliefs Name Items Product placements in movies are a good alternative to ALTER traditional commercials. The idea of placing products in movies is not ethical because ETHICS the moviegoer doesn’t want to watch paid advertising. Brand tobacco, beer and liquor products should only be used ETHPRO in R-rated movies as kids don’t watch such movies. Cigarette product placements in movies should be banned ETHCIGA completely since cigarette ads are banned on TV. Product placements in movies are a good idea for keeping TICKET down the price of admission tickets. In my opinion, product placement in movies should be BANNED banned. Real products should be used extensively in movies to make a BELIEVE scene more believable. Product placements in movies can keep the price of movie PAYMOR tickets low, but I’d pay more to see a movie without them. The way the product is used in a movie scene can affect my FEEL feelings about the products. When a character that I like uses a product in a movie, I am RECALL more likely to remember the product. *Note: each item was measured by a five-point Likert scale from strongly disagree=1 to strongly agree=5

Product Usage Behaviors

The four items were employed to measure consumer reported product usage behaviors after watching a movie that contained product placement. Product usages behaviors that respondents were asked to report included the change in product trial and usage. In detail, product usages were 1) SEARCH, 2) STARTUSE, 3) STOPUSE, and 4)

TRIAL as shown in Table 3-3. All of these items were measured using dichotomous “yes and no” response categories.

Table 3-3. The Four items about product usage behavior

Items Statement

I have looked for a product in the store after seeing it in a SEARCH movie.

STARTUSE I have started using a brand after seeing it in a movie.

STOPUSE I have stopped using a brand after seeing it in a movie.

TRIAL I wanted to try a brand after seeing it in a movie.

Frequency of Watching Movies and Expenditure for Recreation Activities

Two questionnaires asked respondents to measure the frequency of watching

movies including the frequency of going to a movie theater and movie rentals. One

questionnaire asked the expenditure of recreation activities. These items were measured

with four categorized choices.

Demographics

The final section was to gather general information about gender, age and major.

One nominal questionnaire was used for the gender and two open-ended questionnaires

were used for the age and major. (See Appendix A)

CHAPTER 4 RESULTS

This study utilized the Statistical Package for Social Sciences(SPSS) to address three research questions: Research Question 1 “Is there any difference in product placement beliefs between the South Korea and the United Stated consumers?”; Research

Question 2, “Is there any difference in product usage behaviors after watching movies containing product placement between the South Korea and the United Stated consumers?”; and Research Question 3, “If there are differences in product placement beliefs and product usage behaviors, is there any cultural difference in the relationship between beliefs and product usage behavior?” The independent samples t-test was used

in order to answer Research Question 1 comparing the belief of product placement

between South Korea and the United States. In addition to the independent samples t- test, a crosstabs chi-square analysis was conducted for Research Question 2 comparing the product usages between the two countries. Finally, a factor analysis and multiple regression analysis was employed for Research Question 3 whether or not there is a different relationship between belief and product usage of the two countries’ consumers.

Research Question 1

The research question 1 was about the difference in beliefs about product placement between South Korea and the United States. Mean comparisons were made on ten items to compare beliefs toward product placement in each country. The five items containing negative beliefs about product placement (ETHICS, ETHPRO, ETHCIGA,

18 19

BANNED and PAYMOR) were coded reversely to easily compare with the items that did not include negative words.

Table 4-1. Comparisons of the means of product placement beliefs South United Korea States Items t df Mean Mean (Std. (Std. Deviation) Deviation) ALTER 3.40 3.47 Product placements in movies are a good alternative to -0.72 390.98 (0.95) (1.14) traditional commercials. ETHICS The idea of placing products in movies is not ethical 3.28 3.49 2.14* 390.96 because the moviegoer doesn’t want to watch paid (0.91) (1.09) advertising. ETHPRO Brand tobacco, beer and liquor products should only be 2.20 2.47 2.42* 386.92 used in R-rated movies as kids don’t watch such (1.00) (1.23) movies. ETHCIGA Cigarette product placements in movies should be 2.92 2.87 -0.40 379.66 banned completely since cigarette ads are banned on (1.06) (1.37) TV. TICKET 3.16 3.55 Product placements in movies are a good idea for -3.91* 402.00 (1.04) (0.98) keeping down the price of admission tickets.

BANNED 3.47 4.01 In my opinion, product placement in movies should be 5.73* 402.00 (0.95) (0.95) banned.

BELIEVE 3.51 3.74 Real products should be used extensively in movies to -2.45* 402.00 (0.93) (0.97) make a scene more believable. PAYMOR Product placements in movies can keep the price of 3.46 4.12 6.58* 402.00 movie tickets low, but I’d pay more to see a movie (1.03) (0.99) without them. FEEL 3.41 3.46 The way the product is used in a movie scene can affect -5.18 388.76 (0.87) (1.06) my feelings about the products.

RECALL 3.79 3.58 When a character that I like uses a product in a movie, I 2.11* 380.23 (0.87) (1.12) am more likely to remember the product.

South Korea N = 201. United Sates N = 203. *p＜0.05

A composite mean score was calculated for each item by group. Because of reverse coding for the five items that expressed negative beliefs, a higher mean score of those items indicated the stronger disagreement of respondents for the declarations.

Table 4-1 presents the group mean scores by item. South Korea and the United

States differ from each other in their level of agreement to for each item. Among the

South Korean participants, the mean of the tenth item RECALL (“When a character that I like uses a product in a movie, I am more likely to remember the product”) was the highest (m=3.79) and the mean of the seventh item BELIEVE (“Real products should be used extensively in movies to make a scene more believable.”) recorded the second highest (m=3.51). In contrast for the United States respondents, the mean of the eighth item PAYMOR (“Product placements in movies can keep the price of movie tickets low, but I’d pay more to see a movie without them.”) was the highest (m=4.12) and the second highest mean (m=4.01) was the sixth item BANNED (“In my opinion, product placement in movies should be banned.”).

In order to compare the mean difference of the ten individual items about beliefs of product placement between South Korea and the United States, the independent samples t-test was performed. As shown in Table 4-1, results of the independent samples t-test showed that there was a statistically significant difference(p＜.05) in seven of the ten belief items between South Korean and the United States respondents. Meanwhile, there was no statistically significant difference between the two countries in the three items—

ALTER, ETHCIGA and FELL. Among the statistically significant seven items, the

South Korean mean (m=3.79) for only one item (RECALL) was higher than the United

States (m=3.58, t = 2.11*, df = 380.23). Meanwhile, the means of the United State were

higher than the those of South Korean for the remaining six items including ETHICS (S.

Korea m=3.28, U.S. m=3.49, t = 2.14*, df = 391.96), ETHPRO (South Korea=2.20,

United States=2.47, t = 2.42*, df = 386.92), TICKET (South Korea=3.16, United

States=3.55, t = - 3.91*, df = 402), BANNED (South Korea=3.47, United States=4.01, t =

5.73*, df = 402), BELIEVE (South Korea=3.51, United States=3.74, t = - 2.45*, df =

402) and PAYMOR (South Korea=3.46, United States=4.12, t = 6.58*, df = 402).

Table 4-2. Comparisons of the means of overall product placement beliefs South Korea United States Items t df Mean Mean (Std. Deviation) (Std. Deviation)

3.26 3.48 BELIEF - 4.46* 402 All ten items (0.47) (0.51)

*p＜.05

In order to make it easy to compare synthetic belief of product placement between

the two countries, the data were recoded. That is, the values of the ten items were

summed up. This new variable, named BELIEF, represented a composite mean across

the ten items. The independent samples t-test using the mean scores of this total value of

each of the two countries was conducted. As shown in Table 4-2, the result indicated that

there was a statistically significant mean difference in overall product placement beliefs.

The mean scores of the two countries were 3.26 for South Korea and 3.48 for the United

States respectively. Additionally, there was a statistically significant difference in synthetic belief of product placement between two countries (t = - 4.46*, df = 402).

Research Question 2

The research question 2 examined the difference in consumer product usage behavior after the exposure to product placement in a movie between two countries. A

22 chi-square analysis tested the relationship between nationality and each of four items including the changes in product usage: SEARCH, STARTUSE, STOPUSE, and TRIAL.

Table 4-3. Chi-square analysis of nationality and product usage Nationality Items South United Total Korea States 121 101 222 No SEARCH (60.2%) (49.8%) (55%) Chi-Square = 4.45*, df = 1 80 102 182 Yes I have looked for a product in the (39.8%) (50.2%) (45%) store after seeing it in a movie. 201 203 404 Total (100%) (100%) (100%) 153 140 293 No STARTUSE (76.1%) (69.0%) (72.5%) Chi-Square = 2.59, df = 1 48 63 111 Yes I have started using a brand after (23.9%) (31.0%) (27.5%) seeing it in a movie. 201 203 404 Total (100%) (100%) (100%) 186 188 374 No STOPUSE (92.5%) (92.6%) (92.6%) Chi-Square = 0.01, df = 1 15 15 30 Yes I have stopped using a brand after (7.5%) (7.4%) (7.4%) seeing it in a movie. 201 203 404 Total (100%) (100%) (100%) 25 80 105 No TRIAL (12.4%) (39.4%) (26%) Chi-Square = 38.20*, df = 1 176 123 299 Yes I wanted to try a brand after (87.6%) (60.6%) (74%) seeing it in a movie. 201 203 404 Total (100%) (100%) (100%) *p＜0.05

The result of the chi-square analysis showed that there was a relationship between nationality and consumer searches for products appearing in a movie (chi-square = 4.45*,

df = 1, p＜0.05). Fewer South Korean respondents than the United States’ respondents

(n=121 vs. n=101, respectively) reported that they had looked for a product in the store

after seeing it in a movie. Moreover, the consumer trial of product placed in a movie was

statistically significant result by nationality (chi-square = 38.20*, df = 1, p＜0.05). The

South Korean respondents (n=176) reported having wanted to try a brand after seeing it

in a movie more than the United States’ respondents (n=123) for the TRIAL item (“I

wanted to try a brand after seeing it in a movie.”). However, there was no relationship

between consumer nationality and activity to begin or stop a product appearing in a

movie. Table 4-3 provides detailed data about the relationship between nationality and

consumer product usages.

Table 4-4. Comparisons of the means of overall product usages

South Korea United States Items t df Mean Mean (Std. Deviation) (Std. Deviation)

BEHAVIOR 1.59 1.49 0.82 373.92 Overall product usage behaviors (0.98) (1.31) p＜.05

In order to facilitate a comparison of overall product usage behaviors between

South Korea and the United States, the data were recoded from a categorical variable to a

continuous variable. That is, the four behavior items were recoded with a score in terms

of the answer to items (‘Yes’=1 point, ‘No’=0 point) and a composite behavior score was calculated with a value range between one and four. This new continuous variable including total score of the four items was named BEHAVIOR. An independent samples t-test was conducted using the mean scores of overall product usage for the two countries from the transformed data. Descriptive statistics showed that the mean for the South

Korean consumers’ change in product usage was 1.59 compared to the United States’ at mean= 1.49. As shown in Table 4-4, the independent samples t-test reveals that there

was no statistically significant difference in overall product usage after the exposure of

product placement in a movie between South Korea and the United Sates ( t = 0.82, df =

373.92, p＜0.05).

Research Question 3

The research question 3 explored cross-cultural differences in the relationship of

consumer beliefs about product placement and product usage. First, in order to answer

this research question, a principal components analysis on the beliefs items was

conducted for the two countries in an attempt to find the underlying dimensions in beliefs

about product placement.

Second, a multiple regression was performed to measure the impact of identified

factors on product usage behavior. The ten items about consumer beliefs items were

examined using a principal component analysis with varimax rotation. Four factors were

found for the South Korea group and three factors were found for the United States

group.

As shown in Table 4-5, there were four factors with Eigenvalues of more than 1.00

from the South Korean data. The Eigenvalue was 2.83 for Factor 1, 1.48 for Factor 2,

1.16 for Factor 3, and 1.01 for Factor 4. Moreover, Factors 1, 2, 3 and 4 combined

explained 64.81% of total variance of all ten items. Kaiser-Meyer-Olkin (KMO) measure of Sample Adequacy was 0.71, which was more than the acceptable level of 0.50. That is, 71% of common variance was explained by the factors. Additionally, the result of

Bartlett’s Test of Sphericity indicated there was a significant relationship among items

(Chi-square = 369.18*, df = 45, p＜0.05). Therefore, the ten items were appropriate for a factor analysis based on the result of KMO and Bartlett’s test.

Table 4-5. Factor analysis for the South Korea Items F1 F2 F3 F4 Eigenvalues 2.83 1.48 1.16 1.01 % of variance 20.34 14.81 11.58 10.08 ALTER Product placements in movies are a good alternative to 0.70 0.36 - 0.11 - 0.01 traditional commercials. ETHICS The idea of placing products in movies is not ethical because the 0.68 0.18 0.23 0.12 moviegoer doesn’t want to watch paid advertising. ETHPRO Brand tobacco, beer and liquor products should only be used in - 0.01 - 0.06 0.81 0.03 R-rated movies as kids don’t watch such movies. ETHCIGA Cigarette product placements in movies should be banned 0.16 0.05 0.82 - 0.06 completely since cigarette ads are banned on TV. TICKET Product placements in movies are a good idea for keeping down 0.54 - 0.16 - 0.29 - 0.01 the price of admission tickets. BANNED 0.81 0.11 0.17 0.07 In my opinion, product placement in movies should be banned. BELIEVE Real products should be used extensively in movies to make a 0.66 0.11 0.10 - 0.11 scene more believable. PAYMOR Product placements in movies can keep the price of movie 0.02 0.01 - 0.02 0.99 tickets low, but I’d pay more to see a movie without them. FEEL The way the product is used in a movie scene can affect my 0.16 0.79 - 0.07 - 0.02 feelings about the products. RECALL When a character that I like uses a product in a movie, I am 0.12 0.84 0.08 0.03 more likely to remember the product. KMO Measure of Sampling Adequacy = 0.71 Bartlett’s Test of Sphenricity Approx. Chi-square = 369.18*, df = 45, *p＜0.05 Total % of variance= 64.81

The items belong to the factors if the factor loading of each item is more than 0.60 for one and less than 0.40 for other. The first factor for the South Korean group, labeled

‘Acceptability’, explained 28.34% of the variance. Four items, which were ALTER,

ETHICS, BANNED and BELIEVE, belonged to the Acceptability factor. All these items in this factor were related to how accepting consumers were product placement. The second factor, named ‘Type Impact’, accounted for 14.81% of the variance. The ‘Type

Impact’ factor contained two items (FEEL and RECALL) associated with the impact of

product placement in terms of how the products are displayed or used in the movie. The

third factor, Ethical Product, consisted of two items (ETHPRO and ETHCIGA). This

factor was defined by consumers’ opinion about the placement of ethically charged

products. The Ethical Product factor explained 11.58% of the variance. The fourth

factor, labeled ‘Pay More’, included only one item (“Product placements in movies can

keep the price of movie tickets low, but I’d pay more to see a movie without them.”).

This factor accounted for 10.08% of the variance. One item, TICKET, among the ten

items did not clearly belong to any factor.

In comparison, there were three factors with Eigenvalues of more than 1.00 from

the United States’ data, as shown in Table 4-6. Eigenvalues for Factor 1 through 3 were

2.61, 1.63 and 1.14, respectively. Moreover, the three factors accounted for 53.71% of total variance of all ten items. Kaiser-Meyer-Olkin (KMO) measure of Sample

Adequacy was 0.68, which was more than the acceptable level of 0.50. That is, 68% of common variance was explained by the factors. Additionally, the result of Bartlett’s Test of Sphericity revealed a significant relationship between items (Chi-square = 334.01*, df

= 45, p＜0.05). Therefore, the ten items were appropriate for a factor analysis based on the result of KMO and Bartlett’s test.

Table 4-6 also shows the results of factor loadings for all items based on U.S. respondent data. The items belong to the factors if the factor loading of each item is more than 0.60 for one and less than 0.40 for other. The first factor, named ‘General

Ethics’, contained three items (ALTER, ETHICS and BANNED) relating to the general beliefs about product placement ethics. The percentage of the variance explained for this factor was 26.07. The second factor was labeled ‘Type Impact’ which is the same label

27 as the second factor of South Korea because this factor consisted of the exact same items as the second factor’s items of South Korea (FEEL and RECALL). This factor accounted for 42% of the variance. The third factor, labeled ‘Ethical Product’, explained 11.39% of the variance. The Ethical Product factor was also the same label as the third factor of

South Korea because it included same items, ETHPRO and ETHCIGA, with respect to placement of ethical products. Unlike the South Korean data that includes one item, three items (TICKET, BELIEVE and PAYMOR) did not belong to any factor.

Table 4-6. Factor analysis for the United States Items F1 F2 F3 Eigenvalues 2.61 1.63 1.14 % of variance 26.07 16.26 11.39 ALTER Product placements in movies are a good alternative to - 0.65 0.32 0.13 traditional commercials. ETHICS The idea of placing products in movies is not ethical because 0.75 - 0.09 0.15 the moviegoer doesn’t want to watch paid advertising. ETHPRO Brand tobacco, beer and liquor products should only be used in 0.05 0.00 0.74 R-rated movies as kids don’t watch such movies. ETHCIGA Cigarette product placements in movies should be banned 0.08 0.08 0.81 completely since cigarette ads are banned on TV. TICKET Product placements in movies are a good idea for keeping - 0.43 0.23 0.34 down the price of admission tickets. BANNED 0.79 - 0.03 0.18 In my opinion, product placement in movies should be banned. BELIEVE Real products should be used extensively in movies to make a - 0.49 - 0.29 0.14 scene more believable. PAYMOR Product placements in movies can keep the price of movie 0.56 - 0.10 0.06 tickets low, but I’d pay more to see a movie without them. FEEL The way the product is used in a movie scene can affect my - 0.06 0.82 0.10 feelings about the products. RECALL When a character that I like uses a product in a movie, I am - 0.16 0.80 0.02 more likely to remember the product. KMO Measure of Sampling Adequacy = 0.68 Bartlett’s Test of Sphenricity Approx. Chi-square = 334.01*, df = 45, *p＜0.05 Total % of variance = 53.71

Summarizing results of a factor analysis of the two countries, there were four

factors from South Korea and three factors from the Untied States respectively. The first

factor ‘Acceptability’ of the South Korean data and the first factor ‘General Ethics’ of the

United States’ data are composed of same items except for the BELIEVE item, which

was included only in the first factor of the South Korean data. The second factor ‘Type

Impact’ and the third factor ‘Ethical Product’ of the two countries contained the exact

same items. Meanwhile, the South Korean data found one more item, PAYMOR, as the

fourth factor unlike the United States.

Based on the results of a factor analysis, a multiple regression was run to measure

which factors were related to product usage behavior. The independent variables were

four factors uncovered for South Korea relative to the three factors for the United States,

respectively. The dependent variable by group was the overall product usage behavior

score, BEHAVIOR, transformed from ‘yes or no’ categories to continuous values ranged between one and four to sum up four items of product usage.

Table 4-7. Multiple regression analysis for South Korea Unstandardized Standardized Variables t Coefficients (B) Coefficients (Beta) Constant 1.59 24.18 Acceptability 0.12 0.12 1.77 Type Impact 0.27 0.28 4.12* Ethical Product 0.14 0.14 2.09* Pay More 0.10 0.10 1.45 R = 0.35, R2 = 12%, F = 6.63*, df = (4, 196) Y = 1.59 + 0.12 (Acceptability) + 0.27 (Type Impact) + 0.14 (Ethical Product) + 0.10 (Pay More) *p＜0.05

As shown in Table 4-7, the result of a multiple regression analysis for the South

Korean data revealed that there was a significant correlation between four factors as

independent variables and the product usage behavior as a dependent variable (R= 0.35,

F= 6.63*, df = (4, 196), *p＜0.05 ). Furthermore, 12% of total variance of the dependent

variable, ‘product usage’, was explained by all independent variables (R2= 0.12). There

were statistically significant coefficients at p＜0.05 for the second factor ‘Type Impact’ (t

= 4.12*) and the third factor ‘Ethical Product’ (t = 2.09*). Additionally, the values of the standardized regression coefficient were 0.19 for Acceptability, 0.28 for ‘Type Impact’,

0.14 for ‘Ethical Product’ and 0.10 for Pay More. In other words, ‘Type Impact’ was the most important variable in predicting the dependent variable, ‘product usage behavior’.

‘Ethical Product’ was the second, ‘Acceptability’ was the third and ‘Pay More’ was the fourth important variable.

Table 4-8. Multiple regression analysis for the United Sstates

Unstandardized Standardized Variables t Coefficients (B) Coefficients (Beta)

Constant 1.49 17.08

General Ethics 0.90 0.07 1.06

Type Impact 0.43 0.33 4.93*

Ethical Product 0.07 0.05 0.77

R = 0.34, R2 = 12%, F = 8.67*, df = (3, 199) Y = 1.49 + 0.09 (General Ethics) + 0.43 (Type Impact) + 0.07 (Ethical Product)’

*p＜0.05

Table 4-8 shows the output of multiple regression analysis for the United States.

The result also revealed that there was a significant correlation between the three factors

and the product usage behavior (R= 0.34, F= 8.67*, df = (3, 199), *p＜0.05 ).

Furthermore, 12% of total variance of the dependent variable, ‘product usage’, was

explained by all independent variables (R2= 0.12). The result showing statistically significant coefficients at p＜0.05 was only the second factor ‘Type Impact’ (t = 4.93*).

Additionally, the values of the standardized regression coefficient for all factors were

0.07 for ‘General Ethics’, 0.33 for ‘Type Impact’ and 0.05 for ‘Ethical Product’. This

meant that ‘Type Impact’ was the most important variable in predicting the dependent

variable, ‘product usage behavior’. ‘General Ethics’ was the second and ‘Ethical

Product’ was the third important variable.

CHAPTER 5 DISCUSSION

Summary of Results

This study was designed to provide globalized and practical insights toward product placement to marketers or advertising agencies through conducting a cross- cultural study about belief of product placement and the product usage behavior comparing South Korea with the United States. As previously mentioned, the results of this study found that there were country differences in consumer product placement belief, product usage after the exposure of product placement in movie and the relationship between belief and product usage.

First, the findings in terms of Research Question 1 revealed that there were differences between the two countries in consumer beliefs toward product placement. In detail, the South Korean respondents generally showed more conservative beliefs toward product placement than the United States respondents. This result was predicted by the outcome of previous cross-cultural studies comparing Eastern culture (China and

Singapore) with Western culture (the United States) respectively (Karrh, Frith and

Callison 2001and McKechnie and Zhou 2003). That is, the South Korean respondents had more concern about the general ethical issue of product placement in a movie, were less likely to accept product placement as a good communication or marketing tool, were less supportive of showing ethically charged products in movies, tended to agree to the prospect of paying more money to avoid product placement, and were more supportive of limiting the appearance of real products in movies. On the other hand, the South Korean

31 32

respondents were more likely to remember the product that their favorite character used

in a movie. In other words, although South Koreans generally were less accepting of

product placement than the United States’ consumers, the product recall of South

Koreans were more influenced by their favorite characters using a product in a movie than the United States.

Second, this study also examined behavioral outcome in terms of product usage behavior between the two countries after watching a movie containing product placement as Research Question 2. The result revealed that differences in overall product usage behavior almost did not exist between the two countries’ respondents. However, there were differences in particular usage behaviors in the result of analysis of sub-items composing overall product usages. That is, the United States respondents showed more active product usage behavior after the exposure of product placement in a movie.

Though the United States respondents were less likely to want to try a product appearing in a movie, they were more likely to actually look for a product after it appeared in a movie. On the other hand, South Koreans were more likely to have the potential power to visit a store to search for a product or directly start using a product shown in a movie.

That is, although a lower number of South Koreans reported they looked for a product in a store, they wanted to try a product shown in a movie more than the United States.

However, both countries’ consumers were less likely to change the actual product usage behavior after watching a movie, such as starting or stopping using a product that was placed in a movie.

While this study previously examined the differences in belief about product placement and product usage behavior between two countries respectively, the primary

objective of this study was to identify two countries’ difference in the relationship between product placement belief and consumer product usage (Research Question 3).

The findings indicated that there was a correlation between belief about the way to show a product and product usage behavior after watching a movie containing product

placement in both countries. This result was consistent with the consequence of the

earlier studies (Baker and Crawford 1995; Gould et al. 2000; Karrh et al. 2001; Morton

and Friedman 2002).

In detail, the result revealed that consumer belief about how a product is shown and

who was using a product in a movie was the most important aspect to influence product

usage of both the South Korean and the United States consumers, which was consistent

with the finding of previous studies including the Morton and Friedman’s study dealing

with the relation between product placement belief and product usage in the United

States. Additionally, product usage behaviors of the South Korean respondents were

affected by the belief related to the concern about the appearance of ethically charged

products, such as cigarettes or alcohol, as well, while product usage of the United States

consumers were not primary influenced. On the other hand, the beliefs that contain the

general acceptability of product placement and the effort of avoiding product placement

did not principally influence usage behavior among South Koreans. Moreover, in

addition to concerns about ethical product placement, the belief regarding the general

ethical concern about product placement also did not have the primary impact on usage

behavior among the United States consumers.

Managerial Implications

The findings in terms of differences between the two countries in consumer beliefs

toward product placement suggest that the marketers may improve the brand recall by

managing characters using a product in a movie, especially in South Korea. For example,

even though South Korean consumers have conservative beliefs toward product

placement, their brand recall is influenced by characters using a product in a movie.

Therefore, when the marketers need to increase brand recall, the marketers could accomplish the objective by using product placement in a movie starring the liked characters in South Korea.

The findings in terms of differences between South Korea and the United State in product usage behavior propose that the marketers should make a marketing strategy that connects the two countries’ potential purchase intention, such as the search for a product in a store and the desire for product trial appearing in a movie, with the actual change in product usage such as the start of using a product. For example, even though the United

States consumers have a higher level of the search for a product that appeared in a movie, they do not start using a product after watching a movie. Therefore, the marketers could conduct the sales promotion with the practice of product placement simultaneously. That is, while a movie containing product placement is showing on screen, the sales promotion is conducted for the consumers who visit a store dealing in a product that appeared in a movie. The practice of product placement with the sales promotion encourages the

United States consumers to make an immediate purchase after the search for a product appearing in a movie. Meanwhile, South Korean consumers have a higher level of the desire for the product trial that appeared in a movie, while they do not start the use of a product after watching a movie. Therefore, the marketers could conduct the sales promotion to offer frequent chances to try a product appearing in a movie. The practice

of product placement with this sales promotion encourages South Korean consumers to

increase the product trial and start using a product.

The findings in terms of differences between the two countries in relationship

between product placement belief and product usage behavior propose two managerial

implications. First, the marketers should consider who will use a product in a movie and

how a product will be shown regardless of culture. The marketers may survey the target

audiences in terms of whom they like and whom they do not like before product

placement is practiced. Based on the information of the survey, the marketers could use

product placement in a movie where the liked characters appear.

Second, when they reach the international market, especially South Korea, the

marketers should be aware of the importance of the product categories placed in a movie,

especially ethically charged products such as cigarettes and alcohol. The concern about

the placement of ethically-charged products influences the product usage behavior in

South Korea. Therefore, the marketers should abstain from using prominent placement in

a movie for ethically charged products, when they reach the South Korean market.

Limitations

This research has several limitations in generalizing the results. The first limitation is from the sample selected. The samples of both countries were recruited from advertising classes, which means that the sample possibly could be already familiar with product placement and is not representative of the population. This point can bring bias in generalizing the findings. Future study could use a more representative sample.

Second, the restriction of this study is related to the items that were used to measure the product placement belief. Even though two more items were added into the items of Morton and Friedman’s study, the number of those items is still not enough to

explain consumer beliefs toward product placement. Moreover, those items were to

measure just the basic knowledge and the opinion about product placement. This

limitation linked to the low R2 value in the multiple regression analysis, which is

consistent with the original study. The low R2 value was calculated in the two countries.

Thus, future research should contain the items to bolster the power of reflecting consumer

belief about product placement, such as consumer involvement and attitude toward product placement.

Fourth, confounding effects due to language translation could have influenced the results of the current study. For example, product placement in South Korea is translated with a term including negative meaning such as ‘indirect advertising’. This point may introduce bias that possibly makes the South Koreans respond with negative attitudes toward product placement.

The fifth limitation is about gender bias. The ratio of female respondents was higher than those of male in the samples of the United States, while the ratio of female to

male was similar with each other. The inequality in the ratio of gender between the two

countries’ respondents may weaken the findings of the current study.

Sixth, this study did not utilize the cultural dimension values, such as Hofstede’s

five cultural dimensions and Hall’s high-and low-contextual dimensions, to explain the

findings in terms of differences between the two countries. Future study could use the

Hofstede’s or Hall’s cultural dimensions to build the hypotheses or to analyze the

findings in terms of cultural differences in relationship between product placement

beliefs and product usage behaviors.

Finally, this research is the first exploratory study to cross-culturally examine the relationship between product placement belief and product usage behavior. Thus, future

explanatory studies should extend this research.

APPENDIX A FREQUENCY STATISTICS

Table A-1. Gender South Korea United States Frequency Percent Frequency Percent Male 91 45.3 65 32.0 Female 110 54.7 138 68.0 Total 201 100.0 203 100.0

Table A-2. Age South Korea United States Frequency Percent Frequency Percent 18 19 9.5 3 1.5 19 55 27.4 68 33.5 20 29 14.4 67 33.0 21 23 11.4 47 23.2 22 16 8.0 11 5.4 23 21 10.4 5 2.5 24 18 9.0 1 0.5 25 10 5.0 1 0.5 26 5 2.5 — — 27 2 1.0 — — 28 2 1.0 — — 29 1 0.5 — — Total 201 100.0 203 100.0

Table A-3. Major area of study South Korea United States Frequency Percent Frequency Percent Advertising 74 36.8 6331.0 Mass communications, 16 8.0 39 19.2 PR, and journalism Business 20 10.0 5627.6 Art/science 17 8.5 178.4 Other 73 36.3 2412.3 No answer 1 0.5 3 1.5 Total 201 100.0 203100.0

38 39

Table A-4. Frequency of going to a movie theater in last month South Korea United States Frequency Percent Frequency Percent 0 34 16.9 4321.2 1-2 times 123 61.2 123 60.6 3-4 times 35 17.4 31 15.3 5 or more 8 4.0 6 3.0 No answer 1 0.5 — — Total 201 100.0 203100.0

Table A-5. Frequency of a movie rental in last month South Korea United States Frequency Percent Frequency Percent 0 83 41.3 4321.2 1-2 times 66 32.8 83 40.9 3-4 times 30 14.9 49 24.1 5 or more 22 10.9 28 13.8 Total 201 100.0 203100.0

Table A-6. The spending on recreational activities South Korea United States Frequency Percent Frequency Percent less than 25 52 25.9 20 9.9 $25-50 74 36.8 4723.2 $50-75 25 12.4 5326.1 $75 or more 49 24.4 82 40.4 No answer 1 0.5 1 0.5 Total 201 100.0 203100.0

APPENDIX B QUESTIONNAIRE: ENGLISH VERSION

Survey of Product Placement Practice

Thank you for taking the time to answer the questions on this survey. I am currently conducting a study about opinion toward product placement.

Product placement occurs when brand named products appear in a movie. For example, actual brand named products appear in the background or are used by the actor/actress in the context of the movie. In some instances, the actor/actress may state the brand name in conversations with other actors/actress in the movie.

Your answers will be used for a research only. Please be honest.

Section I: The following questions pertain to your opinion about the practice of product placement in a move. Please indicate the level of agreement with each of the following statements.

1. Product placements in movies are a good alternative to traditional commercials. (m=3.47) Strongly Disagree Neither agree Agree Strongly Disagree somewhat nor disagree somewhat Agree

1 2 3 4 5

2. The idea of placing products in movies is not ethical because the moviegoer doesn’t want to watch paid advertising. (m=3.49) Strongly Disagree Neither agree Agree Strongly Disagree somewhat nor disagree somewhat Agree

1 2 3 4 5

3. Brand tobacco, beer and liquor products should only be used in R-rated movies as kids don’t watch such movies. (m=2.47) Strongly Disagree Neither agree Agree Strongly Disagree somewhat nor disagree somewhat Agree

1 2 3 4 5

40 41

4. Cigarette product placements in movies should be banned completely since cigarette ads are banned on TV. (m=2.87) Strongly Disagree Neither agree Agree Strongly Disagree somewhat nor disagree somewhat Agree

1 2 3 4 5

5. Product placements in movies are a good idea for keeping down the price of admission tickets. (m=3.55) Strongly Disagree Neither agree Agree Strongly Disagree somewhat nor disagree somewhat Agree

1 2 3 4 5

6. In my opinion, product placement in movies should be banned. (m=4.01) Strongly Disagree Neither agree Agree Strongly Disagree somewhat nor disagree somewhat Agree

1 2 3 4 5

7. Real products should be used extensively in movies to make a scene more believable. (m=3.74) Strongly Disagree Neither agree Agree Strongly Disagree somewhat nor disagree somewhat Agree

1 2 3 4 5

8. Product placements in movies can keep the price of movie tickets low, but I’d pay more to see a movie without them. (m=4.12) Strongly Disagree Neither agree Agree Strongly Disagree somewhat nor disagree somewhat Agree

1 2 3 4 5

9. The way the product is used in a movie scene can affect my feelings about the products. (m=3.46) Strongly Disagree Neither agree Agree Strongly Disagree somewhat nor disagree somewhat Agree

1 2 3 4 5

10. When a character that I like uses a product in a movie, I am more likely to remember the product. (m=3.58) Strongly Disagree Neither agree Agree Strongly Disagree somewhat nor disagree somewhat Agree

1 2 3 4 5

Section II: The following questions pertain to your product usage after watching a movie including product placement. Please indicate ‘yes’ or ‘no’ with the following statements.

Yes No 11. I have looked for a product in the store after seeing it in a movie. (n=102) (n=101) Yes No 12. I have started using a brand after seeing it in a movie. (n=63) (n=140) Yes No 13. I have stopped using a brand after seeing it in a movie. (n=15) (n=188) Yes No 14. I wanted to try a brand after seeing it in a movie. (n=123) (n=80)

Section III: The following questions pertain to the frequency of watching movies. Please answer the following statements.

15. How many times did you go to see a movie at a theater in last month? Did not go 1 to 2 times 3 to 4 times 5 times or more

16. How many times did you rent movies in last month? Did not rent 1 to 2 times 3 to 4 times 5 times or more

17. How much money did you spend on recreational activities in last month? Less than $ 25 $25 to $50 $50 to $75 More than $75

Section IV: The following questions are about your general information.

18. What is your gender? ____ Male ____ Female

19. What is your age? ______

20. What is your major? ______

Thank you so much for participating. I sincerely appreciate your honest opinion.

APPENDIX C QUESTIONNAIRE: KOREAN VERSION

간접광고 실행에 관한 설문

설문에 응해주셔서 감사합니다 . 본 설문지는 간접광고에 대한 소비자의 생각과 제품사용 간의 관계를 파악하기위한 연구의 기초자료를 얻기 위해 작성된 것입니다 .

간접광고는 실제 브랜드 또는 제품이 영화나 텔레비전 프로그램에 등장하는 것을 말합니다 . 예를 들면, 실제의 브랜드 또는 제품이 영화나 텔레비전 프로그램의 배경으로 보여지거나 , 등장 배우가 실제의 브랜드 혹은 제품을 사용하거나 대사로 언급하는 경우입니다 .

여러분의 응답은 연구의 목적으로만 사용됩니다. 솔직하게 응답해주시면 감사하겠습니다 .

Section I: 다음은 간접광고에 관한 의견을 묻는 질문입니다. 각 문항에 대한 자신의 동의 정도를 표시해주십시오.

1. 영화에서의 간접광고는 일반광고의 좋은 대안이다. (m=3.40)