About AMA

Executive Summary
The U.S. consumer electronics market currently stands at $160 billion, and the portable electronics category accounts for one-third of this market. Termed “anywhere technologies,” high-tech portables (e.g., mobile phones, digital cameras, MP3 players, gaming devices) have arguably become “consumer essentials” in this day and age, with more in line to join the ranks. However, the dilemma soon becomes evident as the sheer number of high-tech products that a modern-day consumer must manage quickly reaches unwieldy levels. To this end, firms have been turning their attention to the “convergence” notion as a seemingly logical product solution. Simply put, a convergence product is a digital-platform product bundle that physically integrates two or more digital-platform technologies onto a common product form (e.g., mobile phone and digital camera into a camera phone). Today, several convergence products already offer consumers a legitimate alternative to dedicated product forms across a wide range of technology categories.

With the increased availability of options, consumers now face another dilemma in their purchase consideration: Which product form should they choose—converged, dedicated, or both? To address this question, the authors explore how consumers react to the notion of convergence versus dedicated product forms at different levels of technological performance. The study’s main finding is that consumers overwhelmingly prefer convergence products over the dedicated counterparts at low levels of technological performance, whereas the pattern is reversed at high levels. The authors argue that when consumers resign themselves to a substandard performance at low technology levels, they look to a secondary product benefit as convenience in their choice decision, which is offered by the convergence product. Although this “jack-of-all-trades” perception evidently benefits convergence at the lower end, the flipside is that the “master-of-none” perception becomes more prevalent—and thus a liability—at the higher end because consumers begin to doubt the convergence product’s ability to deliver a high level of performance. In a follow-up study, the authors explore a strategy for attenuating the convergence product’s master-of-none perception at high technology levels. They find that elaborating on the synergistic qualities among converged functions lessens consumers’ concerns.

From a product-line management standpoint, manufacturers should pursue a tiered product-form strategy of offering convergence varieties at the lower end of the technological trajectory and keep the dedicated products in the trajectory’s more advanced sections. Furthermore, the focus should be placed on elaborating the convenience benefits for the converged products instead of the performance dimensions. Nonetheless, a manufacturer that still wants to pursue a high-performance convergence strategy—companies such as Samsung and LG Electronics are at the forefront of pushing 8-megapixel camera phones in today’s marketplace—should consider (1) designing the product so that the integrated features have some functional synergy with its core feature and (2) highlighting this information in the communication campaign.

Biography
Jin K. Han is Associate Professor of Marketing in the LKC School of Business at Singapore Management University. He is also the Director of Research at Singapore Management University’s Centre for Marketing Excellence. He received his AB in Applied Mathematics/Economics from Brown University and obtained his MPhil and PhD in Marketing from Columbia University. His expertise is in the areas of strategic brand management, marketing strategy, and innovation—topics on which he has published articles in top scholarly marketing and management journals, such as Journal of Marketing, Management Science, Journal of Consumer Research, and Marketing Science, among others. Before joining Singapore Management University, he held positions at the Hong Kong University of Science & Technology, KDI School of Public Policy & Management (Seoul), and the International Security Council (Washington, DC).

Seh Woong Chung is Assistant Professor of Marketing Practice in the LKC School of Business at Singapore Management University. He received BA in Political Science and Diplomacy from Yonsei University and his PhD in Marketing from Toronto University. His area of interest is in consumer information processing and innovation. Before joining Singapore Management University, he held positions at INSEAD (France) and LG Electronics.

Yong Seok Sohn is Professor of Marketing at Kyung Hee University in Korea, where he is also the director of International Management Center. He received his PhD in Marketing from New York University. His current research interest is in the areas of new product and innovation strategies, brand valuation, and social network. His recent publications have appeared in Journal of Interactive Marketing, Korean Journal of Consumer Research, and Korean Journal of Marketing. He has served as a project manager or an advisor in the companies as SK Telecommunications, LG Electronics, and POSCO.

Member Comments (0):

To rate or comment on articles, you must be a logged in AMA member. Click here to join