Therefore, the macro-environments of the shopping area, in addition to economic factors listed in existing models of outshopping, also include commodity tax rate, currency exchange rate, tariff, and hours spent on cross-border shopping trips (Clark, 1994; Crawford et al. , 1999; Ferris, 2000).
Clark (1994) developed a conceptual model on cross-border shopping. He hypothesized that the cross-border market size was directly related to population density, per capita income, and market area served by the retail center.
The market area measured by travel time is influenced by transfer costs, differential pressure, preference gap, and cultural distance (Clark, 1994).
Conceptually, Clark is extending the macro-analytical models of outshopping to estimate the cross-border market size. However, in addition to the environmental variables such as population, income, and traveling distance of the macro-models, he added consumer preference and price differential in his model. Other publishedwork on cross-border shopping mainly followed the micro-analytical approach of outshopping (Piron, 2002; Sullivan & Kang, 1997; Wang, 2004).
A Proposed Model for Cross-Border Shopping In the current study, we attempt to combine the theoretical perspectives from the macro- and micro-analytical approaches on outshopping as well as on crossborder shopping and develop a new model to analyze the behaviors of crossborder shopping. It incorporates market and consumer characteristics. We contend that the characteristics of the market and of the individual consumer influence cross-border shopping behaviors. We hypothesize that traveling distance and shopping area attributes are the major market characteristics that affect crossborder shopping.
Introduction There are various market models which form the basis of a particular industry. The market models include monopoly, perfect competition, oligopoly and monopolistic competition. There are certain industries in which, certain changes have been brought in the market model. Due to the changes some consequences do take place. The present paper shall analyze the changes in market model in a ...
Socioeconomic characteristics and motivational characteristics are major consumer characteristics that affect cross-border shopping behavior. Government’s policies on boundary management in Clark’s (1994) model can be measured by consumer’s attitude toward traveling distance. Government’s tax and subsidies policies as well as currency exchange rates polices can be reflected in price level of shops in the retail center. Similarly, government’s policies on mandated standards can be reflected in the product or service variety and quality of shops of the retail center.
The factor of income appeared in the macro-models of outshopping and cross-border shopping has been included in the socioeco- Lau et al. / CHINESE CROSS-BORDER SHOPPING 115 © 2005 ICHRIE. All rights reserved. Not for commercial use or unauthorized distribution. Downloaded from http://jht. sagepub. com at Universiteitsbibliotheek on July 7, 2008 nomic characteristics of consumer characteristics of our model. Because the model is designed to analyze consumers’ cross-border shopping behavior, not market size of the retail center, we do not include the size of population in this model.
The interrelationships of these variables are described in Figure 1. Detailed explanations of our model on cross-border shopping are discussed in the following sections. Hypotheses to Be Tested By incorporating the extant literature discussed above, a number of hypotheses were developed to put to the test with data collected from the HongKong residents on their cross-border shopping behavior in the border city, Shenzhen. Physical factor. Traveling distance has been considered to be one of the major factors that affect outshopping in most of the macro-analytical models (Converse, 1949; Huff, 1964; Reilly, 1931).
Traveling costs are particularly important in cross-border shopping. They are part of the transfer costs (Clark, 1994), the costs of getting across a country boundary. The traveling costs include time spent on traveling as well aswaiting in the customs checkpoint. According to Clark (1994), when the transfer costs become large relative to the real price of a product or service, the cross-border market for the product or service will collapse. In other words, if people live further away from a cross-border retail area, they may look for higher compensations.
1. Identify the industry, value chain industry segment The industry is the Australian shopping centre industry. Core activities cover building, developing and managing shopping centres in Australia. 2. Value chain Design S/C Project management Leasing & sales Property Management Refurbishment & redevelopment (Renovation of the shopping centre or optimise the building structure to better ...
Contrarily, people living close to the border may be more motivated to shop across the border. The effectiveness of boundary manage- 116 JOURNAL OF HOSPITALITY & TOURISM RESEARCH Market Characteristics I. Physical Factor Distance II. Shopping Area Attributes Price level Shopping environments Shopping facilities & services Product/service variety Product/service quality Consumer Characteristics I. Socio-economic Characteristics Age Income Gender Occupation II. Motivational Characteristics Power and authority Negotiation/Pleasure of bargaining Social experiences Economic motivation Recreation Entertainment Cross-border Shopping Government Policies* Boundary Management Taxes/ Subsidies Currency Exchange Rates Mandated Standard Figure 1 Cross-Border Shopping: An Analytical Model Note: Adapted from Clark (1994).
© 2005 ICHRIE. All rights reserved. Not for commercial use or unauthorized distribution. Downloaded from http://jht. sagepub. com at Universiteitsbibliotheek on July 7, 2008 ment may add to or reduce the traveling costs.
Because these waiting-time costs will apply to all people crossing the border, if the boundary management is poor it will discourage people living farther away from the border because the total traveling cost is high. Thus, we propose the following hypothesis: Hypothesis 1: People living close to the border are more likely to shop across the border than people living away from the border. Shopping area attributes. The second set of variables to be tested in this crossborder shopping model (Figure 1) is shopping area attributes. Huff (1964) used size of the shopping center to measure the attractiveness of the shopping area.
Robert Packet Urban Anthology Segal 4-5: 15 How is urbanization negatively effecting our society? The answer to this question is not a simple one. This essay will not only break down the problems of urbanization in the United States, but it will also tell you some of the attempts made to fix the problem and give some solutions as to how it could possibly be solved in the future. Also when ...
Other researchers add store attributes, market attributes, price, and competition to their store location choice models (Craig et al. , 1984).
These attributes are important to retailers because shoppers may be attracted to other retail trading areas for the reasons of dissatisfaction with local shopping area attributes or perceptions that they can find better store attributes elsewhere (Reidenbach et al. , 1984).
Therefore, the relative attractiveness or perceived value added of shopping facilities of a shopping area affects shoppers’ cross-border shopping decision.