Developing Market Segmentation for Online Game Industry.doc Development of Marketing Strategy for Korean Online Game Industry Using a Two-Level SOM

Since the early 2000’s, the online games have been recognized as a major profit model within Ecommerce and have been developed into the core of the world cultural industries. However, online game industry has encountered higher competition in global market. To survive successfully in today’s competitive online game markets, they need to determine who the target customers are and what motivates them. However, previous research didn’t focus on identification of critical variables for market segmentation in online game market. Additionally, the traditional clustering methodologies have not provided a unique clustering nor determined the precise number of clusters. The purpose of our research is to identify the critical variables and to develop a new methodology for market segmentation of online game market. Our research tested the model with Korean online game users because Korean online game industry is the frontier of global online game industries. Conclusively, the critical variables are the suitability of feedback, the reality of design, the precision of information and the involvement of virtual community. The analysis of segmentation shows that the primary target audiences are positively influenced by the reality of design and the involvement of virtual community. To attract the primary target audiences, online game companies should develop strategies depending on the effectiveness of the variables and the demographic and behavioral characteristics of target audiences. Keywords; Marketing Segmentation, Marketing Strategy, Structural Equation Model, Self-Organizational Map, Online Game