PERCEIVED RISK: A STUDY OF ITS DETERMINANTS IN THE PURCHASE OF A CAPITAL GOOD.
Item
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Title
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PERCEIVED RISK: A STUDY OF ITS DETERMINANTS IN THE PURCHASE OF A CAPITAL GOOD.
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Identifier
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AAI8119678
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identifier
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8119678
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Creator
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TOPOL, MARTIN THEODORE.
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Contributor
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Prof. Conrad Berenson | Prof. Leon G. Schiffman
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Date
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1981
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Language
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English
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Publisher
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City University of New York.
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Subject
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Business Administration, Marketing
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Abstract
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This dissertation investigated the hypothesis that industrial buyers' perceptions of risk regarding the purchase of a technically complex and financially demanding product will be influenced by four broadly defined factors. These factors are; (1)the characteristics of the purchase problem, (2)the characteristics of the buyer, (3)the characteristics of the buyer's organizational environment, and (4)the characteristics of the vendors of the product. The overall objective of this study was to empirically test whether these four factors could explain differences in the risk perceptions of individual buyers.;The research setting used for this study was the electric utility industry. A particular product, namely a "telephone-based" automatic meter reader was selected for study. This product was selected since it is technically complex and requires a major expenditure on the part of buying firms. More importantly, few buyers have purchasing experience with the product although the product has been available for many years. This latter consideration was believed to be critical to a test of perceived risk, for it has been argued that any examination of one's perceptions after a purchase has been made may actually reflect cognitive dissonance and not perceived risk.;The findings of this research are based upon 189 respondents of 284 firms who were mailed questionnaires after an initial telephone interview. The telephone interview was a critical element to the research program, for it enabled the researcher to identify the individual within each firm responsible for such a purchase decision.;Twenty-two hypotheses were formulated in light of previous research relating to perceived risk in industrial buying. To test these hypotheses two groups were formed. Buyers were classified as either "high" or "low" risk perceivers, depending upon their response to a single item measuring perceived risk. Data analysis revealed, that of all the factors considered, the vendor's characteristics in particular were most critical to buyer's perception of risk. In addition, it was observed that many of the information sources considered by buyers were viewed quite differently. These information sources were grouped and classified as being "subjective" or "objective." It was found that buyer's risk perception is associated with their certainty that the "objective" sources of information identified will provide good information. In addition, it was found that buyer's peceived risk is associated with their product specific self-confidence.;Of a related nature, it was found that of all the factors that were identified in preliminary research as presenting risks to the firm buying such a product, that only the threat of a performance failure is associated with buyer's risk perceptions.;Of the twenty-two hypotheses tested, only six were supported. The fact that many of the hypotheses, which were formulated in light of previous research, were not supported is significant. These results cause this researcher to question whether perceived risk will be of any practical value to industrial marketers.;Curiously, every instance that an association was observed some aspect of "uncertainty" was introduced in the independent variable. Hence, it is believed that the observed associations may be the result of a weakness in the research instrument. That is, that the items used to measure the independent variables (although consistent with previous research) may not have been measuring anything more than some generalized aspect of fear, uncertainty, or risk. Therefore, it may not be possible to investigate perceived risk in the context of industrial marketing, and further research may not be warranted in this area.
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Type
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dissertation
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Source
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PQT Legacy CUNY.xlsx
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degree
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Ph.D.
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Program
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Business
