Perceived Risk and the Consumer Buying Process: Internet Airline Reservations

Cunningham, Lawrence F., James H. Gerlach, Michael D. Harper, and Clifford E. Young
International Journal of Service Industry Management Vol. 16 Issue 4, pp. 357-372.

Purpose: This research investigates the premise that the use of Internet airline reservation systems is perceived to be riskier than traditional airline reservation shopping.

Methodology: A survey or 263 respondents investigated perceived risk at various stages of the consumer buying process.

Findings: The results reveal that perceived risk for airline reservation services follows a pattern throughout the consumer buying process. When viewed as a dynamic process, perceived risk for Internet airline services shows more radical changes in risk levels than the traditional service. The analyses indicate that performance, physical, social, and financial risk are related to perceived risk at certain stages of the consumer buying process.

Practical Implications: A major finding of this study is that there is a risk premium for Internet airline reservation services and the risk premium permeates all stages of the consumer buying process. It is further demonstrated that the Internet risk premium does affect usage levels; implying that the Internet risk premium is consequential and warrants the implementation of risk mitigation strategies.

Originality: Unlike previous studies on perceived risk that typically focused on the relationship of perceived risk and information search, this study examines the dynamics of perceived risk throughout the various stages of the consumer buying process.