A Study On Effect Of Intangibility On Perceived Risk

Two central concepts in marketing are intangibility and perceived risk. Both influence consumer decision-making and marketing strategy. Intangibility, the major characteristic that distinguishes goods from services, impacts on the consumer's ability to judge the quality of the good/service. The more intangible a product is, the more difficult its evaluation will be (Zeithaml 1981). Perceived risk, the uncertainty and consequences of the decision, impacts on the extent of search and information sought (Bauer 1960). In response, marketing strategies include branding (to increase tangibility), guarantees (to reduce risk) and a host of other initiatives have been implemented to influence consumer behavior.The major objective of this article is to investigate the impact of the three intangibility dimensions on five dimensions of perceived risk across different product categories and brands for both goods and services. Hopefully, the paper will make the following contributions to the marketing field. First, the present study extends the understanding of intangibility and perceived risk in three ways:(1) by using multiple dimensions for both intangibility and perceived risk, (2)by direct modeling of intangibility and perceived risk to identify the relationships between the individual dimensions of intangibility and those of perceived risk, and (3) by testing these relationships over goods, services, brands, generic products and purchase situations to increase the generality of the results.