Cross‐national applicability of a perceived risk‐value model
| DOI | https://doi.org/10.1108/10610420410546952 |
| Pages | 242-256 |
| Published date | 01 June 2004 |
| Date | 01 June 2004 |
| Author | Sanjeev Agarwal,R. Kenneth Teas |
| Subject Matter | Marketing |
Cross-national
applicability of a
perceived risk-value
model
Sanjeev Agarwal and
R. Kenneth Teas
The authors
Sanjeev Agarwal is Professor of Marketing and R. Kenneth
Teas is Distinguished Professor of Business, both at the Iowa
State University, Ames, Iowa, USA.
Keywords
Risk management, Quality, Pricing, Brand image
Abstract
A major theme for studies in international marketing is whether
marketing programs and processes can be generalized across
countries. This study tests the generalizability of a model that
predicts consumers’ perception of value based upon extrinsic
cues – such as brand name, price, retailer reputation, and
country of origin – andtheir perceptionsof quality, sacrifice, and
risk. The study extends the perceived value model specified by
Agarwal and Teas and tested in the USA. The results of this
study, based on an experiment conducted in Sweden, suggest
that while the overall structure of the model is supported across
countries, the relative importance of the extrinsic cues may vary
across countries.
Electronic access
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An executive summary for managers and
executive readers can be found at the end of
this article
Introduction
Recent studies that have examined how consumers
form perceptions of value (see Agarwal and Teas,
2001; Sweeney et al., 1999) have integrated the
literature pertaining to the role of consumers’
perceptions of quality and monetary sacrifice on
perceived value (Dodds et al., 1991; Teas and
Agarwal, 2000; Zeithaml, 1988) and consumers’
perceptions of risk on perceived value (Bearden
and Shimp, 1982). The integrated model
facilitates the examination of the complex
meditating roles of consumers’ perceptions of
quality, sacrifice, and risk in the determination of
perceived value. Given that consumers often rely
on extrinsic cues to assess perceptions of risks
(Bearden and Shimp, 1982) as well as perceptions
of quality and sacrifice (Dodds et al., 1991; Teas
and Agarwal, 2000), it is important to examine the
process by which extrinsic cues impact on
perceived risks, and consequently, perceived value.
According to a perceived value model (see
Figure 1) specified by Agarwal and Teas (2001)
and tested on consumers in the USA for two
products – hand-held business calculators and
wristwatches – perceived quality and perceived
sacrifice mediate the relationships between
extrinsic cues (e.g. price, brand, store name, and
country-of-origin) and perceived risks. Perceived
risks, in turn, mediate the relationships that
perceived quality and perceived sacrifice have with
perceived value. The model is useful to
practitioners because it suggests how marketers
can influence consumers’ perception of risks in
order to increase their perception of value.
Studies involving a test of the generalizability of
such models across countries are valuable to
marketers because they clarify whether or not
marketing strategies pertaining to quality cues can
be generalized across countries. Previous research
(Jain, 1989) suggests that models tested in the USA
are generalizable to countries that are at a similar
stageofeconomicdevelopment. Therefore,the
purpose of this study is to test the generalizability of
the findings of the Agarwal and Teas(2001) study in
Sweden, a country that is equally developed. There
are, nevertheless, some cultural and structural
differences between the USAand Sweden that must
be acknowledged. For instance, the two countries
differ on cultural dimensions proposed by Hofstede
(1997). According to Ronen and Shenkar (1985),
the USA is classified as an Anglo country and
Sweden as a Nordic country. In addition, according
to Dawar and Parker (1994), countries can be
Journal of Product & Brand Management
Volume 13 · Number 4 · 2004 · pp.242-256
qEmerald Group Publishing Limited · ISSN 1061-0421
DOI 10.1108/10610420410546952
242
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