Academic journal article Asian Social Science

Examining Perceived Risk and Its Influence on Attitudes: A Study on Private Label Consumers in Turkey

Academic journal article Asian Social Science

Examining Perceived Risk and Its Influence on Attitudes: A Study on Private Label Consumers in Turkey

Article excerpt

Abstract

This study aims to examine perceived risk and its impact on consumers' attitudes towards private label brands. In order to achieve this aim, a field research was conducted on private label consumers in Turkey. 413 consumers attended the survey. According to the findings, the dimensions of the perceived risk towards private labels were determined as "financial risk", "physical risk", and "social risk". The perceived risk consisting of these dimensions has a negative influence on the attitudes towards private labels. In addition, negative correlations were found between each risk dimension and attitudes.

Keywords: perceived risk, private labels, consumer attitudes, Turkish consumers

1. Introduction

Private labels are the brands that are created and controlled by retailers (Sayman et al., 2002) and where the retailers have the sole responsibility from development, purchase, and storage to marketing (Dhar & Hoch, 1997). In addition to changing economic and social environmental conditions, diversifying consumer attitudes and behaviors, nationally and internationally increased competition among retailers played a significant role in the development process of such brands. Thus, retailers' brands have started to follow a dynamic structure in order to adapt themselves to ever-developing environmental conditions (Schneider, 2004).

The market share of the private label sector, which has reached 250 billion $ throughout the world, has reached 2.5 billion $ in Turkey. With its manufacturing quality and rate, Turkey has surpassed China, which is the biggest rival of Turkey in this field. Chinese producers can neither produce at desired quality nor deliver orders on time. In the present case, demand in the private label sector has shifted to Turkey (Akyüz, 2012:9).

Consumers' buying behaviors are considerably influenced by the risks perceived by them towards purchased products. Here-mentioned risks are the fear of the failure by the products in question to meet expected physical properties or the avoidance of getting a social reaction after buying the product in question (Dick et al., 1995). Different quality levels of private label products increase the risk perceived towards the product line in question. It is stated that consumers who do not want to take a risk prefer buying more expensive products so as to reduce buying a poor-quality product (Burton et al., 1998). Risks that consumers encounter during purchase may develop negative attitudes towards retailers' private labels. For example, product performance may be deemed insufficient. Product may be disapproved by the social circle of consumer or there may be an uncertainty on product performance in the market. Some consumers believe that private labels are poor-quality and that buying these brands is a loss of money (Dick et al., 1995).

In this regard, in the current study, perceived risk and its impact on consumers' attitudes towards private label brands are examined. In what follows, we begin by explaining perceived risk and its dimensions. We provide a brief literature review on consumers' attitudes towards private labels. We present the methods, measures and the analyses. Finally, we discuss the results in terms of their implications.

2. Theoretical Framework

2.1 Perceived Risk

Perceived risk can be explained as consumers' doubt on the results of their buying decisions. The degree of consumers' risk perception is one of the important factors influencing buying decision (Schiffman & Kanuk, 2010).

The recognized types of perceived risks are as follows (Beneke et al, 2012:5-6; Demir, 2011:268):

1) Financial Risk: The possibility of a monetary loss from a poor purchase choice or losing money by purchasing an inadequate or unfamiliar brand. Financial risk also includes the risk that the product's quality does not match its price or that it is overpriced and available at a cheaper price elsewhere. …

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