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Consumer innovativeness and perceived risk:

implications for high technology product

Tanawat Hirunyawipada and Audhesh K. Paswan
Department of Marketing and Logistics, College of Business Administration, University of North Texas, Denton, Texas, USA

Purpose To investigate consumer innovativeness (CI) from a hierarchical perspective and examine the simultaneous impacts of hierarchical
perspective of CI and perceived risk on new product adoption.
Design/methodology/approach An extended innovativeness and perceived risk model was developed. A structural equation model was used to
test the hypotheses using empirical data from 746 respondents in a high technology product context.
Findings The results provide support for the hierarchical perspective of CI; domain specific CI mediates the relationship between global CI and new
product adoption. Specifically, cognitive and domain-specific innovativeness enhances the actual adoption of new products; whereas sensory
innovativeness and perceived social and physical risks enhance consumers propensity to acquire novel information about new products. Financial risk,
on the other hand, has a negative impact on the propensity to acquire novel information about new products. Time, performance, psychological, and
network externalities risks show no significant relations with the tendency to acquire novel information about new products.
Research limitations/implications The findings provide an explanation to the less than consistent relationship between consumer innovativeness
and new product adoption. However, a single research context of high tech consumer goods may be a limitation and future studies need to replicate
this hierarchical perspective of CI as a predictor of new product adoption in different research contexts for greater generalizability.
Practical implications The findings of the study provide some guidelines to marketers on how to increase the new product commercialization
success. Marketers should tap into the cognitive and domain-specific innovativeness to enhance the new product adoption. The sensory part of CI and
perceived social and physical risks have implications for the promotion and communication aspects of new product marketing.
Originality/value Provides new insights about consumer innovativeness trait as a useful predictor of new product adoption.

Keywords Risk analysis, Innovation

Paper type Research paper

An executive summary for managers and executive new insight about consumer innovativeness provides a better
readers can be found at the end of this article. understanding about the diffusion of innovation and makes
innovativeness trait useful for marketers in the
Consumer innovativeness[1] has been a major thrust in the commercialization of new products. Finding early adopters
diffusion of innovation studies (Midgley and Dowling, 1978) accelerates the diffusion of innovation, minimizes the chance
and has resulted in a rich literature base. It refers to the of new product failure (Im et al., 2003), and helps firms
tendency to willingly embrace change and try new things enhance the effectiveness of their new product marketing
(Cotte and Wood, 2004) and buy new products more often efforts such as segmentation, targeting, positioning, and the
and more quickly than others (Roehrich, 2004). Although, four Ps (Garber et al., 2004; Kumar and Krishnan, 2002). In
consumer innovativeness has been purported to differentiate addition to the hierarchical perspective of CI, this study also
early adopters from general consumers (Manning et al., 1995; investigates the simultaneous role played by consumer
Steenkamp et al., 1999), several studies have indicated that perception of risk on new product adoption.
innovativeness as a discriminator of early adopters from late Most of the consumer innovativeness studies employ a single
adopters is not entirely consistent (e.g. Robertson et al., 1984; trait approach (see Table I), which has been criticized as weak
Steenkamp and Baumgartner, 1992). and inconclusive (Kassarjian, 1971). Because personality is
These disparate findings undermine CIs predictability of depicted in terms of a particular combination of traits, single
innovation adoption and its usefulness in marketing activities. measures of personality traits as predictors of behavior are
This study aims to bring some clarity to this inconsistent perhaps unreliable (Lastovicka and Joachimsthaler, 1988). For
relationship between CI by bringing in a hierarchical a trait approach to be useful to marketers (e.g. psychographic
perspective of consumer innovativeness. We hope that this segmentation for new product launch), the multilevel model of
personality traits shows promise in providing firms to
The current issue and full text archive of this journal is available at understand how different aspects of personality traits impact behavior (Mowen and Minor, 2001). We follow this perspective
by looking into different aspects of innovativeness,
reconstructing its hierarchical relations, and investigating
Journal of Consumer Marketing their impacts on new product adoption.
23/4 (2006) 182 198
q Emerald Group Publishing Limited [ISSN 0736-3761]
While extant innovativeness studies focus on arousal and
[DOI 10.1108/07363760610674310] novelty seeking as the underlying reasons for consumers to

Consumer innovativeness and perceived risk Journal of Consumer Marketing
Tanawat Hirunyawipada and Audhesh K. Paswan Volume 23 Number 4 2006 182 198

Table I Review of empirical studies on consumer innovativeness and adoption

Author(s)/year Findings Context
Chau and Hui (1998) Consumer novelty seeking can identify early from late adopters Computer software
Citrin et al. (2000) Domain-specific innovativeness and internet usage influence consumers Online shopping
adoption of online shopping
Foxall (1988) No significant relation between global innovativeness and adoption Food product
Foxall (1994) Global innovativeness fails to account for the evidence on which the notion of Food product
an innovation-prone personality is based
Foxall (1995) Involvement in product category moderates the global innovativeness-new Food products and computer software
product adoption relationship
Foxall and Bhate (1991) Global innovativeness is found to be significantly related to frequency of use Personal computer
Foxall and Bhate (1993) Global innovativeness correlates weakly with purchase and consumption Food product
Foxall and Bhate (1999) Product category interest and situation facilitation/inhabitation does not Computer software
mediate the relationship between global innovativeness and adoption
Foxall and Haskins (1986) Global innovativeness has high validity in the prediction of adoption behavior Food product
Goldsmith (2002) Domain-specific innovativeness mediates the relationship between global Online shopping
innovativeness and online buying
Goldsmith and Flynn (1992) Domain-specific innovativeness identifies consumers with higher number of Fashion
shopping trip and greater spending from those who have less
Goldsmith et al. (1995) Domain-specific innovativeness is more highly correlated with number of new Clothing and electronics products
products adopted than global innovativeness
Goldsmith et al. (1998) Domain-specific innovativeness positively correlated with consumers Wine
knowledge about product and product involvement
Goldsmith et al. (2003) Domain-specific innovativeness is a stronger predictor of behavioral criteria NA
(time and money spent at shopping) than the market maven scale
Im et al. (2003) Personal characteristics (age and income) are stronger predictors of new Consumer electronics products
product adoption than global innovativeness
Lassar et al. (2005) Global innovativeness is negatively related to online banking adoption Online banking
Limayem et al. (2000) Consumer attitude and intention mediate the relationship between consumer Online shopping
innovativeness and internet shopping behavior
Manning et al. (1995) Inherent consumer novelty seeking correlates to actualized novelty seeking Food product, electronics product, etc.
and awareness (initial stages in adoption process), whereas consumer
independent judgment making is related to the trials of new products (later
stage in adoption process)
Midgley and Dowling (1993) Interest in particular product category and social communication networks Clothing
mediate the relationship between global innovativeness and adoption
Mowen et al. (1998) Global innovativeness mediates the relationship between personal traits and Electronic and food products
domain-specific innovativeness
Ostlund (1972) Global innovativeness extends across test product categories Plastic bandage, disposable female
undergarment, dessert mix, napkin, shampoo,
and fabric treatment solution
Summers (1971) Adoption may be a function of situational variables and behavioral Food, clothing, household cleansers and
considerations detergents, cosmetics and personal grooming
aids, and appliances
Venkatraman (1991) Global innovativeness dominates innovation types in determining the Personal computer and VCR
importance of innovation characteristics in adoption
Venkatraman and Price Cognitive and sensory innovators differ in their proneness toward innovations Personal computer, food processor, and VCR
Wood and Swait (2002) Global innovativeness (need for cognitive and change) predict pattern of Cellular phone
change behavior in adoption

seek novel products (Chau and Hui, 1998; Menon and Kahn, dominant paradigm ignores the other considerable aspects of
1995), new products also encompass uncertainties or risk the consumer innovativeness (Gatignon and Robertson,
which enhances the resistance to adoption (Ram and Sheth, 1991). In response to this, we integrate two different
1989). Unfortunately most innovativeness literature has been perspectives of the diffusion of innovation; that is, while
dominated by a novelty-seeking paradigm; whereas the consumer innovativeness traits drive consumers to adopt new
resistance to innovation approach has gained less attention products, product newness encompasses perceived risks a
(Sheth, 1981; Szmigin and Foxall, 1998). Adopting a single potential detriment to innovation adoption (Conchar et al.,

Consumer innovativeness and perceived risk Journal of Consumer Marketing
Tanawat Hirunyawipada and Audhesh K. Paswan Volume 23 Number 4 2006 182 198

2004; Dowling and Staelin, 1994). Integrating the two Global innovativeness
perspectives, hopefully, will provide a more comprehensive The general assumptions of global innovativeness are
picture of antecedents to new product adoption. Articulating anchored in personality inventory that determines behavior,
adoption-decision process in this context also provides specifically the adoption of new products (Leavitt and Walton,
practical implications for marketers in the introduction of 1975; Ostlund, 1972). Because global innovativeness is a
innovations. personality trait at the highest level of abstraction, it is
We select consumer electronic products as a research independent of the context or domain in which consumers are
context. These products are seen as high technology and located (Midgley and Dowling, 1978). It is the very nature of
innovative goods (Gatignon and Robertson, 1991; Rogers, their innovativeness trait, rather than other intervening
1983) and hence provide an appropriate platform for the variables (e.g. situational effects, communicated experience
study, i.e. the relationship between consumer innovativeness, of others), that engenders consumers to adopt new products
perceived risk, and new product adoption. We review the (Midgley and Dowling, 1993). Adopting this perspective of
innovativeness as a latent trait, several studies have identified
literature from each perspective (consumer innovativeness
multiple aspects of global innovativeness, including openness
and perceived risk) in the next section. It is followed by the
to information processing (Leavitt and Walton, 1975),
hypotheses development, methods, and results sections.
willingness to change (Hurt et al., 1977), inherent novelty
Finally, we provide a discussion of the results, its
seeking (Hirschman, 1980; Manning et al., 1995), optimum
implications, limitations, and suggestion for future research. stimulation level (Raju, 1980; Steenkamp and Baumgartner,
1992), and variety seeking (Lattin and McAlister, 1985;
Menon and Kahn, 1995). All of these global innovativeness
The hierarchy of consumer innovativeness components together lead to the tendency to acquire novel
information and/or adopt new products.
Extant literature broadly defines consumer innovativeness as
Although many researchers have theorized global
the desire to seek out arousal and novelty from new products
innovativeness trait as a single construct, others suggest it to
(Hirschman, 1980; Midgley and Dowling, 1978). Most
be multidimensional, including sensory and cognitive traits
innovativeness studies have leaned toward the exploration of (Pearson, 1970; Wood and Swait, 2002). Cognitive trait
commonality among early adopters that can produce equifinal engenders consumers to seek stimulation to arouse the mind,
adoption results (Gatignon and Robertson, 1991). Consumer engage in and enjoy new experiences that stimulate their
innovativeness is also investigated as a precursor to the thinking and puzzle solving capabilities (Venkatraman and
adoption of new products (Chau and Hui, 1998). Others have Price, 1990). In contrast, sensory trait leads consumers to
endeavored to identify innovativeness as a personality seek stimulation that arouses the sense, engage in and enjoy
construct to identify new product adopters (e.g. Mowen internally generated experiences, and favor fantasy thinking
et al., 1998; Steenkamp et al., 1999). However, it appears that and activities (Pearson, 1970). These dimensions of
the innovativeness construct has not always been a consistent innovativeness trait underlie the disparate lists of activities
predictor of innovation behavior (Roehrich, 2004). In fact, and provide consumers with means of regulating their
some empirical studies (Goldsmith et al., 2003; Im et al., exposure to sensory and cognitive stimulation (Baumgartner
2003) have even reported weak relationships (Table I). and Steenkamp, 1996). We adopt this bi-dimensional
This study approaches consumer innovativeness from a trait perspective of global innovativeness, i.e. cognitive and
perspective. A personal trait is any characteristic by which a sensory innovativeness in this study.
person differs from another in a relatively permanent and
consistent way (Hilgard et al., 1975). Trait theories describe Domain-specific innovativeness
people in terms of their predispositions as measured by a Domain-specific innovativeness aims to explicate the narrow
series of adjectives or short phrases (Mowen and Minor, facets of human behavior within a persons specific interest
2001). Since one persons personality toward specific buying domain (Midgley and Dowling, 1993)[2]. It captures the
behavior is portrayed in terms of a particular combination of individuals predisposition toward the product class, and
traits, the measured personality characteristics must have refers to the tendency to acquire new products or related
direct relevance to the behavior as well as exhaust the trait at information within a specific domain (Goldsmith and
all different levels to increase its reliability and validity, and to Hofacker, 1991). This tendency is perhaps a consequence
of the interaction between global innovativeness and strong
be useful to marketers (Mowen, 1999). Our literature review
interest in product category (Midgley and Dowling, 1978;
suggests that only a few empirical innovativeness studies have
Roehrich et al., 2002). The salience of domain-specific
attempted to follow this multilevel, related trait approach
innovativeness has been witnessed in different contexts, e.g.
(Table I). We believe that the disparate finding of the product categories, industries, countries (Roehrich, 2004).
innovativeness-adoption relationship can be clarified by Robertson (1971) asserts that consumer innovativeness is
adopting the perspective that relevant innovativeness traits consistently found within product categories and occasionally
be categorized into different levels of abstraction and together between related product classes. We take the stance that
these predict new product adoption in a more consistent domain-specific innovativeness plays an important role in the
manner (Midgley and Dowling, 1978; Mowen, 1999). As innovativeness hierarchy by providing additional predictive
such, we disintegrate consumer innovativeness into three power.
different levels of abstraction global (personal trait)
innovativeness, domain-specific (narrowly defined trait Actualized innovativeness
toward products category) innovativeness, and innovative Actualized innovativeness is the extent to which consumers
behavior. are relatively early in adopting new products than other

Consumer innovativeness and perceived risk Journal of Consumer Marketing
Tanawat Hirunyawipada and Audhesh K. Paswan Volume 23 Number 4 2006 182 198

members of their societies (Rogers, 2003). The time of them pleasure without too much thinking or deliberation
adoption behavior is a major criterion that distinguishes early (Zuckerman, 1979), and prefer visual and verbal stimuli to
adopters from late adopters (Midgley and Dowling, 1978). In process information (Venkatraman, 1991). All of these
addition, actualized innovativeness has also been posited to engender the tendency to acquire novel information, but
include behavior that deals with the acquisition of information less likely to bear cognitive tasks associated with new product
associated with new products (Hirschman, 1980). The adoption and usage. Because the desire for novel information
acquisition of novel information may be achieved through does not necessarily include a willingness to buy new products
sources such as product catalogs, reviews of new products, (Mudd, 1990; Steenkamp and Baumgartner, 1992), sensory
product trial etc. Following Hirschmans (1980) suggestion, innovators are less likely to obtain novel information by
we disintegrate actualized innovativeness into the actual actually adopting the new product, which requires more
adoption of new products (ADOPT) and the acquisition of intensive cognitive processing. For them, the acquisition of
novel information associated with new products (AQNIP). information is an end in itself. Sensory innovators can acquire
Relying on the extant literature, we define AQNIP as the novel information about new products through
extent to which consumers acquire (or seeks) new products advertisements, product news, product demonstration,
novel information with or without actual adoption. product trials etc. without obligating themselves with actual
purchase. Thus, we hypothesize that:
The relationship between different aspects of H2a. Sensory innovativeness will be positively associated
innovativeness with AQNIP.
Based on the discussion so far, we disintegrate global H2b. Sensory innovativeness will not be associated with
innovativeness into cognitive and sensory dimensions, while ADOPT.
actualized innovativeness is decomposed into ADOPT and
AQNIP. We next construct a hierarchical model capturing the
relationship between various dimensions of consumer Domain-specific innovativeness and actualized innovativeness
innovativeness and different aspects of new product The domain-specific innovativeness perspective suggests that
adoption (Figure 1) and discuss various relationships of this consumer innovativeness becomes more salient within a
model. specific product domain and hence enhances the predictive
Global innovativeness and actualized innovativeness power of global innovativeness (e.g. Buss, 1989; Gatignon
Cognitive innovativeness is the propensity to like cognitive and Robertson, 1985). In the innovativeness hierarchy, global
schemes and processes that focuses on the explanations, facts, innovativeness is conceptualized at the broadest level, whereas
how things work, and learning to do new things (Pearson, the domain-specific innovativeness is more narrowly defined
1970). Cognitive innovators enjoy thinking and mental and hence is likely to better predict particular behavior both
exertion, seeing how things are put together and why they the actual adoption of innovative product and the propensity
come out the way they do, and learning about cause and effect to acquire information associating with new products. Hence,
(Hirschman, 1984). Consumers with high cognitive we hypothesize that:
innovativeness enjoy evaluating information, finding out H3a. Domain-specific innovativeness will be positively
how the products work, discovering facts about the associated with ADOPT.
products, and learning how to use them. While the H3b. Domain-specific innovativeness will be positively
acquisition of the information about new products through associated with AQNIP.
various media and product demonstration may reveal their In addition to the direct relationships between domain-specific
novelty to consumers, it is not a substitute for actual innovativeness and adoption behavior (both ADOPT and
experience. Cognitive innovators tend to feel more AQNIP), extant literature also suggests that domain-specific
comfortable with the actual adoption and usage that allows innovativeness may mediate the relationship between global and
them to play with the new product, learn from it, and exercise actualized innovativeness (Goldsmith et al., 1995; Midgley and
their cognitive ability (Venkatraman, 1991). The actual Dowling, 1978). A personal trait in higher level of abstraction
adoption and usage provides cognitive innovators the (e.g. global innovativeness) may have significant impact on the
opportunities and time to learn, analyze, and try the relevant trait at less abstraction level (e.g. domain-specific
newness of the products. Mere acquisition of information innovativeness) (Mowen, 1999). However, it is less likely that
about new products does not seem to hold the same promise both cognitive and sensory dimensions of global innovativeness
for cognitive innovators. Hence, we propose that: equally relate to the domain-specific innovativeness. Domain-
H1a. Cognitive innovativeness will be positively associated specific innovativeness is the narrowly defined trait
with ADOPT. encompassing strong intention to get involved in particular
H1b. Cognitive innovativeness will not be associated with product categories through the actual adoption (Midgley and
AQNIP. Dowling, 1993). It is more about product usages rather than
Sensory innovativeness, on the other hand, is the propensity searching for novel information to stimulate sensory trait. Thus,
to seek fantasy and arousal through external stimuli (Pearson, cognitive innovativeness is more likely to be associated with
1970). It focuses on consumers propensity to seek domain-specific innovativeness, rather than sensory innovative
stimulating information such as novel information trait. Thus we propose that domain specific innovativeness will
associated with new products (Raju, 1980). Sensory mediate the relationship between cognitive trait dimension of
innovators are less likely to organize, elaborate, and evaluate the global innovativeness and dimensions of actualized
the novel information to which they are exposed because they innovation ADOPT and AQNIP, and not between sensory
tend to be low on the need for cognition (Venkatraman and dimension of global innovativeness and the two dimensions of
Price, 1990). They enjoy novelty, tend to do things that give actualized innovation.

Consumer innovativeness and perceived risk Journal of Consumer Marketing
Tanawat Hirunyawipada and Audhesh K. Paswan Volume 23 Number 4 2006 182 198

Figure 1 Hierarchical model (path coefficients)

Consumer innovativeness and perceived risk Journal of Consumer Marketing
Tanawat Hirunyawipada and Audhesh K. Paswan Volume 23 Number 4 2006 182 198

H4. Domain-specific innovativeness will mediate the perceived risk may aid the tendency to acquire product related
relationship between cognitive innovativeness and novel information (AQNIP) and may not have any significant
ADOPT; and between cognitive innovativeness and influence on the adoption of the actual products.
AQNIP. A multi-dimensional construct, perceived risk reflects a
persons perception of the risk inherent in purchasing
products in a specific product category (Bettman, 1973;
DelVecchio and Smith, 2005; Dowling and Staelin, 1994).
Innovativeness and perceived risk Researchers have identified six key dimensions of perceived
Innovativeness literature shows that global and domain- risk i.e. financial, performance, physical, time, social, and
specific innovativeness differs in their influence on actualized psychological risks (e.g. Cherry and Fraedrich, 2002;
innovativeness, i.e. it is not obvious whether a yes at one level Dholakia, 2001). Jacoby and Kaplan (1972) provide the
would be equivalent to a yes at the other one (Roehrich, following definitions of the perceived risk dimensions.
2004, p. 675). The discrepancy in consumer innovativeness Financial risk captures the financially negative outcomes for
ability to predict the adoption implies that consumer consumers after they adopt products. Performance risk is
innovativeness perspective is not a sole theoretical concerns that products will not perform as anticipated.
explanation of new product adoption and that other Physical risk is the perception that products will be harmful to
intervening variables may confound this relationship adopters. Time risk relates to the perception that the adoption
(Midgley and Dowling, 1993; Roehrich et al., 2002). and the use of the product will take too much time (see also
A resistance to innovation adoption perspective holds that Roselius, 1971). Social risk has to do with the negative
novel attributes of new products embodying features (e.g. responses from consumers social network. Dholakia (2001)
technological complexity, high price, newness) with defines psychological risk as the nervousness arising from the
unexpected side effects can create disruption in consumers anticipated post-purchase emotions such as frustration,
established routine (e.g. Ram and Sheth, 1989; Sheth, 1981; disappointment, worry, and regret.
Waddell and Cowan, 2003). This may conflict with prior Since this study focuses on the high-tech product domain
beliefs of consumers and result in resistance to adoption (consumer electronic products) we introduce an important
(Folkes, 1988; Locander and Hermann, 1979). When and unique dimension of domain-specific risk i.e. the
consumers venture into the adoption of new products, they perceived risk associated with network externalities. Network
face a dilemma between desirable and undesirable externalities occur when consumers utilities from adoption of
consequences of the adoption and hence face a risky innovation depend on previous adoption or the adoption by
decision (Mitchell et al., 1999; Zinkhan and Karande, relevant others, and estimated current and future product
1991). Perceived risk, therefore, is a function of the penetrations (Conner, 1995; Katz and Shapiro, 1985; Shapiro
unexpected results of adoption and an outcome that and Varian, 1999). For example, some consumers purchase
deviates from expectation (Forsythe and Shi, 2003; Weber Windows operating system because they believe many people
and Hsee, 1998). Although several studies (see Conchar et al., buy and use it. High penetration of Windows among users
2004) have suggested that perceived risk may negatively enables consumers to share content and files over the
influence the decision to adopt new products, others argue operating system, and enhance their expectation of more
that this negative effect is not so obvious (e.g. Mitchell and computer applications compatible with future versions of
Harris, 2005; DelVecchio and Smith, 2005). Since actual Windows. Failing to comply with these conditions, the
adoption is a function of consumer innovativeness (global and products can engender the perceived risk associated with
domain-specific), the perception of risk may not have much to network externalities.
do with actual adoption. However, it may lead to consumers
seeking more information to ascertain the level of risk, Dimensions of perceived risk and AQNIP
mitigate the perception of risk, or manage the perceived risk While the perceived risk is posited to be multidimensional in
(Manning et al., 1995). nature, not all the dimensions are going to be salient in all
product purchase contexts. It appears that only a few of these
Perceived risk and AQNIP dimensions are salient in driving consumers perceived overall
Literature suggests that perceived risk enhances exploratory risk in one product context (Campbell and Goodstein, 2001).
or information search tendencies (Batra and Sinha, 2000; In other words, all dimensions of perceived risk (financial,
Campbell and Goodstein, 2001). This is because consumers performance, physical, time, social, psychological, and
seek out information to ensure whether the uncertain network externalities risks) are not likely to influence the
consequence of new product adoption is at their acceptable consumer tendency towards AQNIP in a uniform manner.
levels (Dholakia, 2001; Dowling and Staelin, 1994). This is because the presence of sensory and/or domain-
Additionally, both global and domain-specific specific innovativeness along with perceived risk may amplify
innovativeness, and perceived risk may simultaneously (or reduce) the impact of a particular risk dimensions on
impact the adoption in the sense that perceived risk do not AQNIP. For consumer electronics, social risk (i.e. the
completely inhibit innovators to adopt new products. undesired response to new product purchase) may be very
Consumers may also seek out novel information about the salient because a lot of high tech consumer electronics are
new products, especially its newness (including technological used in public domain, with friends and colleagues, and
complexity, unfamiliar attributes, etc.), to ensure that the having the right gadget with the right brand name may be
perceived risk associated with the adoption is at their crucial for a lot of consumers. Hence, consumers may put in
acceptable level. Finally, the acquisition of stimulating extra effort in finding and/or acquiring information about the
information may also cater to their sensory innovativeness innovative products. As for time risk (i.e. fear that the
trait as well as their domain-specific innovativeness. As such, adoption and use will take a long time and may be wasted),

Consumer innovativeness and perceived risk Journal of Consumer Marketing
Tanawat Hirunyawipada and Audhesh K. Paswan Volume 23 Number 4 2006 182 198

prima facie, one could argue that consumers would spend a As such, psychological risks may not be very salient in this
lot of time learning the details about high tech products. market and are unlikely to impact AQNIP. Finally, the
However, given the level of user friendliness in todays high network externality risk deals with consumers assessment of
tech gadgets, one could argue that most of the high tech the extent to which others in the network also possess the
consumer products have become plug and play systems. Thus technology. Given the newness of the product, it is possible
for a lot of consumers perceived time risk may not be very that consumers may not be able to have that assurance. In
salient, and may not have any significant impact on fact, more novel products may actually be associated with
acquisition of information (AQNIP). innovators. In addition, there is also a possibility that
H5. Social risk will be positively associated with AQNIP. consumers in this market may be looking for only I have
H6. Time risk will not be associated with AQNIP. it feeling and hence may be dogged by what if I am the only
clown to buy this anxiety. Thus, while on the one hand
Financial risk arises from the concerns of negative financial
consumers might want the novel product to be not owned by
outcomes associated with new product adoption and deals
every one, and on the other hand might want the reassurance
with utilities that consumers gain at a price they would have to
of having some of the consumers, especially the innovators,
pay. When consumers feel that the monetary cost of adoption
own it so that when something goes wrong they can seek help
is not worth their investment, the motivation to search for
and information. Thus, network externality risk is likely to
further information is diminished. To consumers, perhaps it is
lead consumers to seek more information about the product
not important to obtain new product details if the decision to and the extent of its market penetration.
reject the adoption is made a priori based on their assessment H10. Psychological risk will not be associated with AQNIP.
of financial risk. If the losses from the adoption become H11. Network externality risk will be positively associated
critical, consumers are less likely to engage in search for with AQNIP.
information about new products to reduce risk (Conchar et al.,
2004). As such, a high perceived financial risk might dissuade
consumers from acquiring any further information about new
products. Research method
H7. Financial risk will be negatively associated with
AQNIP. Research setting, sample, and procedure
To test our hypothesized model capturing the relationships
Physical risk is associated with new products (technology) among global (cognitive and sensory) and domain-specific
attributes that consumers have never been exposed to and that innovativeness, perceived risk, and actual behavior (ADOPT
does not tap into any of the existing knowledge in their and AQNIP), we selected consumer electronic products,
memory (Dholakia, 2001). New technology often comes with which most perceive to be high technology and innovative
a fair amount of press coverage regarding their side effects, (Gatignon and Robertson, 1991; Rogers, 2003) as our
e.g. cell phone and radiation related problems, side effect of research context. The respondents were students from a
working with notebook computer on ones lap. We speculate university in southwestern USA who participated in the
that physical risk is likely to make consumers more worried survey for extra credits. Selecting student respondents ensures
about their physical well-being and enhance their desire to a highly homogeneous respondent set and thus likely
seek and acquire more information about the new products. accomplishes the ideal theory falsification procedure (Calder
H8. Physical risk will be positively associated with AQNIP. et al., 1981, 1982)[3]. Several studies in the field of marketing
Consumers evaluation of performance risk is based on their have used student samples for theory testing (for example see
knowledge and cognitive abilities in a certain product domain Boulding et al., 1992, 1993). Moreover, to increase the
(Ram and Sheth, 1989). However, these concerns might be correspondence between context and respondents, we first
mitigated by consumers expertise and interest in the high asked 63 students to list ten consumer electronic products
tech product domain (Mitchell and Harris, 2005; Mowen and that comply with three criteria: first, the subjects are able to
Minor, 2001). Domain-specific innovators may already adopt the products (in terms of purchasing ability); second,
possess high levels of knowledge about new products they perceived the products to be high technology; and third,
pertaining to their interest categories. In addition, the the products comply with the criteria of being innovative, e.g.
performance aspect of consumer electronic commonly relative advantage, compatibility, complexity, trialability, and
observability (Rogers, 2003). We also asked them to provide a
available at various stores is almost taken for granted in
list of three non-innovative products. For administrative
todays day and age of plug and play products and adequate
convenience and survey effectiveness, we selected five
warranties. These arguments along with the fact that most
products of which four are high-tech products with the
consumers electronic products seem to be only marginally
highest frequencies (e.g., DVD burner, portable MP3 and
better than their predecessor (i.e. no great leap of technology
CD players, MP3 and CD player, cell phones wireless
see Mohr, 2001) results in insignificant relationship
headset system). We also included the highest frequency from
between perceived performance risk dimension and AQNIP.
non-innovative product category (i.e. VCR) to assess a
H9. Performance risk will not be associated with AQNIP.
manipulation check.
As for the psychological risk, it may be counterbalanced by In the second stage, we developed a multi-item
the effects of sensory innovativeness trait and the domain- questionnaire and tested it on 67 students. After a few
specific interest. A deluge of information about latest minor adjustments, the final questionnaires were administered
products in the consumer electronic market, a certain to 780 students. Of the total returned questionnaires 34
assurance about the performance and the user-friendly responses were found incomplete, resulting in 746 final usable
attributes of products in this market, are likely to put questionnaires. No significant difference was found between
consumers relatively at ease in terms of psychological anxiety. early and late respondents as well as between usable and

Consumer innovativeness and perceived risk Journal of Consumer Marketing
Tanawat Hirunyawipada and Audhesh K. Paswan Volume 23 Number 4 2006 182 198

incomplete questionnaires[4]. The final usable sample been extensively verified across various product categories and
distribution is as follows male 47 per cent and female countries (see Roehrich, 2004). Perceived risk (financial,
53 per cent; 64 per cent of the group are between 21 to 30 performance, physical, time, psychological, and social risks)
years old; 74 per cent of the respondents have an annual were measured through Stone and Grnhaugs (1993) and
income of less than $60,000; and 79 per cent of the Dholakias (2001) scales. Perceived network externalities risk
respondents live in urban or suburban areas. scale (Table III) was adapted from Pae and Hyuns (2002)
Measures We quantified ADOPT by asking the subjects to provide the
AQNIP is defined as the extent to which consumers acquire number of products they owned in the selected (discussed
novel information associated with new high-tech products and earlier) set of high-tech products. This method reflects the
avoid the adoption of the new products (Hirschman, 1980). actual adoption behavior and has high reliability (Lastovicka
We followed the scale development procedure recommended and Joachimsthaler, 1988). Additionally, this approach for
by Baumgartner and Steenkamp (1996) and Gerbing and developing the adoption scale is the procedural remedy for the
Anderson (1988). We drew the initial 15 measurement items common method bias when researchers use the data from the
from the extensive review of consumer innovativeness same source of respondents (Podsakoff et al., 2003).
literature. We next asked two marketing professors and Table IV presents the correlations between composite
seven marketing doctoral students to verify the face validity of scores for each of the constructs and their Alpha scores. The
the questions. We incorporated this expert panels comments lowest Alpha score was 0.77 and all correlations were less than
by revising the scales and administered the questions to 67 the reliability estimates. Together, these indicate acceptable
students in the pilot study. We then refined the scale before levels of reliability and validity discriminant and convergent
administering the survey on the total sample. The refinement (Churchill, 1979; Nunnally, 1978).
process resulted in elimination of five items. The confirmatory
factor analysis on the remaining ten items (see Table II) from Analysis
the survey show significantly high loadings, and thus confirms We included all hypothesized relations in the base model
the convergent validity (Bagozzi and Yi, 1988). This is further (Figure 2) except H4, i.e. we tested the non-hierarchical
confirmed by high internal consistency scores, i.e. perspective of innovativeness in the base model. We next
Cronchbachs Alpha 0:89 (Nunnally, 1978). developed the mediating model to test the mediating effect
For other measures, we selected measures that have been suggested in H4 (by comparing with the base model). Finally,
extensively validated in the literature. Cognitive and sensory we developed and tested the hierarchical model (Figure 1),
innovativeness were borrowed from Venkatraman and Price which represents the hierarchical and multilevel
(1990). Domain-specific innovativeness was operationalized innovativeness perspective and incorporates both
through Goldsmith and Hofackers (1991) scale, which has innovativeness and perceived risk. The hierarchical model
also helped confirm the results from the base model. We next
Table II AQNIP scale development detail the model estimation process and the results.

No. Questions Loading Model estimation

Structural equation modeling method was used to test the
1 I know all novel features about consumer electronic hypothesized relationships (Byrne, 1998; Joreskog and
products but I do not buy them 0.65 Sorbom, 1996)[5]. It is suggested that the measurement
2 I keep myself updated about the new features of model be assessed before the structural model is estimated
consumer electronic products even if I do not buy them 0.76 (Anderson and Gerbing, 1988). As such, we verified the
3 Whenever the new consumer electronic product gets to measures through two steps: the pilot test and the
the market, I am among the first to know 0.80 confirmatory factor analysis. We tested and refined these
4 Compared with other people, I know what is exactly new measurement scales in the pilot study as suggested by
about the consumer electronic product although I do not Churchill (1979). After the refinement, the Cronchbachs
buy it 0.82 alphas of all constructs (0.77 to 0.89, see Table IV) are larger
5 Compared with other people, I know about many new than 0.70, indicating good internal consistency (Nunnally,
consumer electronic products but I do not buy any of
them 0.65 Table III Network externalities risk scale
6 I can say that I am an expert about consumer electronic
products 0.72 No.Questions Loading
7 I am at the forefront among those who know consumer 1 A fact that few people are using consumer electronic
electronic products 0.78 products makes me become concerned about buying
8 Although I do not own a consumer electronic product, I them 0.83
have more accurate product information than people 2 The fewer people use consumer electronic products, the
who buy it 0.74 less utility I will have from these products 0.86
9 I do not buy a consumer electronic product but I know a 3 I would not use consumer electronic products if many
lot about it 0.73 people will not use them in the future 0.86
10 I can figure out the new features of a consumer
electronic product although I do not own it 0.61 Note: X 2:71, SD 0:84, Cronbachs alpha 0:81

Note: X 2:71; SD 0:74, Cronbachs alpha 0:89 Source: Adapted from Pae and Hyuns (2002) network externalities scale

Consumer innovativeness and perceived risk Journal of Consumer Marketing
Tanawat Hirunyawipada and Audhesh K. Paswan Volume 23 Number 4 2006 182 198

Table IV Correlation matrix of major constructs summated scores

No. Major constructs X SD 1 2 3 4 5 6 7 8 9 10 11 12
1 Cognitive innovativeness 3.73 0.67 0.813
2 Sensory innovativeness 3.11 0.88 0.298* 0.852
3 Domain-specific
innovativeness 3.03 0.88 0.079** 0.021 0.772
4 Social risk 2.61 0.94 20.138* 0.063 20.077** 0.866
5 Time risk 2.72 0.87 20.099* 0.030 20.198* 0.481* 0.770
6 Financial risk 2.86 0.87 20.012 0.081** 20.238* 0.264* 0.487* 0.810
7 Physical risk 2.50 0.88 20.135* 0.061 20.096* 0.420* 0.374* 0.306* 0.830
8 Performance risk 3.27 0.84 0.098* 0.021 20.040 0.226* 0.262* 0.384* 0.286* 0.824
9 Psychological risk 2.52 0.86 20.133* 0.093** 20.184* 0.483* 0.448* 0.372* 0.461* 0.344* 0.887
10 Network risk 2.71 0.84 20.092** 0.108* 20.175* 0.436* 0.414* 0.338* 0.418* 0.323* 0.539* 0.807
11 AQNIP 2.71 0.74 0.059 0.183* 0.389* 0.262* 0.090** 20.022 0.232* 0.092** 0.130* 0.115* 0.901
12 ADOPT 4.14 2.33 0.176* 0.035 0.307* 20.115* 20.043 20.052 20.105* 20.067 20.137* 20.118* 0.120* 0.850
Notes: * Correlation is significant at the 0.01 level (two-tailed); ** Correlation is significant at the 0.05 level (two-tailed)
Reliable coefficients (Cronbachs alpha) are reported in the diagonal of the table; All constructs skewness (20.30 to 0.72) and kurtosis (20.53 to 0.68) statistics
are in acceptable ranges; Adoption is operationalized as a ratio scale and modeled with a measurement error fixed at the value equal to (1 2 a) times the
indicators variance. The Cronbachs alpha of 0.85 is assumed (see MacKenzie and Lutz, 1989). All the other scale items were measured on a five-point Likert
scale anchored between (5) strongly agree and (1) strongly disagree

1978). In the second step, the data was subjected to the provide support for H3a and H3b. Consistent with our
confirmatory measurement model and the results indicate hypotheses in H5 and H8, the evidences suggest that
that all items have significant loadings on the latent perceived social risk (g 0:24, p , 0:01) and physical risk
constructs, thus confirming the convergent validity (Bagozzi (g 0:19, p , 0:01) are highly correlated with AQNIP. In
and Yi, 1988)[6]. In addition, we reassessed the constructs addition, as hypothesized in H6, H9, and H10, the results
with multiple items using the procedures suggested by show that time risk (g 0:04, p . 0:10), performance risk
Bagozzi and Yi (1988). We estimated the null model (all
(g 0:02, p . 0:10), and psychological risk (g 0:01,
relations between latent variables were fixed to zero), one
p . 0:10) are not significantly associated with AQNIP.
factor model (both exogenous and endogenous constructs
converge to a single second order factor), and the Contrary to our expectation, financial risk (g 20:10,
hypothesized models (both base and hierarchical models) p . 0:05) and network externalities risk (g 0:00,
(see Iverson and Maguire, 2000; Podsakoff et al., 2003). The p . 0:10) show non-significant association with AQNIP, and
hypothesized models show better fit with the data than does hence, H7 and H11 are unsupported.
the null model (the x2 difference between the base and the null We next estimated the mediating model (including the
models is Dx2 224.45, Ddf 21, p , 0:01; and between the mediating effect of domain specific innovativeness) and tested
hierarchical and the null models is Dx2 355.44, Ddf 14, H4 by comparing the mediating model with the base model.
p , 0:01) and the one factor model (the x2 difference between The mediating model is better fit to the data (mediating
the base and the one factor models: Dx2 162.51, Ddf 5, model x2 2985.70 and base model x2 3099.22;
p , 0:01; and between the hierarchical and the one factor Dx2 113.52, Ddf 9, p , 0:01). As such, domain-specific
models: Dx2 293.50, Ddf 12, p , 0:01). This further innovativeness mediates the cognitive innovativeness
confirms the convergent and discriminant validity for all the ADOPT and cognitive innovativeness AQNIP
constructs reported in Table IV and exhibits the insignificant
relationships (H4). In addition, we developed the
impact of the common method variance (MacKenzie et al.,
hierarchical model which includes the direct relationships
2001; Podsakoff and Organ, 1986).
between cognitive innovativeness and both ADOPT and
Hypothesis testing AQNIP, as well as the mediated (by domain-specific
The overall results for the base model (here the path between innovativeness) relationship between these constructs. This
cognitive and domain-specific innovativeness is fixed to zero) hierarchical model exhibits an even better fit with the data
provide general supports for the hypotheses (see Table V). than the mediated model (hierarchical models x2 2968.93;
The g estimates from the base model shows that cognitive and the difference between hierarchical and the mediated
innovativeness significantly impacts the adoption of new
model is Dx2 16.77, Ddf 2, p , 0:01). The hierarchical
products ( g 0:18, p , 0:01), but has no significant
model results (Figure 1 and Table V) also provide supports
association with AQNIP (g 0:01, p . 0:10), thus
supporting H1a and H1b. As expected, sensory for H1a, H2a, H3a, H3b, H4, H5, H6, H7, H8, H9, and H10.
innovativeness has significant effects on AQNIP (g 0:16, In addition, H7, though unsupported in the base model, gains
p , 0:01), but not on ADOPT (g 20:03, p . 0:10). These support (g 20:12, p . 0:05) in the hierarchical model (as
provide supports for H2a and H2b. The significant relations well as in the mediating model). Since the hierarchical model
between domain-specific innovativeness and ADOPT is based on our theoretical framework and better fit with data,
(g 0:35, p , 0:01) as well as AQNIP (g 0:44, p , 0:01) support for H7 is pertinent.

Consumer innovativeness and perceived risk Journal of Consumer Marketing
Tanawat Hirunyawipada and Audhesh K. Paswan Volume 23 Number 4 2006 182 198

Figure 2 Base model

Consumer innovativeness and perceived risk Journal of Consumer Marketing
Tanawat Hirunyawipada and Audhesh K. Paswan Volume 23 Number 4 2006 182 198

Table V Path coefficients and fit indices

Path Hypothesis Base model Mediating model Hierarchical model
Cognitive innovativeness ! ADOPT H1a 0.18 (3.83)* 0.18 (3.88)*
Cognitive innovativeness ! AQNIP H1b 0.01 (0.12) 0.01 (0.21)
Cognitive innovativeness ! Domain-specific
innovativeness 0.13 (2.78)* 0.11 (2.47)**
Sensory innovativeness ! AQNIP H2a 0.16 (3.72)* 0.17 (4.46)* 0.17 (3.81)*
Sensory innovativeness ! ADOPT H2b 20.03 (20.73) 0.04 (1.00) 20.04 (20.83)
Domain-specific innovativeness ! ADOPT H3a 0.35 (8.32)* 0.38 (8.64)* 0.36 (8.16)*
Domain-specific innovativeness ! AQNIP H3b 0.44 (9.35)* 0.44 (9.63)* 0.43 (9.58)*
Global innovativeness ! Domain-specific
innovativeness ! ADOPT/AQNIP H4a
Social risk ! AQNIP H5 0.24 (4.43)* 0.25 (4.75)* 0.25 (4.73)*
Time risk ! AQNIP H6 0.04 (0.67) 0.02 (0.33) 0.02 (0.34)
Financial risk ! AQNIP H7 20.10 (21.80) 2 0.12 (2 2.18)** 20.12 (22.17)**
Physical risk ! AQNIP H8 0.19 (3.87)* 0.19 (3.94)* 0.19 (3.91)*
Performance risk ! AQNIP H9 0.02 (0.34) 0.04 (0.90) 0.04 (0.85)
Psychological risk ! AQNIP H10 0.01 (0.25) 0.00 (2 0.09) 20.01 (20.08)
Network externality risk ! AQNIP H11 0.01 (0.25) 0.00 (0.04) 0.00 (0.04)
Model fit indices (1) X2 3,099.22 2,985.70 2,968.93
(2) Degree of freedom 1,213 1,222 1,220
(3) P-value ,0.001 , 0.001 ,0.001
(4) NFI 0.93 0.94 0.94
(5) CFI 0.96 0.96 0.96
(6) GFI 0.86 0.87 0.87
(7) AGFI 0.84 0.85 0.85
(8) RMSEA 0.046 0.044 0.044
Notes: a The mediating model is better fit to the data (mediating model x2 2; 985:70 and base model x2 3; 099:22; Dx2 113:52, Ddf 9, p , 0:01).
H4 is therefore supported. In addition, the hierarchical model (x2 2; 968:93) shows better fit with data than the mediating model (x2 2; 985:70;
Dx2 16:77, Ddf 2, p , 0:01); * p , 0:01; ** p , 0:05; t values are in parentheses

Discussion and conclusion innovativeness trait ! domain-specific innovativeness trait

! innovative behavior) increases the innovativeness traits
This study focuses on consumer innovativeness construct and ability to explain the new product adoption behavior. The
its outcome, i.e. innovation adoption, by first decomposing it hierarchical model, with domain specific innovativeness acting
into hierarchical levels of global, domain specific, and as a mediator, also makes the negative relationship between
actualized innovativeness. Global innovativeness is further perceived risk attributed to financial aspect of purchase and
disaggregated into cognitive and sensory dimensions while the consumers propensity to acquire information (AQNIP)
actualized innovativeness is decomposed into the actual about the new product significant. Possible explanation for
adoption and the acquisition of novel information about new this shift may lie in the definition of domain specific
products. To effectively capture the new product adoption innovativeness construct and the notion that presence of
process, the elements of innovativeness hierarchy and a domain specific innovativeness enhances the effect of global
related intervening variable (i.e. perceived risk) are (cognitive) innovativeness. This may make the purchase of the
incorporated in the innovativeness framework as salient new product more concrete and less abstract and consumers
determinants of adoption. The hypotheses pertaining to the have to suddenly start to bother about their ability to buy.
impact of innovativeness and perceived risk dimensions on In consumer electronics context, perceived social and
new product adoption enjoy general supports. Specifically, physical risk enhances consumers need to search for
without the presence of domain specific innovativeness as a information about novel products while perceived financial
mediator, cognitive innovativeness has a positive relation with risk has a negative impact on the search for products novel
actual adoption while sensory innovativeness is positively information. Perceived time, performance, and psychological
correlated with the acquisition of novel information about risk show no significant effect on the acquisition of new
new products. Domain-specific innovativeness positively consumer electronics novel information. The hypothesized
influences both actual adoption and acquisition of relation between perceived network externality risk and the
information about new products. In addition, a stronger acquisition of novel information associated with the new
support for the hierarchical model (with domain specific products also received no support. This might be explained by
innovativeness as a mediator between cognitive innovativeness the contextual factor in the consumer electronic markets.
and adoption behavior) suggests that the hierarchical or When the market is in maturity stage (e.g. Christensen et al.,
multilevel innovativeness trait approach (global 2005), technology becomes standardized while different types

Consumer innovativeness and perceived risk Journal of Consumer Marketing
Tanawat Hirunyawipada and Audhesh K. Paswan Volume 23 Number 4 2006 182 198

of technology converge, i.e. consumers can use several types relation with AQNIP. It appears that financial risk overrides
of media to record (e.g. cell phone, digital camera, the influence of sensory and domain-specific innovativeness
camcorders etc.), store (e.g. jump drive, RAM, movable file and prompts consumers to not even search for novel
storage etc.), and play with (e.g. computers, IPOD, MP3 etc.) information about new products.
content files. When consumers become more familiar with
product compatibility and technology convergence, they Managerial implications and applications
become less concerned about network externality risk,
unless, the innovation is radically different. It seems that Consumers are influenced by different elements of
consumers view the existing consumer electronic products as innovativeness differently. To market new products
not very radical (see Pandya and Dholakia, 2005 for a successfully, marketers should realize the impact of
discussion using innovation theory framework). Perceived cognitive, sensory, and domain-specific innovativeness on
network externality does not seem to be a major reason for innovation adoption. The main thrust of this study suggests
consumers to search for novel information about new that cognitive and domain-specific innovativeness make up
consumer electronic products to mitigate this risk. the best potential combination of determinants to innovation
adoption. In comparison, sensory innovators are unlikely to
Theoretical contributions jump at every new product but their sensory innovativeness
This study provides theoretical insights into the relationship trait tends to get them started on the adoption process
between consumer innovativeness and innovation adoption by (Manning et al., 1995) through acquisition of information.
evidencing the multidimensionality of both global This finding has interesting implication for segmentation
innovativeness and actualized innovativeness. It shows that decisions. This also implies that marketers need to
sensory and cognitive innovativeness differently regulate appropriately manage the market mix so that both cognitive
consumer behavior to acquire novelty. Cognitive innovators and domain-specific innovativeness traits are targeted. For
tend to actually adopt new products while sensory innovators example, the advertising with overwhelmingly novel attributes
have a high tendency to acquire the novel information about might appeal highly to consumers sensory trait but may not
new products. Sensory innovativeness trait could be do much for their cognitive innovativeness trait. The message
stimulated through the virtual adoption of new products. to consumers needs to be created to effectively stimulate
Compared to both cognitive and sensory dimensions of cognitive innovativeness trait and significantly arouse sensory
global innovativeness, domain-specific innovativeness innovativeness trait.
provides more robust prediction of actual behavior. Using Perceived risk is domain-specific multi-dimensions factor
domain-specific innovativeness to predict consumers having significant impacts on consumers adoption,
innovation adoption seems appropriate and it influences particularly the tendency to acquire new information. For
both consumers propensity to seek more information and consumer electronic products, marketers should carefully pay
actual adoption. In addition, domain-specific innovativeness attention to consumers perceived social, financial, and
in conjunction with cognitive innovativeness increases the physical risks. First, prices of new products are crucial
explanatory ability (with respect to adoption behavior and concerns for consumers. Setting too high prices for the new
information seeking propensity) even more. This may provide products may increase consumers perceived financial risk and
the explanation to the not so consistent findings in the extant consequently discouraged them to search for further
literature - global innovativeness as personal trait is unable to information. It may drive the prospective consumers away
consistently predict the innovation adoption. The results of rather than get them into the earliest stage of the adoption of
this study assert that personality trait remains important for new products. Another implication would be to get the
predictive purpose. The predictability of the personal trait consumers to try the product at a marginal financial risk, e.g.
(global innovativeness) can be heightened by incorporating leasing, renting, playpens kiosks, free trials, etc. Second, our
domain-specific innovativeness. findings suggest that consumers do care about the responses
While consumer innovativeness reveals one side of the story from significant others in their societal network to their
because its theoretical view is a push approach - possession and usages of the new consumer electronic
innovativeness engenders new product adoption (Szmigin products. This might imply that the design feature such as
and Foxall, 1998), the effects of consumer innovativeness on appearance and converting electronics into fashion accessories
adoption intention has been somewhat inconsistent (Im et al., (e.g. Swatch) may strongly influence their decision making
2003). This study suggests that perceived risk, which is process. In addition, making a novel product into a must have
theorized as instigating resistance to the adoption of or creation of a cult phenomenon might help (e.g. Apple and
innovation, also significantly impacts the innovation Ipod). Finally, the newness of consumer electronic product
adoption. Perceived risk seems to possess a pull force where features makes up an important buying criterion for the
newness leads to an uncertainty and thus holds back subjects. The concerns about physical risk from product
consumers adoption. The results support our contention usage engender consumers search for novel information of
that perceived social, financial, and psychological risks are the the new products. A key implication is the consumer
salient dimensions in the consumer electronic product interaction process management as well as the management
domain. Social and physical risks together play an active of information flow such as through public relation campaigns
role in the adoption by enhancing the acquisition of novel to mitigate the perceived physical risk.
information about new consumer electronic products
(AQNIP). AQNIP is not only employed to stimulate
Limitation and research implication
sensory and domain-specific innovativeness traits but also to
mitigate perceived social and physical risks from the adoption The limitations of this study reveal the opportunities for
of the new products. Financial risk in contrast has a negative expanding the new product adoption and consumer

Consumer innovativeness and perceived risk Journal of Consumer Marketing
Tanawat Hirunyawipada and Audhesh K. Paswan Volume 23 Number 4 2006 182 198

innovativeness knowledge base. First, the sample frame could (1989), we modeled in the confirmatory factor with a
be seen as a limitation despite the fact that several studies measurement error fixed at the value equal to (1 2 a)
have used similar sample frames for testing theories (e.g. times the indicators variance. The Cronchbachs alpha of
Boulding et al., 1992, 1993). In addition, we reduced the 0.85 is assumed to conservatively constrain the reliability
potential effect of this limitation by matching the respondents of the scales used to measure the indicator.
with the research context and the products. Second, the study
is conducted in a single context consumer electronic References
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Tanawat Hirunyawipada and Audhesh K. Paswan Volume 23 Number 4 2006 182 198

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Further reading
They believe that a personal trait in higher abstraction levels
Mitchell, V. and Boustani, P. (1993), Market development may strongly influence the relevant trait in a lower abstraction
using new products and new customers: a role for perceived
risk, European Journal of Marketing, Vol. 27 No. 2,
Individuals possessing a global innovative trait are
pp. 17-32.
Stone, R.N. and Winter, F.W. (1987), Risk: is it still characterized by a willingness to change, being receptive to
uncertainty times consequences?, in Belk, R.W. (Ed.), new information and in search of novelty and variety. The
Proceedings of the American Marketing Association Winter authors argue that global innovativeness may contain both
Educators Conference, Chicago, pp. 261-5. cognitive and sensory traits. Consumers with high cognitive
innovativeness enjoy evaluating information, and learning
how products function and how to use them. Actual adoption
About the authors of relevant products provides the ideal opportunity. While
Tanawat Hirunyawipada is a doctoral student at the sensory innovativeness also stimulates a desire for knowledge,
Department of Marketing and Logistics, University of attaining information is the main objective and the intention
North Texas. Before returning to academic, Tom spent to adopt does not necessarily ensue. It is noted that sensory
eight years as an investment banker, venture capitalist, and innovators are attracted to advertisements, product trials,
consultant in Southeast Asia, Japan and UK. His area of demonstrations and other context where information can be
practices included telecommunications, internet and mobile acquired without any obligation to purchase.
commerce, entertainment and media, and real estate Domain-specific innovativeness will prompt consumers to
investment trust. His research interest includes new acquire new products or information about the products from

Consumer innovativeness and perceived risk Journal of Consumer Marketing
Tanawat Hirunyawipada and Audhesh K. Paswan Volume 23 Number 4 2006 182 198

within a specific category, although the authors claim this in their anticipation that the physical risk dimension would be
tendency can at times span related product classes. They also important. They cited the claims made that mobile phone
believe that global innovativeness strongly influences users risked suffering the effects of radiation. Contrary to
behavior, not least because keen interest in the product expectation, the network externalities risk dimension did not
category already exists. Extant interest and tendency towards prove significant. It was concluded that this risk dimension
product usage also prompts the belief that cognitive may be more influential when products were considered to be
innovativeness is more strongly linked to domain-specific drastically different, which was apparently not the case here.
innovativeness than is sensory innovativeness. Actual As expected, sensory innovativeness was found to have
innovativeness refers to the adoption of new products or the positive relations with seeking information about new
acquisition of additional information. products and cognitive innovativeness was found to have
positive relations with actual adoption. However, the authors
Perceived risk believe that domain specific innovativeness is a more reliable
Hirunyawipada and Paswan claim that many studies have forecaster of behavior since it influences both adoption and
overlooked the significance of the different risks perceived by information acquisition tendencies. That this prophetic ability
consumers. The argument is that innovations come packaged increases when combined with the cognitive innovativeness
with risks and uncertainties that can result in a reluctance to trait suggests evidence of a hierarchical effect. It is also put
take up novel products. Limited investigations into the forward as a reason why previous studies found that behavior
influence of risk have proved inconclusive, though the could not be predicted through inherent innovativeness alone.
literature indicates that consumers may seek additional
information in order to determine the level of risk before
making a commitment. The authors suggest that perception
The authors claim that the study has significant implications
of risk may not dissuade consumers with both global and
domain-specific innovativeness traits from embracing new for marketing strategies and stress the need to appeal to both
products. Consequently, it is felt that risk may have greater cognitive and sensory innovative traits. They draw attention
influence on those consumers with the sensory innovativeness to the risks involved in creating advertisements brimming with
trait, and could prompt them to seek more information. novel attributes. Such ads may well stimulate the consumers
Previous studies have identified that risk can be perceived in sensory trait while having little effect on the cognitive
terms of financial, performance, physical, time, social or counterpart. Marketers should aim to strike a balance.
psychological aspects. The authors also include perceived risk Likewise, perceived financial, social and physical risks
with network externalities because adoption of high-tech appear relevant to this context. Over pricing products should
products often also depends on others participation. be avoided at all costs, as this is likely to dissuade the
Consumers need the security of knowing they have a consumer from seeking more information about the product.
community of users to turn to in the event of difficulties. Instead of enticing potential customer on to the path towards
Examples of network dependent products include Microsoft adoption, high prices would only serve to drive them away.
Windows and, of course, the internet. Another way of reducing perceived financial risk is to invite
The authors distributed a multi-item questionnaire to 746 the consumer to try out the product through renting, leasing
students from a university in southwest USA. Questions or free trials.
related to items including a CD player, a DVD burner and a Consumers care what others think so it may pay to focus on
portable MP3 player. Consumer electronics were selected product design to mitigate perceived social risk. The authors
because of the innovative nature of the products. The aim of claim that transforming a gadget into a fashion item may even
the survey was to examine different aspects of innovativeness create a must have effect and do wonders for actual sales.
and risk, and explore the impact on new product adoption. As for the perceived physical risk, companies should
It was anticipated that only certain risk elements would communicate through appropriate channels such as
prove relevant within this particular context. This proved to customer relations and PR campaigns in order to alleviate
be the case. For example, it was felt that domain-specific consumers fears that use of a specific product could cause
innovators would already possess high levels of knowledge and them harm.
would thus not need to assess risk in terms of performance Hirunyawipada and Paswan suggest that future analysis
and whether the products would meet expectations. On the could concentrate on more diverse product categories in order
other hand, social risk was perceived to be a factor since use of to assess the dimensions of perceived risk that apparently had
specific consumer electrical products often depends on peer little relevance in this context. Such investigation may likewise
approval of such as brand name. reveal these or other perceived risks to be context specific or
Hirunyawipada and Paswan predicted that perceived dependent. The authors also believe that the hierarchy of
financial risk would be significant. Specifically, when consumer innovativeness needs to be further clarified.
consumers believe that products are too expensive, they
would not bother to seek out any further information. While (A precis of the article Consumer innovativeness and perceived
this hypothesis was rejected in one measurement model, it risk: implications for high technology product adoption. Supplied
was supported in the other two. The authors were also correct by Marketing Consultants for Emerald.)

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