Much research has been devoted to investigating what motivates consumers to try new products. Previous consumer research suggests that both the price of a new product and the way it is advertised affect consumers` perceptions of the product`s performance risk (the possibility that the product will not function as consumers expect and/or will not provide the desired benefits). ♦Some of this research♦ has concluded that a relatively high price will reduce a consumer`s perception of the performance risk associated with purchasing a particular product, while other studies have reported that price has little or no effect on perceived performance risk. These conflicting findings may simply be due to the nature of product advertisements: a recent study indicates that the presentation of an advertised message has a marked effect on the relationship between price and perceived performance risk.
Researchers have identified consumers` perception of the credibility of the source of an advertised message – i.e., the manufacturer-as another factor affecting perceived performance risk: one study found that the greater the source credibility, the lower the consumer`s perception of the risk of purchasing an advertised new product. However, past research suggests that the relationship between source credibility and perceived performance risk may be more complex: source credibility may interact with price in a subtle way to affect consumers` judgments of the performance risk associated with an advertised product.