Knowledge that Transforms

Perceived risk is conceptualized in terms of expected negative utility associated with automobile brand preferences. Empirical evidence supports the notion that importance of loss is more useful as a segmentation variable than as a component in a multiplicative model. The findings also Indicate that probability of loss may operate at the handled risk level and importance of loss at the inherent risk level.

Little is known about the basis on which an individual selects and is influenced by specific reference groups. An attempt is made to explain consumer susceptibility to informal group influence by Festinger's theory of social comparison. The results of the study support hypotheses derived from the theory and offer insight into the determination of reference group influence. Marketing implications of this theory are discussed.