PRE-PURCHASE INFORMATION AND CONSUMER RISK PERCEPTION

AMONG ONLINE BUYERS IN TAGUM CITY

A Thesis Presented to the Thesis Committee Department

Department of Business Administration Education
UM Tagum College, Tagum City

In Partial Fulfillment on the Requirements for the Degree

Bachelor of Science in Business Administration
Major in Financial Management

SHAINA MAE P. AGUSTIN

MARJORIE A. HERNAN
JESSA L. VILLACERAN
 Chapter 1

INTRODUCTION

Rationale

India has nearly 500 million Internet users (as per 2016) and

which makes it as second-largest user worldwide, only behind China.

However, the penetration of e-commerce is less in comparison with

United States or United Kingdom but is growing at an unprecedented

rate. One of the important reasons for this is the nature of online

shops that foster various worries in the minds of the customers. After

the launch of the World Wide Web, the concept of online shopping has

developed progressively. This has been manifested through the

numerous e-commerce platforms that have been budding since the

late 2000’s. Shopping websites such as Flipkart, Amazon, Snapdeal,

Myntra etc. have fueled the rise in the shopping tendency of Indian

consumers (Panwar, 2018).

Managing risk in the perspective of the business is essential, since

it increases the likelihood of success, reducing the likelihood of failure

and uncertainty in leading the overall goals. The ability to manage risk

will help companies act more confidently on future business

decisions, because without it, a firm cannot define its objectives for

the future (Howe, 2012).

Pre-purchase information becomes a hot topic in research as it

directly influences the consumer risk perception of online shopping. It

was found to have a positive affects on the consumer risk perception,

denoting that the consumers trusted the seller (Pearson & Miller,

2010). Tan (2012) shows that there is close correlation between

consumers perceived internet shopping to be higher risk than in-store

shopping in pre-purchase information.

In the Region XI specifically in Tagum City, online consumers’

expertise with online purchases or lack therefrom, may be a big

influence of risk perception by customers and their buying choices.

Negative experiences increase levels of risk perception with on-line

buying and hamper not solely a business’s probability of holding

customers however will create it harder for alternative on-line

businesses to realize initial customers. So as to spot the variations

between customers’ preferring on-line looking and people preferring

offline looking.

However, the researcher shall create specific contribution and

generate new information regarding the pre-purchase information and

consumer’s risk perception among online buyers in Tagum City. It

solely shows that this study will raise and lead awareness to the

supposed beneficiaries of this study and presumably develop action

arrange. So, it is intended to conduct the study.

Research Objectives

The main objective of this research was determine the relationship

between the pre-purchase information and consumer risk perception

among online buyers in Tagum City.

Specifically, the study sought to attain the following objectives:

 1. To determine the level of pre-purchase information among

online buyers in Tagum City in terms of:

1.1 brand;

1.2 word-of-mouth;

1.3 customized information

2. To determine the level of consumer risk perception among

online buyers in Tagum City in terms of:

1.1 financial risk;

1.2 time risk;

1.3 product risk;

1.4 delivery risk; and

1.5 information security

3. To determine the significant relationship between pre-purchase

information on consumer risk perception among online buyers in

Tagum City.

Hypothesis

The hypothesis was tested at 0.05 level of significance which states

that there is no significant relationship between pre-purchase

information and consumer risk perception.

Review of Related Literature

Facts, theories, concepts, information, readings, and views related

to pre-purchase information and consumer risk perception among

online buyers in Tagum City, including journals from the past

research and dissertation are presented in this part of the study.

Pre-purchase Information

From the information sources, consumer information search can

be divided into internal search and external search. Specifically,

internal search is scanning the memory bank to gather information of

different optional brands, and external search obtains information

from advertising, friends or simple observation of others. Other

categorization criteria of information search include the range of

information search, where information search can be divided into

global search and local search (Pham and Chang, 2010).

Consumers typically engage far more in information search

activities to understand how such products could be used and their

potential benefits. At the same time, different consumers can perceive

different uncertainty about the usefulness, ease-of-use and

applicability of such products. This perceived risk is central to

consumers’ purchase decisions about innovative products and

services. Therefore, research on the effect of perceived risk on

information search is critically important to both control perceived

risk and understand purchasing behavior in the context of innovative

products and services. Information search is a process whereby

consumers make inquiries in the social environment and access

appropriate data so they can make reasonable decisions (Solomon,

2014).

Consequently, information search activity is entered into with the

intent of lowering the consumer’s overall perceived risk level. Berthon

(2012) suggests that the most essential pre-purchase information a

consumer should consider are, own experience with a product or

brand, recommendation (word-of-mouth) from family, friends, and

colleagues and previous imprinting as a result of promotion, usually

in association with a specific brand. Accordingly, a large number of

consumers participate in positive pre-purchase information collection

processing in order to reduce the risk.

Furthermore, pre-purchase information acquisition may alert

consumers to risks and pitfalls within the product choice of which

previously they had been unaware (Mitchell, 2014). As a result, study

of Urbany (2008) pre-purchase risk reduction essentially focuses on

increasing the amount of certainty that a satisfactory product will be

purchased as well as reducing the negative consequences.

Consumer Risk Perception

Risk perception has been introduced in consumer behavior and

marketing literature in early 60's. The internet was introduced in

Saudi Arabia in 1998. During 2001, there were one million users and

around 9.6 million users in the beginning of 2009 with a 35% annual

growth and 38% usage among the population, while usage among the

rest of the world is 28.7%. The Saudi population is a predominantly

young and computer savvy generation, and internet penetration is on

the rise which creates higher demand for internet usage and maybe

more online purchases. Moreover, the Saudi Arabian market is

considered the largest in the Middle East, with forecasted average

annual private consumption growth at 7.9% between 2011 and 2014

(Business Monitor International, 2014).

 Online shopping is a viable preference to consumers as the

internet has become an essential tool for communication and

business worldwide. With the availability of access to internet-

connected computers, as well as mobile phones and tablet computers,

be it at home, office or through facilities such as public libraries,

restaurants and cybercafés, nowadays, this trend of shopping has

become a common mode of transaction. It has become a part of daily

life ranging from purchase of flight tickets, booking hotel rooms, movie

tickets, fashionable apparel and beauty products and is now also

embracing toward online grocery. Among the items bought by e-

consumers, travel related products top the list at 82.2 per cent,

followed by books (69 per cent) and general consumer goods (59 per

cent) (Ling et al., 2014).

In spite of the momentous growth of online shopping and

electronic commerce (e-commerce), this astonishing development has

led to some new problems and challenges that the foremost internet

users’ concern comprises security of payment, data protection, the

validity and enforceability of e-contract, insufficient information

disclosure, product quality and enforcement of rights (Paynter & Lim,

2014)

The method of online shopping conducted is different compared to

traditional transactions, whereby it has developed to be more

sophisticated, thus exposing and increasing the vulnerability of

consumer perception to imbalance online shopping. A consumer may

face numerous problems, for example, in placing an order where the

wrong product is delivered or no delivery at all in spite of the fact that

payment was made to the supplier through the consumer’s credit or

debit card. There are more risks and less trust in an online setting

compared to physical stores because it is likely difficult to assess the

product and the security and privacy issues in the purchasing process

(Laroche, 2015).

Moreover, in relation to that, consumers will have a positive online

shopping experience if consumers have lesser perceived risk levels on

the internet. In the future, an increase in purchase intention will

occur if a lower perceived risk level has been achieved. Based on

literature, the theoretical framework for this study would be

conceptualized based on the abovementioned findings, using financial

risk, product risk, security risk, time risk, social risk and

psychological risk, because these variables are vastly recognized as

consumer’s perceived risk variables that hinder online purchase

intentions and these variables had been mostly studied by experts in

this field (Xin, 2016).

One of the constraints a customer has to overcome when shopping

online is there is little possibility to check the product physically

before making the purchase. A customer will depend solely on the

information provided by the online vendor. Hence, the product risk

involves a potential loss if the product did not meet the consumer

expectations in terms of product standard and quality. Product risk

denotes the possibility of product failure to meet the performance of

what it was originally intended for (Zheng, 2012).

 Financial risk is associated with money and risk capital; physical

risk refers to physical, health and energy aspects of loss; performance

risk arises when products deliver functions and meet the needs of

customers; social risk relates to the possible loss of respect and

friendship with others when purchasing or using the products; and

psychosocial risks refers to the potential damage of self-image in the

process of the product purchase or product Chaudhuri (2000).

Principal component analysis on these five aspects of perceived

risk, and extracted two factors, that is, functional risk and emotional

risk. Specifically speaking, functional risk relates to financial risk,

performance risk and physical risk, and emotional risk reflects the

social and psychological risks. This study will adopt the concepts of

the two dimensions of perceived risk, that is, functional risk and

emotional risk, to analyze the impact of the perceived risk on

information search of innovative products and services (Xin, 2016).

The internet with innovative business practices has a huge

potential as a shopping channel, as it allows a totally different and

convenient shopping environment to its consumers. Although internet

retailing/e-retailing is gaining acceptance among consumers, the

acceptance rate is not as high as that in developed economies. As

reported by the Internet and Mobile association of India (IAMAI, 2013).

A consumer perceives several factors into consideration before

deciding a particular purchase action. A consumer compares

perceived risks and benefits associated with a purchase decision to

calculate his expected utility from the purchase and will make a
purchase decision only when his expected utility is greater than zero.

The model brings out the fact that higher is the risk perceived by the

consumer in a particular purchase, the lower will be the perceived

benefits associated with it and hence lower will the utility expected

from the purchase (Benhiea, 2013).

Perceived risks and benefits in online shopping is one of the most

rigorously studied topics by researchers; however, few of them have

worked on components of risks and benefits particularly in Indian

context. Moreover, very few of them have included perceived risk and

perceived benefit in a single study. Despite of various functional

benefits, online shopping has some clear disadvantages like

consumers cannot touch or feel the product or delay in delivery and

possession. Therefore, this is obvious that consumers perceive higher

risk in shopping in such non-store formats (Suki, 2017).

Financial risk in online context is defined as net loss of money to a

customer due to the possibility of misuse of credit card information.

Security considerations regarding transactions over internet are very

common among online consumers and media news fosters it. Many

consumers believe that it is very easy to get a credit card stolen over

the internet. financial risk not only make online shoppers more

selective regarding the websites they patronize but also prevent heavy

shoppers from spending as much online as they might otherwise

spend if they were not concerned with financial risk (Suresh &

Shashikala, 2011).
 The introduction of the internet as a shopping channel offers a

new opportunity for both manufacturers and retailers to reach

potential consumers in a more efficient way. Yet, it represents a

challenge for retailers to understand online consumer behavior and

adjust marketing strategies accordingly. Using the internet as a

shopping channel has witnessed a rapid growth during the past

decade. Despite this steady growth, online sales are still accounts for

a small percentage (7%) of total consumer sales (Forrester report,

2010).

Many scholars have argued that consumers' perceived risk during

online purchasing influences their intention of doing so. Before

purchasing a product, a consumer typically considers the various

risks associated with the purchase. In this perspective, this study will

attempt to investigate the influence of consumers' perceived risk in

online shopping on attitude and intention towards e-commerce

adoption in Saudi Arabia. Specifically, the perceived risk will be

investigated as a multidimensional concept, where investigating it as a

one-dimensional perspective is the predominant in internet literature.

It helps in explaining not only do consumer’s face risk during online

shopping, but explains the kind of risks consumers face when

shopping online (Davis, 2013).

Correlation between Measures

There is a significant relationship between the two variables in

which the pre-purchase information significantly influences consumer

risk perception. Consequently, there is a need based on the gap in the

literature and perspective to research the significant relationship

between consumers risk perception, pre-purchase information with

knowledge sharing. Because every online buyer responsibility is to

share knowledge, this study investigated how consumers risk

perception on pre-purchase information contributes to their success

in sharing knowledge (Master, 2013). 

Financial is often connected to the individual’s beliefs about it, the

way he/she perceives personal finances, and how it relates to what

he/she does with money. Thus, the challenge becomes evident when

individuals form and have opposing financial beliefs. Specifically,

when online buyers have traits that are more in line with being a

spender while the other has traits that are more in line as being saver,

respective moods and behavior towards each other could change.

Inevitably, the individual online buyers may not have the best

marketing skills to effectively manage financial conflict, which tends to

lend itself (Masarik, 2016).

Perceived risk is the uncertainty a consumer has when buying

items, mostly those that are particularly expensive, for example, cars,

houses, and computers. Every time a consumer considers buying a

product, he or she has certain doubts about the product, especially if

the product in question is highly priced (Gharleghi, 2015).

The research presentation and discussion of various literature had

helped bring into focus the importance of consumer risk perception on

pre-purchase information among online buyers in Tagum City.

Theoretical framework of the Study

The study is anchored in the research of Houng-Yal, (2002) who

concluded that Pre-purchase information processing is directly related

to reducing consumers' risk perception. In particular, information

processing associated with product performance plays a crucial role in

reducing consumers' perceived risk in online transactions.

The study is supported by the proposition of Cox, (2007) which

states that, consumer risk perception can be link and rely on pre-

purchase information because of some factors that signifies how

consumer information processing affects consumers' perception of

risk prior to purchase.

Tan & Ha, (2001) proposed factors that are relevant on pre-

purchase information. These factors are namely; brand, word-of-

mouth and customized information that are associated with online

buying their findings indicate that missing information can affect

buyers' tastes and purchase decisions made subsequently. Brand

information processing is defined as the extent to which consumers

allocate attention and processing resources to comprehend and

elaborate on brand information in an ad. It is also defined as any

executional cue designed to communicate the advertised message

(Maclnnis, 2009). Word-of-mouth is an informal communication about

characteristics of business or a product which occurs between

consumers (Wesbrook, 2000). Customization as information source is

an offering optimal self-relevance information for each segmented

customer based on experiences of existing of membership customers

Meyvis, 2002).

However, the dependent variable which is consumer risk

perception, Masoud (2013) investigated the effects of perceived risk

time risk, financial risk, information security risk, delivery risk and

product risk on online buyers in Jordan using a sample size of 395

respondents where the majority of the consumers are online shoppers.

In relation to that, consumers will have a positive online shopping

experience if consumers have lesser perceived risk levels on the

internet. In the future, an increase in purchase intention will occur if

a lower perceived risk level has been achieved.

Conceptual Framework

Presented in Figure 1 is the conceptual framework of the study.

The independent variable of this study is the consumer risk

perception with the following indicators: time risk, financial risk,

information security risk, delivery risk and product risk.

First, time risk Potential loss of time associated with making a bad

purchasing decision by wasting time researching and making the

purchase, only to 5% Pre-Publication Discount on all

Forthcoming Reference Books Browse Titles. Second, financial risk the

possibility that a company's cash flow will prove inadequate to meet

its obligations. Third, information security risk comprises the impacts

to an organization and its stakeholders that could occur due to

the threats and vulnerabilities associated with the operation and use

of information systems and the environments in which those systems

operate. Fourth, delivery risk the chance that a counterparty may not

fulfill its side of the agreement by failing to deliver the underlying

asset or cash value of the contract. Other terms to describe this

situation are settlement risk, default risk, and counterparty risk.

Fifth, product risk defined in financial terms as the chance that an

outcome or investment's actual gains will differ from an expected

outcome or return. Risk includes the possibility of losing some or all

of an original investment. Quantifiable, risk is usually assessed by

considering historical behaviors and outcomes.

The dependent variable refers to pre-purchase information with

three indicators namely: brand, word-of-mouth, and customized

information.

First, Brand an identifying symbol, mark, logo, name, word,

and/or sentence that companies use to distinguish their product from

others. A combination of one or more of those elements can be utilized

to create a brand identity. Legal protection given to a brand name is

called a trademark. Second, word-of-mouth is when a consumer's

interest in a company's product or service is reflected in their daily

dialogues. Third, customized information a system that

delivers information tailored to the interests, preferences, needs, and

context of a user or a group of users. Learn more in: Personalization

in the Information Era.

Significance of the Study

The findings of this study are significant to the following:

 Online Sellers. Through this study, online sellers may improve

their products and services by providing effective information online.

Also, this will increase the positive feedbacks and reduced consumer

risk perception on online transactions.

Online buyers. The result of this study, buyers will have an idea

what are the things to consider before deciding to buy a certain

product through online. Further, this study can help buyers to decide

through pre-purchase information that meets consumer needs and

wants.

INDEPENDENT VARIABLE DEPENDENT VARIABLE

PRE-PURCHASE CONSUMER RISK

INFORMATION PERCEPTION

 brand
 time risk
 word-of-mouth  financial risk
 customized
 information
information
security risk
 delivery risk
 product risk
Figure 1. The Conceptual Paradigm of the Study
 Future Researchers. This study may serve as a valuable source of

data while conducting future researcher studies especially the

outcome of consumer risk perception on pre-purchase information

among online buyers.

Definition of Terms

To better understand the study, the following terms are defined

conceptually and operationally.

Pre-Purchase Information. Pre-purchase information refers to an

integral part of consumer’s decision-making process and buying

behavior. In this study, it refers to the information sources consulted

prior to purchasing, which measured using brand, word of mouth and

customized information.

Consumer Risk Perception. Consumer risk perception defined as

costumers’ impression, awareness or consciousness about a certain

company or its offerings. In this study, it refers to the risk in

uncertainty and adverse consequences of buying a product this

includes time risk, financial risk, information security risk, delivery

risk, and product risk.

 Chapter 2

METHOD

This chapter presents the research design, research locale,

population and sample, research instrument, data collection, and

statistical tools.

Research Design

This study used a quantitative non-experimental research design

utilizing correlation technique. This method was used when the

objective is to describe the status of the situation as it exists at the

time of the study to explore the causes of a particular phenomenon. In

correlation research, it involves collecting data in order to determine

whether the degree of a relationship exists between two of more

quantifiable variables (Gaye, 2006).

This survey deals on quantitative data about the said

phenomenon. The quantitative aspect is an appropriate schedule for

gathering the data was based through the use of questionnaire. The

focus of the study was to determine the level of consumer risk

perception on pre-purchase information among online buyers in

Tagum City.

Research Locale

The findings of this study were specific to the context of all online

buyers in Magugpo Poblacion, Tagum City, Davao del Norte. The

possibility for the general applicability of the findings was limited by

the scope, and the sample.

 Accordingly, even though there could be common features, the

findings may not have general applicability to other systems.

Presented in figure 2 is the map of the Philippines consisting of 17

regions in which the municipality of Tagum province of Davao Del

Norte is located in Region XI. Moreover, presented in figure 3 is the

vicinity map of the Philippines, highlighting Tagum City.

Tagum is a first class City of the province Davao Del Norte

Philippines, Tagum is located 55 kilometers north of Davao City, the

main economic and administrative center of Region XI. It takes about

1 hour and 30 minutes travel to Davao City. The city lies between

7°26’ N latitude 125°48’ E longitude. It is bounded by the

Municipalities of Asuncion, New Corella and Mawab on the north,

Maco, on the east, and B.E Dujali on the west. Carmen lies on its

southwestern borders, while it faces the Davao Gulf directly to the

south.

The location of the respondents is located at Magugpo Poblacion,

Tagum City, Davao Del Norte. Since, Tagum is a first District of Davao

Del Norte and compose of 23 Barangays furthermore, the place of the

respondents and the conduct of the study are located in Tagum City

Davao Del Norte, Philippines.

Source: Retrieved from City Government of Tagum page, 2021.
https://tagumcity.gov.ph

Figure 2. Map of Tagum City, Davao del Norte

Population and Sample

The respondents of this study are those consumers that buy

products and services through online in any gender aged 18-30 years

old a bonafide resident of Magugpo Poblacion, Tagum City. A total of

200 samples and will be selected through random sampling

technique.

Research Instrument

The research-made questionnaire was used to seek result or

answers suit to the context of the study. The first set of questionnaire

deals with pre-purchase information with three indicators namely;

brand, word-of-mouth, and customized information.

 In evaluating the level of pre-purchase information among online

Range of Means Descriptive Interpretation

Equipment
4.30 – 5.00 Very High This means that the level
of pre-purchase
information is evident at
all times.

3.50 – 4.20 High This means that the level

of pre-purchase
information is evident
most of the time.

2.70 – 3.40 Moderate This means that the level

of pre-purchase
information is evident
occasionally.

1.90 – 2.60 Low This means that the level

of pre-purchase
information is evident in
few instances.

1.00 – 1.79 Very Low This means that the level

of pre-purchase
information is not
evident.

buyers in Tagum City the five orderable gradations with respective

range of means and description were considered:

The second set of the instrument embarks with the pre-purchase

information. It was composed of five indicators namely: time risk,

financial risk, information security risk, delivery risk, and product

risk

In evaluating the level of consumer risk perception, the five

orderable gradations with respective range of means and description

were considered:
Range of Means Descriptive Interpretation
Equipment
4.30 – 5.00 Very High This means the level of
consumer risk
perception is very much
felt.

3.50 – 4.20 High This means that the

level of consumer risk
perception is much felt.

2.70 – 3.40 Moderate This means that the

level of consumer risk
perception is
moderately felt.

1.90 – 2.60 Low This means that the

level of consumer risk
perception is less felt.

1.00 – 1.79 Very Low This means that the

level of consumer risk
perception is not felt.

Statistical Tools

The statistical tools that will be used for data analysis and

interpretations are the following:

Mean. This statistical tool was used to determine the level of

pre-purchase information on consumer risk perception among online

buyers in Tagum City.

Pearson (r). This statistical tool employed to determine the

significance on the relationship between pre-purchase information on

consumer risk perception among online buyers in Tagum City.

 Chapter 3

RESULTS

Presented in this chapter are the data and the results of the

study. Table is arranged in subheading: level of pre-purchase

information and customer risk perception among online buyers in

Tagum City.

Level of Pre-purchase Information

among Online Buyers in Tagum City

Shown in Table 1 are the mean scores for the indicators of Pre-

purchase information among online buyers in Tagum City with an

overall mean of 4.27 with a standard deviation of 0.558, described as

very high. The very high level could be attributed to the high rating

given by the respondents in all indicators. This means that the

respondent’s response to pre-purchase information is very much

evident in the majority of the cases in the items of brand, word of

mouth, and customized information.

The cited overall mean score was the result gathered from the

following computed mean scores from highest to lowest: 4.32 or very

high for brand with standard deviation of 0.576; 4.26 or very high for

word of mouth with standard deviation of 0.602; 4.24 or high for

customized information with standard deviation 0.647.

First indicator that got the highest mean is brand which

indicates that online buyers have budget plan for my product

expenses and able to concentrate the practice of reducing costs and

increasing income to choose brand. In addition to that, they establish

relevant information about the product, constantly monitor every

product description and check legitimate brand and the quality of the

product.

The second indicator to receive the highest mean is word of

mouth which indicates that online buyers analyze product information

to make better decision before buying the product and always make

conclusion about product benefits. They also determine what type of

product and make good deal to consume the company’s product and

create personal perception about the product and the company made

of. Lastly, online buyers build good relationship to the supplier of the

product purchases.

The last indicator that got the highest mean is customized

information which only signifies that online buyer develop effective

personal system practically to identify product benefits and know how

to implement the personal purchasing power. In addition to that, they

also become more aware of product opportunities, take other effective

actions to improve customizing information and developed strategy to

access easy customized information.

Table 1. Level of Pre-Purchase Information among Online Buyers

Indicators Mean SD Descriptive Level

Brand 4.32 0.576 Very High

Word of Mouth 4.26 0.602 Very High

Customized 4.24 0.647 High

Information

Overall 4.27 0.558 Very High

Level of Consumer Risk Perception
among Online Buyers in Tagum City

Shown in Table 2 are the mean scores for the indicators of

Consumer Risk Perception among Online Buyers in Tagum City with

an overall mean of 4.27 with a standard deviation of 0.567, described

as very high. The very high level could be attributed to the high rating

given by the respondents in all indicators. This means that the

respondent’s response to Consumer Risk Perception among Online

Buyers in Tagum City is very much evident in the majority of the

cases in the items of financial risk, time risk, product risk, delivery risk

and information security.

The cited overall mean score was the result gathered from the

following computed mean scores from highest to lowest: 4.30 or very

high for product risk with standard deviation of 0.608; 4.29 or very

high for information security with standard deviation of 0.636; 4.28 or

very high for delivery risk with standard deviation 0.618; 4.24 or high

for financial risk with standard deviation of 0.648; 4.23 or high for

time risk with standard deviation of 0.650.

Among all the indicators, product risk got the highest meant

which indicates that the online buyers are choosing best brand to
achieve the quality of the product and improving their buying decision

to avoid product risk. Also, they make the right choice of technology to

simplify their product choice, select the right product with high

quality to avoid product risk and sort, categorize and group my

purchased product also to avoid upcoming product risk.

Second indicator that got the highest mean is information

security which means that the online buyers keep their information

confidential to protect their identity once they purchased a product

and handle their social media accounts as well for safety purposes.

Also, they make a deal once the seller ask their identity before they

purchase a product, ask some information about the seller before give

their personal identity and observe and investigate to the seller once

they asked their personal information.

Third indicator to receive the highest mean is delivery risk

which indicates that the online buyers choose the best courier

services to deliver their purchased products and trust online platform

to deliver their purchased items. Also, they understand the delayed

delivery time of their purchased items and make alternative way to

deliver their ordered items due to emergency situations. Lastly, they

make better deals with other delivery partner to cover their ordered

items.

Next indicator to receive the highest mean is financial risk which

tells us that online buyers are identifying the risk of the product
before they purchase it and of course selecting appropriate criteria

depending on the product purpose to avoid risk. In addition to that,

they create a plan and goals to eliminate risk and observing effectively

through interactions with my risk instinct. Lastly, they push

themselves to monitor the product perception to avoid financial risk.

Second indicator that got the highest mean is information

security which means that the online buyers keep their information

confidential to protect their identity once they purchased a product

and handle their social media accounts as well for safety purposes.

Also, they make a deal once the seller ask their identity before they

purchase a product, ask some information about the seller before give

their personal identity and observe and investigate to the seller once

they asked their personal information.

Third indicator to receive the highest mean is delivery risk

which indicates that the online buyers choose the best courier

services to deliver their purchased products and trust online platform

to deliver their purchased items. Also, they understand the delayed

delivery time of their purchased items and make alternative way to

deliver their ordered items due to emergency situations. Lastly, they

make better deals with other delivery partner to cover their ordered

items.

Next indicator to receive the highest mean is financial risk which

tells us that online buyers are identifying the risk of the product
before they purchase it and of course selecting appropriate criteria

depending on the product purpose to avoid risk. In addition to that,

they create a plan and goals to eliminate risk and observing effectively

through interactions with my risk instinct. Lastly, they push

themselves to monitor the product perception to avoid financial risk.

Last indicator to receive the highest mean is time risk which

signifies that the online buyers are creating a culture of be on time in

purchasing the product, trying to attain and maintain time

management to solve time risk and give importance on accountability

that leads to morale in time management. At the end, online buyers

prioritize time management to product satisfaction and make personal

decision to eliminate time risk.

Significant Relationship between Pre-purchase

Information and Consumer Risk Perception
among Online Buyers in Tagum City

This study's main purpose is to determine the significant

relationship between pre-purchase information and consumer risk

perception among Online Buyers in Tagum City. Pearson-r was used

to determine the correlation between the two variables.

Table 3 shows the test on the significant relationship between

pre-purchase information and consumer risk perception among

Online Buyers in Tagum City. The r-value 0.886** indicates a positive

relationship, meaning pre-purchase information does affect consumer

risk perception. The findings showed that p-value 0.000 is lower than
the 0.05 level of significance. Thus, lead to the decision to reject the

null hypothesis.

Table 2. Level of Consumer Risk Perception among Online Buyers

Indicators Mean SD Descriptive Level

Product Risk 4.30 0.608 Very High

Information Security 4.29 0.636 Very High

Delivery Risk 4.28 0.618 Very High

Financial Risk 4.24 0.648 High

Time Risk 4.23 0.650 High

Overall 4.27 0.567 Very High

Table 3. Significant Relationship between Pre-Purchase and Consumer
Risk Perception among Online Buyers

Variables Mean SD r-value p-value

E-Banking 4.27 0.558 0.886 0.000

Customer Satisfaction 4.27 0.567

*significant at 0.05 significance level

 Chapter 4

DISCUSSION

This chapter presents the summary of findings and the

pertinent conclusion drawn from these results and the

recommendation given by the researchers based on the result

obtained.

Level of Pre-purchase Information

among Online Buyers in Tagum City

Level of Pre-Purchase Information among Online Buyers in

Tagum City described as very high and very much evident. The very

high level could be attributed to the very high rating given by the

respondents in all indicators. This means that the respondent’s

response to Pre-Purchase Information among Online Buyers in Tagum

City is very much evident in the majority of the cases in the items of

brand, word of mouth and customized information.

Among all the indicators used to assess the level of Pre-

Purchase Information among Online Buyers in Tagum City, brand got

the highest mean and followed by word of mouth and the last one is

customized information.

This means that the online buyers have budget plan for my

product expenses and able to concentrate the practice of reducing

costs and increasing income to choose brand. In addition to that, they

establish relevant information about the product, constantly monitor

every product description and check legitimate brand and the quality

of the product.

The result of study confirms the preposition of Tan & Ha (2001),

that proposed factors are relevant on pre-purchase information. These

factors are namely; brand, word-of-mouth and customized information

that are associated with online buying their findings indicate that

missing information can affect buyers' tastes and purchase decisions

made subsequently. Brand information processing is defined as the

extent to which consumers allocate attention and processing

resources to comprehend and elaborate on brand information in an

ad.

Level of Consumer Risk Perception

among Online Buyers in Tagum City

Level of Consumer Risk Perception among Online Buyers in

Tagum City described as very high and very much evident. The very

high level could be attributed to the very high rating given by the

respondents in all indicators. This means that the respondent’s

response to Consumer Risk Perception among Online Buyers in

Tagum City is very much evident in the majority of the cases in the

items of product risk, information security, delivery risk, financial risk

and time risk.

 Among all the indicators used to assess the level of Consumer

Risk Perception among Online Buyers in Tagum City, product risk got

the highest mean and followed by information security, delivery risk,

financial risk and the last one is time risk.

It means that online buyers choose the best courier services to

deliver their purchased products and trust online platform to deliver

their purchased items. Also, they understand the delayed delivery

time of their purchased items and make alternative way to deliver

their ordered items due to emergency situations. Lastly, they make

better deals with other delivery partner to cover their ordered items.

The result of the study confirms the study of Masoud (2013)

investigated the effects of perceived risk time risk, financial risk,

information security risk, delivery risk and product risk on online

buyers in Jordan using a sample size of 395 respondents where the

majority of the consumers are online shoppers. In relation to that,

consumers will have a positive online shopping experience if

consumers have lesser perceived risk levels on the internet. In the

future, an increase in purchase intention will occur if a lower

perceived risk level has been achieved.

Significant Relationship between Pre-purchase

Information and Consumer Risk Perception
among Online Buyers in Tagum City

The test on the significant relationship between pre-purchase

information and consumer risk perception among online buyers in

Tagum City. The findings showed that the p-value is lower than the
level of significance. Thus, lead to the decision to reject the null

hypothesis. The r-value indicates a positive relationship. Therefore,

there is a significant relationship.

This result is anchored in the research of Houng-Yal (2002)

and Cox (2007) who concluded that Pre-purchase information

processing is directly related to reducing consumers' risk perception.

In particular, information processing associated with product

performance plays a crucial role in reducing consumers' perceived risk

in online transactions. The study also states that, consumer risk

perception can be link and rely on pre-purchase information because

of some factors that signifies how consumer information processing

affects consumers' perception of risk prior to purchase.

Conclusion

After the interpretation of data and the gathered details which

turned into figures, we had come up with this conclusion. The level of

Pre-Purchase Information among Online Buyers is very high. The level

of Consumer Risk Perception among Online Buyers is very high. There

is a significant relationship between Pre-Purchase Information and

Consumer Risk Perception among Online Buyers in Tagum City. In

addition, an increase of satisfaction will turn to positive mutual

understanding, customer retention and a bond of trust between online

sellers and online buyers.

Recommendation
 The UM Tagum College particularly the BSBA-Financial

Management Program in collaboration with the DTI – Davao del Norte

may conduct seminars, training and lectures in relation to risks

associated with online platforms and what countermeasures we can

offer to offset the said risks to Online Buyers in Tagum City. Lastly, it

may provide good insights to the future researchers that will serve as

a guide and additional information to the individuals who wanted to

conduct study related.

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