See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/232732103

Perceived Risk and Trust as Antecedents of Online Purchasing Behaviour in

the USA Gemstone Industry

Article in Asia Pacific Journal of Marketing and Logistics · June 2012

DOI: 10.1108/13555851211237902

CITATIONS READS

83 4,265

3 authors:

Steven D'Alessandro Antonia Girardi

University of Tasmania Murdoch University
106 PUBLICATIONS 1,750 CITATIONS 45 PUBLICATIONS 656 CITATIONS

SEE PROFILE SEE PROFILE

Leela Tiangsoongnern
Dhurakij Pundit University
22 PUBLICATIONS 256 CITATIONS

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Teaching Teamwork Skills in Higher Education View project

Marketing Research Education View project

All content following this page was uploaded by Leela Tiangsoongnern on 06 July 2016.

The user has requested enhancement of the downloaded file.

Asia Pacific Journal of Marketing and Logistics
Emerald Article: Perceived risk and trust as antecedents of online
purchasing behavior in the USA gemstone industry
Steven D'Alessandro, Antonia Girardi, Leela Tiangsoongnern

Article information:
To cite this document:
Steven D'Alessandro, Antonia Girardi, Leela Tiangsoongnern, (2012),"Perceived risk and trust as antecedents of online purchasing
behavior in the USA gemstone industry", Asia Pacific Journal of Marketing and Logistics, Vol. 24 Iss: 3 pp. 433 - 460
Permanent link to this document:
http://dx.doi.org/10.1108/13555851211237902
Downloaded on: 18-06-2012
References: This document contains references to 149 other documents
To copy this document: permissions@emeraldinsight.com

Access to this document was granted through an Emerald subscription provided by Emerald Author Access

For Authors:
If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service.
Information about how to choose which publication to write for and submission guidelines are available for all. Please visit
www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
With over forty years' experience, Emerald Group Publishing is a leading independent publisher of global research with impact in
business, society, public policy and education. In total, Emerald publishes over 275 journals and more than 130 book series, as
well as an extensive range of online products and services. Emerald is both COUNTER 3 and TRANSFER compliant. The organization is
a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive
preservation.
*Related content and download information correct at time of download.
 The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1355-5855.htm

Online
Perceived risk and trust as purchasing
antecedents of online purchasing behavior
behavior in the USA gemstone
433
industry
Received 3 March 2011
Steven D’Alessandro Revised 13 February 2012
Department of Marketing and Management, Macquarie University, Accepted 25 February 2012
Sydney, Australia
Antonia Girardi
Murdoch Business School, Murdoch University, Perth, Australia, and
Leela Tiangsoongnern
DPU International College, Dhurakij Pundit University, Bangkok, Thailand

Abstract
Purpose – The purpose of this study is to seek to investigate the impact that perceived risk and trust
have on online purchasing behavior, in particular the nature of purchasing associations within the
expensive, complex, high risk and credence products such as gemstones.
Design/methodology/approach – An online survey of purchases of Thai gemstones was used to
collect the data. Partial Least Squares was used to test the conceptual model of the study.
Findings – The results of this study suggest that the type of internet marketing strategy used by the
seller (the place strategy) and the buyer’s privacy and security practices influence a buyer’s perceived
risk to purchase gemstones online. Furthermore, the study showed that perceived risk reduces trust
and perceived risk reduces online purchases.
Research limitations/implications – The implications of these results are that privacy and
security concerns of online buyers must be addressed in order to reduce perceived risk and thereby
increase trust which is fundamental to the amount purchased online.
Practical implications – Online marketers of highly risky products need to consider that policies
that promote trust and reduce risk are important means of increasing purchases. In particular, the use
of multichannels will reduce perceived risk.
Originality/value – This is a rare study which examines purchases of expensive, complex, high risk
and credence products such as gemstones. It is also a study which examines the behaviour of
organisational buyers. Also actual reported online purchases are investigated rather than just intent.
Keywords Internet marketing, Internet retail, Organizational buying behaviour, Perceived risk, PLS,
Trust, Consumer behaviour, United States of America
Paper type Research paper

Asia Pacific Journal of Marketing and

Logistics
The authors wish to thank the Editor of the Asia Pacific Journal of Marketing and Logistics, and Vol. 24 No. 3, 2012
the input of two anonymous reviewers. The assistance provided by Bill Chitty and Margaret pp. 433-460
q Emerald Group Publishing Limited
Alymore in their insightful edits and comments in revising the paper is also appreciated by the 1355-5855
authors. DOI 10.1108/13555851211237902
APJML Introduction
24,3 Pierre Omidayr, the founder of eBay in 1995, identifies some of the main obstacles to
the development of online retailing:
The whole idea was to help people do business with one another on the Internet. People
thought this was impossible, because how could people on the Internet – remember this was
1995 – how could they trust each other? How could they get to know each other? (Goldsmith
434 and Wu, 2006, p. 126).
Today these main drivers of e-commerce remain and include the notion of building trust
while managing the perceived risk of purchase (Belanger et al., 2002; Biswas and
Burman, 2009; Bolton et al., 2008; Büttner and Göritz, 2008; Schlosser et al., 2006). Online
purchases can be risky simply because people do not know each other and cannot
physically inspect goods or meet the service providers. The information provided for
online transactions may not be secure and concerns about privacy may reduce the
likelihood of buying over the internet (Bauerly, 2009; Kim and Montalto, 2002). Lack of
fraud protection may reduce the faith or trust in online purchases, a problem which eBay
encountered in its early development (Goldsmith and Wu, 2006, pp. 132-4). Research by
Bauerly (2009) suggests that this is still a problem since as much as 6.25 per cent of all
e-transactions may be subject to fraud.
To compensate for the potential risk, online consumers rely on the information that
sellers provide to them, or the traders’ policies, which secure their personal information
and protect their privacy (van der Heijden et al., 2003). While protection from fraud
may be difficult, guarantees provided by online retailers are an important means of
gaining the trust of consumers (Schlosser et al., 2006; Wind and Mahajan, 2001).
Despite these challenges, online purchasing is increasingly becoming an accepted
form of buying. A worldwide study of online purchases by Nielsen in, 2010 found that
about 875 million people worldwide that year had purchased something online. The
most popular items purchased online tend to be low-risk and easily branded items,
including books 44 per cent, clothing/accessories/shoes 36 per cent, airline
tickets/reservations 32 per cent and electronic equipment 27 per cent. The popularity
of online purchases continues to grow. Research by Euromonitor International (2009),
found that global online sales had increased from US$81.2 billion in 2003 to US$252.6
billion at the end of 2009.
Because of the nature of these findings, academic research focuses on more
commonly purchased products and services such as books, CDs, online tickets,
cosmetics and sporting goods (Bart et al., 2005; Dillon and Reif, 2004; Doolin et al., 2005;
van der Heijden et al., 2003; Jarvenpaa et al., 1999; Kim and Montalto, 2002; Miyazaki and
Fernandez, 2000, 2001; Schlosser et al., 2006). Research about the online purchases of
more complicated, expensive and riskier products appears to be inadequate. Studies
about online purchases by organizational buyers appear to be scarce (some exceptions
are Büttner and Göritz (2008) for pharmaceutical drugs, Biswas and Burman (2009) for
digital cameras). One example of high-risk product predominately purchased by
organizational buyers is gemstones.

Background and context

In 2001, Merrill Lynch cited in Krausz (2001) forecast that over a quarter of the world’s
estimated US$8 billion annual gemstone sales would be conducted online by 2005 but
that has not eventuated. Online gemstone trading volume only presently accounts for
approximately 2 per cent of the world gemstone trading value. This low figure is Online
surprising given evidence that gemstone traders have used online and traditional purchasing
selling methods since late 1999 (Beard, 2001; Prost, 2001; Zborowski, 2005), industry
surveys by Colored Stone Magazine (cited in Beard (2001) and Prost (2005)) report that behavior
only a minority of gemstone dealers have successfully sold gemstones online.
Given the benefits of online trading, there is a need to investigate which factors
influence the online purchasing behaviour of such a high value product like gemstones. 435
Research is required into online retailing that examines the purchasing patterns, which
in turn can provide sellers with policies to encourage trust and reduce the perceived
risk for buyers. Thus, this paper aims to:
.
identify factors influencing the perceived risk for online gemstone buyers;
. determine if the concern of fraud influences the trust of online gemstone buyers;
and
.
measure the relationship between the perceived risk, the trust, and the online
purchasing behaviour of gemstone buyers.

To address these issues, this article develops and test a conceptual model based on a
number of theories of online consumer behaviour.

Theory
Consumer behaviour theories suggest four major issues influencing buyer behaviour –
cultural, social, personal and psychological factors (Schiffman et al., 2011). In the study
of online consumer behaviour in recent times, two important psychological theories
have emerged as explanations of the degree of online purchases; these are perceived
risk and trust (van der Heijden et al., 2003; Jarvenpaa et al., 1999; Palmer et al., 2000;
Van Slyke et al., 2002). For example, perceived risk and trust have found to be
antecedents of a buyer’s willingness (Jarvenpaa et al., 1999) and a buyer’s intention
(Kimery and McCord, 2002) to purchase books and kitchen accessories, online.

Perceived risk and consumer behaviour

Bauer (1960, p. 24) originally introduced the construct of perceived risk into the
marketing literature, stating that:
[. . .] consumer behaviour involves risk in the sense that any action of a consumer will produce
consequences which he cannot anticipate with anything approximating certainty, and some
of which at least are likely to be unpleasant.
Since then, perceived risk has become a common construct used by researchers in
consumer behaviour (Chaudhuri, 1998; Hoover et al., 1978), organizational behaviour
(Doney and Cannon, 1997; Upah, 1980) and in online consumer behaviour (Archer
and Yuan, 2000; Gifford and Bernard, 2006; Ha, 2002).
There is one remarkable feature of these applications of perceived risk. It is evident
that perceived risk has been adopted to investigate a variety of product categories. Table I
presents examples of studies examining perceived risk across product categories. In
considering the offline purchasing channel, it appears from these examples that
perceived risk can be applied to several product categories ranging from convenience,
low involvement products such as apparel and personal hygienic products (Jacoby and
Kaplan, 1972; Kim and Lennon, 2000) to high involvement products such as automobiles
 24,3

436

Table I.
APJML

product categories
perceived risk across
Examples of studies on
Products Studies Results

Offline channel
Apparel (i.e. suit, overcoat, dress shoes); drug (i.e. Jacoby and Kaplan (1972) Similar types of products had similar risk types
toothpaste, vitamins, aspirins); hygienic (i.e. (e.g. performance, financial). Overall risk could be
deodorants, razor blades); recreational (i.e. sports explained by several risk types
cars, colour TV, playing cards)
Convenience products (e.g. deodorant, headache Kaplan et al. (1974), Laurent and Kapferer (1985) Higher value, more complicated and more
pill, coffee, car, TV) and Mitchell (1999) involving products were more risky than
products less in those characteristics
Grocery (e.g. soft drinks) Wu et al. (1984) Risk taking was positively associated with the
number of generic products purchased, but risk
takers would not routinely purchase generic items
perceived as high risk
Foods (i.e. Kentucky) Roseman and Kurzynske (2006) There was a relationship between food safety
perceptions and behaviours. Kentucky consumers
who perceived higher risks exhibited safer food
handling behaviours
Organic food (e.g. vegetable, fruit) Gifford and Bernard (2006) The potential benefits from organic growing
methods and perceived risk from conventional
agricultural methods increased the purchase
likelihood of organic food
Apparel television shopping Kim and Lennon (2000) The amount of information perceived from a
television-shopping segment selling apparel was
negatively related to perceived risk and positively
related to purchasing intention
Automobile Srinivasan and Ratchford (1991) Perceived risk had a positive relationship with
benefits of information search. Benefits of
information search were positively related to
amount of information search (e.g. time taking,
number of dealer visit)
Health (i.e. cigarette) Pauline et al. (2002) There was a relationship between risk in smoking
and benefits to quit
(continued)
Products Studies Results

Online channel
17 consumer products (e.g. books, clothing,
computer, cosmetic, foods, hygienic, music,
sporting goods, toys, electronics)
Web site’s features (privacy and security
practices)
Web site’s features (privacy practices)
Books
CDs
Textbooks
20 consumer products (e.g. books, computer
software, travel and accommodation, movies and
music, clothing, gifts, toys)
Travel
Miyazaki and Fernandez (2000)
Miyazaki and Fernandez (2001)
Kim and Montalto (2002)
Jarvenpaa et al. (1999)
van der Heijden et al. (2003)
Dillon and Reif (2004)
Doolin et al. (2005)
Lin et al. (2009)
Prevalence of privacy and security statements
was not related to perceived risk. However,
percentage of privacy and security statements in
a category was positively related to category-
purchase intention
Perceived risk of conducting online purchases
was negatively related to the rate of online
purchasing. Concern about system security was
negatively related to the rate of online purchasing
Perceived risk of privacy invasion significantly
reduced the probability of use of online
technology
Higher trust in online seller decreased perceived
risk which reduced perceived risk increased a
buyer’s willingness to purchase online
Reduced perceived risk increased trust, and
attitude towards online purchasing which
increased a buyer’s intention to purchase online
Consumer risk and shopping experience
perceptions influenced experienced online
purchasing decision more than customer service
Perceived risk was negatively related to the
amount and frequency of online purchasing
Consumers were not willing to purchase some
travel products due to perceived risk
purchasing
behavior
Online

437

Table I.
APJML (Srinivasan and Ratchford, 1991). In line with the suggestion of Mitchell (1999), food and
24,3 grocery items are also another popular category investigated by researchers (Gifford and
Bernard, 2006; Roseman and Kurzynske, 2006; Wu et al., 1984). Perceived risk has also
been studied in products that are associated with poor health-outcomes such as tobacco
(Pauline et al., 2002).
In the online consumer behaviour literature, perceived risk is recognised as very
438 important, but the research has been limited to only a few product categories, making
generalisations about its impact difficult to determine (Miyazaki and Fernandez, 2000).
Research on the role of perceived risk in online purchases has been limited to four
product categories; these are books (Dillon and Reif, 2004; Doolin et al., 2005; Jarvenpaa
et al., 1999), music, CD’s and computer software (Doolin et al., 2005; van der Heijden et al.,
2003; Miyazaki and Fernandez, 2000). New areas of study of perceived risk (that do not
exist in traditional purchasing) such as a web site’s features (i.e. privacy and security
practices) have also emerged (Kim and Montalto, 2002; Miyazaki and Fernandez, 2001).
These studies suggest that the higher the risk the less likely products are to be purchased
online (Doolin et al., 2005; Jarvenpaa et al., 1999; Miyazaki and Fernandez, 2001).
Nevertheless, it is notable from these examples that a specific product such as gemstones
was rarely used when investigating the perceived risk both in offline and online
purchasing.
Overall, it can be seen that perceived risk has been extensively used in studies looking
at both offline and online purchasing behaviour and in a variety of product categories.
Based on the above examples, this thesis considers perceived risk as a versatile
construct that is applicable to many areas. Thus, it can be considered appropriate to
apply the theory of perceived risk to examine the specific area of gemstone purchasing.

Perceived risk in online purchases

While buyers tend to perceive some risk in offline purchasing, they are likely to
associate more risk with online purchasing (Doolin et al., 2005). It is suggested that this
risk in an online transaction may result from a buyer’s inability to inspect and compare
a product’s quality for themselves (Tan, 1999), and from providing and compromising
personal information (Doolin et al., 2005; Liebermann and Stashevsky, 2002). Perceived
risk associated with online purchasing received less attention in early online
purchasing literature ( Jarvenpaa and Todd, 1997). Some scholars (Pires et al., 2004)
noted that perceived risk towards online purchasing has been disregarded in buyer
behaviour research. This is perhaps because the importance of perceived risk to online
purchasing was not obvious at that time. To date it is evident that a buyer’s perceived
risk is one of the major impediments to the growth of online commerce (Awad, 2004;
Culnan, 1999; FTC, 2000; United Nations, 2001, 2005), there have been a number of
studies addressing this issue. Similar to the interpretations of perceived risk in offline
purchasing literature perceived risk in the online purchasing has been conceptualised
diversely across studies. Examples of these studies are summarised in Table II.
There appears to be two common issues arising from these examples. First, it can be
seen that perceived risk has been defined differently according to the focus of the study.
For instance, with the focus on internet experience, concerns regarding the privacy and
security issues, and online purchasing, Miyazaki and Fernandez (2001) interpreted
perceived risk as risk associated with a buyer’s internet experience and a buyer’s
concerns regarding the privacy and security issues related to online purchases. With the

Studies Interpretations of perceived risk
Jarvenpaa et al. Perceived risk associated with a buyer’s
(1999) willingness to purchase online seller
Tan (1999) Perceived risk associated with internet
shopping behaviour
Miyazaki and Perceived risk associated with privacy and
Fernandez (2000) security disclosures and purchase intentions
Kim et al. (2000) Perceived risk associated with the amount
and frequency of online purchasing
Miyazaki and Perceived risk associated with internet
Fernandez (2001) experience, and concerns regarding the
privacy and security of online purchases, and
rate of online purchasing
Kim and Perceived risk towards the use of online
Montalto (2002) technology by consumers
Ha (2002) Perceived risk associated with online pre-
purchase information (i.e. brand, word-of-
mouth communication, customised
information) and a brand purchase online by
the consumer
van der Perceived risk associated with attitude
Heijden et al. towards online purchasing and buyer’s
(2003) intention to purchase online
Dillon and Reif Perceived risk associated with the online
(2004) purchasing decision
Pires et al. (2004) Perceived risk associated with the frequency
of online purchasing
Doolin et al. Perceived risk associated with the amount
(2005) and frequency of online purchase made
Biswas and Perceived transaction risk is more important
Burman (2009) than performance risk for online products
Featherman et al. Privacy disclosures and policies by retailers Brand name, guarantees and privacy policies
(2010) reduce perceived risk
Online
Consequences
purchasing
Negative outcomes based on risk, potential
for loss and negative situation from the behavior
decision to purchase a product from the
online seller
Negative outcomes based on product
performance risk (i.e. inability to inspect 439
product), economic risk (i.e. inability to
compare price or quality of similar products,
making a poor purchase decision)
Negative outcomes based on general risk
towards the online purchasing (i.e. how risky
to purchase products online)
Negative outcomes based on price-oriented
style (e.g. financial costs/charges, attractive
of special rewards and discounts), net-
oriented style (e.g. frequency and amount of
time of using a WWW browsers and internet
skill) and time-oriented style (e.g. duration of
internet experience)
Negative outcomes based on general risk
towards the online purchasing
(e.g. purchasing products online is safe or
risky)
Negative outcomes based on privacy
invasion
Negative outcomes based on the expectation
of possible loss from performance risk (i.e.
products do not meet expectations),
psychological risk (i.e. negative effect on
consumer image and privacy), financial risk
(e.g. costs from bad purchase) and time-loss
risk (e.g. search costs)
Negative outcomes based on risk, potential
for loss and negative situation from the
decision to purchase online
Negative outcomes based on personal risk
(e.g. credit card security), privacy loss, and
product performance risk (e.g. a product fails
to meet expectations)
Negative outcomes from a potential loss from
the purchase of a brand based on the overall
risk (i.e. the likelihood that purchase of the
item will result in general risk of the
consumer)
Negative outcomes based on product
performance risk (i.e. inability to inspect
product), economic risk (i.e. inability to
compare price or quality of similar products,
making a poor purchase decision), security
risk (i.e. credit card abuse security) and
privacy risk (i.e. compromising personal
information) Table II.
Examples of
interpretations of online
perceived risk across
can reduce perceived risk studies
APJML focus on the information that buyers required to purchase an online-brand product, Ha
24,3 (2002) described perceived risk as being associated with online pre-purchase
information (i.e. brand, word-of-mouth communication, customised information) and
an online brand purchase by the consumer. These examples corroborate that a
universally accepted definition of perceived risk remains elusive in the online
purchasing literature (Mitchell, 1999).
440
Trust and consumer behaviour
Trust is frequently acknowledged as “confidence” in another party (Sheth, 1973; Sheth
and Venkatesan, 1968; Shimp and Bearden, 1980). According to trust is considered one of
the key issues the buyer considers when making a decision to purchase. Trust, like
perceived risk, can be seen as a versatile construct applicable in various disciplines
(Morgan and Hunt, 1994). The literature describes trust as having a negative
relationship with perceived risk. In some studies, for example, trust has been considered
as a negative antecedent of the buyer’s level of uncertainty and perceived risk (Bord and
O’Connor, 1990). The reverse has also been suggested by Morgan and Hunt (1994) and
Gao et al. (2002) have stated that when a trust-based relationship between a buyer and a
seller was developed, the buyer’s trust was likely to be higher and therefore the buyer’s
uncertainty or perceived risk reduced, possibly suggesting that trust may moderate
perceived risk. It is therefore appropriate to investigate trust in relation to perceived risk.
Trust is defined as the basic expectation an individual has on the reliability of the
co-exchanger’s promises (Rotter, 1967). In a similar way, trust can be interpreted as the
outcome of the reliability and integrity of the seller, such as quality evaluation criteria
like honesty and responsibility (Dwyer and Lagace, 1986). Morgan and Hunt (1994)
corroborate this perspective by conceptualising trust as the framework of belief in the
reliability and integrity of the seller. In doing so, Doney and Cannon (1997) considered
trust as the domain of a solid credibility between the buyer and the seller, and the
reliability of the seller’s promises. This view was also supported by Gao et al. (2002)
who interpreted trust as the reliability and integrity perceived by the co-exchangers.
Trust is considered as the essential basic element in online trading (Gao et al., 2002).
Brannigan and De Jager (2003) defined trust in online transactions as the combination of
trust in online trade and trust in the online seller. It can be argued that by focusing on the
purchasing aspect, these two types of trust represent one common theme; the trust to
purchase online (Ba, 2001). Moreover, trust in online purchasing is often interpreted as
the promise and assurance of online sellers to deliver high quality products or services to
online buyers (Cowcher, 2001). It can be considered from these examples that the
assurances of online sellers tend to be a necessary element to a buyer’s trust to purchase
online.
Additionally, the interpretation of trust also emerges in specific industries such as the
gemstone industry. Here the buyer’s trust is described as one of the essential keys to
successful trading (Zborowski, 2005). It appears that trust in this industry is based on
the buyer’s satisfactory evaluation of a gemstone’s qualities (Hughes, 1997; Weinburg,
2001). However, interpretation of trust from a theoretical perspective in this industry is
limited. Definition of trust in the gemstone industry appears to draw from a
practitioner’s viewpoint. As such, the contribution of further studies in this area is
required.
Research model and hypotheses Online
This study applies the models of Jarvenpaa et al. (1999) and van der Heijden et al. (2003) purchasing
to develop a conceptual framework for determining the relationship between perceived
risk, trust, and the online purchasing behaviour of gemstone buyers. Figure 1 shows behavior
this model and indicates the relationship between these three salient constructs.
The conceptual model suggests that a number of factors influence perceived risk,
type of internet marketing strategy sellers’ use, and privacy and security concerns. 441
Propositions in the model include internet fraud protection as an antecedent of trust.
The model also proposes that perceived risk has a negative impact on trust, on online
purchasing behaviour, and that trust has a positive impact on the online purchases.

Perceived risk and its antecedents

Perceived risk online relates to privacy, and a security risk of personal information
(Doolin et al., 2005). Whether or not concerns over privacy and security are antecedents
of perceived risk in purchasing online, or are part of a wider definition of perceived risk
in internet buying, is unclear.
Online marketers can provide information or “signals” about marketing strategies
that can decrease the perceived risk of purchase (Poel and Leunis, 1999; Biswas and
Biswas, 2004). This information could include offering price discounts (Kim et al., 2000;
Gopal et al., 2005), warranties (Biswas and Biswas, 2004), credible information about
products (Pires et al., 2004), having a better web design (Bart et al., 2005), using
established brand names or retailer reputation (Ha, 2002; Biswas and Biswas, 2004;
Delgado-Ballester and Hernández-Espallardo, 2008, who suggested that increasing
advertising expenses raised brand reputation and led to a reduction in perceived risk),
and offering convenience through multichannel distribution, including other online and
offline marketing channels (Lee and Huddleston, 2006; Johnson, 2007; Biswas and
Burman, 2009). These strategies have the possibility of increasing credibility and

Type of Internet
Marketing
Strategy
H1 (–)

Privacy Percieved
H2 (+) Risk
Concern

H3 (–) H7 (–)

Secruity
practices
Online
H6 (–) Purchasing
Behaviour
H5+

H8 (+)

Figure 1.
Internet Fraud Conceptual model of the
H4 (+) Trust
Protection
study
APJML acceptance of purchasing in this manner and thus minimizing perceived risk, or as
24,3 Biswas and Biswas (2004) argue increasing trust in the online retailer, therefore reducing
perceived risk. Finally, promotion strategies such as advertising in offline sources such
as printed media, and in online sources such as industry e-marketplaces and commercial
web sites, may reduce the buyer’s perceived risk to purchase online (Ko and Park, 2002).
Examples of these marketing strategies are shown in Table III. As the most effective
442 strategy to be employed when addressing specific industries is as yet unknown, studies
exploring this area should consult several four P’s strategies. Hence:
H1. Some internet marketing strategies that marketers adopt can reduce the level
of perceived risk of online gemstone buyers.
Many online buyers express great concern about threats to privacy (Culnan, 1999;
Hoffman et al., 1999; Kim and Montalto, 2002; Teltzrow and Kobsa, 2004). Various
studies find that concern about online privacy is one of the major barriers to buyers’
acceptance of online trading (Bhatnagar, 2004; Caudill and Murphy, 2000; Culnan, 1999;
Gauzente, 2004; Hoffman et al., 1999; Milne and Culnan, 2004). A number of studies
explore a buyer’s concerns about privacy of information in relation to trust in conducting
online purchasing (Belanger et al., 2002; Chellappa and Pavlou, 2002; Luo, 2002; Metzger,
2004; Palmer et al., 2000; Shim et al., 2004; Bart et al., 2005). These studies conclude that
addressing privacy concerns promotes greater trust to purchasing online and therefore
reduces perceived risk of the purchase. There is conflicting evidence from other studies
about whether concerns about privacy increase the perceived risk of purchasing online
(Foxman and Kilcoyne, 1993; Miyazaki and Fernandez, 2001). This conflict appears to be
an area requiring further investigation, leading to the next hypothesis:
H2. Concerns about a seller’s privacy practices increase the perceived risk of
online gemstone buyers.

Features Marketing strategies

Product Increasing product types (Businessweek, 2001; Dolbow, 2002)

Extending products items in the same product categories to enhance product
variety; launching differentiate/innovative products (Beirne, 2001; Brooker, 2001;
Gao, 2005; Quelch and Klein, 1996)
Price Setting online price; using several pricing strategies such as price discount (Samiee,
1998; Shor and Oliver, 2006; Sun, 2004)
Place Offering convenience by using multichannel distributions (Lee and Huddleston,
(distribution) 2006) such as online channels with offline channels (Chu and Kim, 2006; Corbitt,
2002; Palumbo and Herbig, 1998)
Promotion Promotional mix strategies (Eid and Trueman, 2002; Gopal et al., 2006;
Table III. Krishnamurthy, 2006; Quelch and Klein, 1996; Van Vark, 2004; Yubo, 2004) such as
Examples of offline and Using the mixture of offline and online advertising
online marketing Using public relations strategies such as charity campaigns
strategies based on four Using sales promotion strategies
Ps to reduce perceived All marketing activities other than the three previous mentioned such as free
risk samples, free testimonials
Information security or the threat of breaches via viruses, worms and the hacking of Online
online databases are significant issues aligned with privacy (FTC, 1998; Rohm and purchasing
Milne, 1998). Some researchers argue that they are different concepts that should be
investigated separately (Belanger et al., 2002; Erbschloe and Vacca, 2001). Studies of behavior
the relationship between a buyer’s concerns regarding information security and their
perceived risk are limited and again the results are conflicting.
Miyazaki and Fernandez (2001) report that concerns about system security is 443
negatively related to the rate of online purchasing, while Otuteye (2002) suggests that
the lack of information concerning security of transactions is one of the major reasons
why consumers are reluctant to purchase online. This ambiguity in the research leads
to the third hypothesis:
H3. A greater belief in the competency of seller’s security practices will decrease
the perceived risk for online gemstone buyers.

Trust and its antecedents

Trust in online purchasing is the promise and assurance by online sellers to deliver high
quality products or services to online buyers (Cowcher, 2001), and is the essential
element in online trading (Brannigan and De Jager, 2003; Eastlick et al., 2006; Gao et al.,
2002). Yoon (2002) and Wang et al. (2004) see trust as being more about online confidence
of transactions or a cue based signal, rather than necessarily a relationship based
concept. Research by Schlosser et al. (2006) suggests that the trust in online commerce is
the limited to the ability to safeguard transactions and deliver products and services.
Baker (1999) and Cowcher (2001) suggest that the lack of global-standard online
trading regulations agreed to by all online co-exchangers to control deception results in a
buyer’s concerns about internet fraud. Having a robust internet fraud-protection policy is
likely to help gain a buyer’s trust to purchase online (Jarvenpaa et al., 1999; Kimery and
McCord, 2002; Wind and Mahajan, 2001; Wand et al. 200; Schlosser et al., 2006). Hence, the
greater the attention sellers give to issues of internet fraud, the greater the trust buyers will
have in purchasing online. This outcome gives rise to the following hypothesis:
H4. Buyer perceptions about the adequacy of the seller’s internet fraud-protection
practices have a positive impact on trust.
It is also possible that greater fraud-protection policies will be positively associated
with greater appreciation of the security practices of an online firm (Nöteberg et al.,
2003). Hence:
H5. Buyer perceptions about the acceptability of the seller’s internet
fraud-protection practices have a positive impact on beliefs about firm
security in online purchases.
Other factors influence trust between a buyer and seller, such as the reputation of the
seller, the nature of the relationship and the confidence of both parties (Morgan and
Hunt, 1994; Schoenbachler and Gordon, 2002; Eastlick et al., 2006). This study focuses
on trust based on the completion of an online transaction, rather than the impact of
such long-term factors as is the case in longitudinal research. The study recognizes
that the role of trust is often discussed in the online literature as part of the reverse side
of perceived risk, rather than how trust is developed per se. The following section
addresses these issues.
APJML Perceived risk and trust influence on each other and on online purchases
24,3 Perceived risk has a negative relationship with trust (Eastlick et al., 2006; Kimery and
McCord, 2002; Swaminathan et al., 1999). Greater trust likely reduces perceived risk.
For example, Jarvenpaa et al. (1999) suggest that higher trust in the online sellers does
decrease perceived risk, and this reduced perceived risk increases the buyer’s
willingness to purchase online. Similarly, van der Heijden et al. (2003) report that
444 reduced perceived risk does increase trust and attitude towards online purchasing,
which in turn increases a buyer’s willingness (intention) to purchase online.
Perceived risk has a direct negative influence on the likelihood/intention to purchase
online (Vijayasarathy and Jones, 2000; Yeung and Morris, 2006). It also affects the
online purchasing decision (Dillon and Reif, 2004), and the volume of online purchases
(Doolin et al., 2005; Miyazaki and Fernandez, 2001). Research on trust shows a positive
effect between trust and the intention to purchase online (Eastlick et al., 2006; Gefen,
2000; Koufaris and Hampton-Sosa, 2002; Shim et al., 2004; Yoon et al., 2002).
A further examination of these issues using empirical evidence from the gemstone
industry may confirm the direct effects of perceived risk and trust on online
purchasing behaviour, giving rise to the next three hypotheses of this study:
H6. Perceived risk has a negative impact on the trust of online gemstone buyers.
H7. Perceived risk has a negative impact on the online purchasing behaviour of
gemstone buyers.
H8. Trust has a positive impact on the online purchasing behaviour of gemstone
buyers.

Method
In order to develop the measures and increase the validity of the study preliminary
research was conducted with 79 gemstone sellers in Thailand. Indepth interviews were
used to develop the questionnaire items of the study (Tiangsoongnern and Vuori, 2004).
These interviews consisted of semi structured and open ended questions about the factors
which would encourage dealers to purchase to purchase gemstones online. Risk and trust
emerged as major themes, as did issues regarding secruity and privacy considerations.
For the main study, organizational gemstone buyers listed with gemstone and
jewellery associations and directories in the USA were the sample frame. While
gemstone trading is a global activity, most gemstone buyers are US-based (Khaoplum,
2002; Porncharern, 2006). The sample came from three sources:
(1) the entire population of the American Gems Trade Association (AGTA) (i.e. 877
wholesale natural gemstone suppliers/firm members and affiliate members) in
2004;
(2) the 81 exhibitors of the Gem and Lapidary Wholesalers (2004) in Tucson,
Arizona, during January 29-February 11, 2004; and
(3) 197 gemstone and jewellery dealers found in the Yellow Pages directory of
New York (Teo, 2001), and the Colored Stone Tucson Show Guide (Colored
Stone, 2005; Doolin et al., 2005).

In the 12 weeks from April to June 2005, a web-based self-administered survey was used
to collect the data, using e-mail addresses obtained from the sample frame.
Out of 1,055 potentials, 160 were inactive, resulting in 895 live e-mail addresses. From Online
these 895, 134 people replied, representing a 15 per cent response rate. This response rate purchasing
is within the acceptable range for online surveys (Comley, 2000; Ranchhod, 2001; Tse,
1998). behavior
The majority of respondents were gemstone dealers (44.96 per cent), followed by
gemstone and jewellery dealers (37.98 per cent). Respondents were mostly self-employed
and operated within a micro company that had one to ten employees (75.96 per cent). 445
These gemstone buyers had a high level of experience ranging from eight to 15 years in
the industry (69 per cent), and were educated people, 36.4 per cent having graduated
from college.
The results reveal that gemstone buyers in this study were using both offline
(60.5 per cent) and online-buying methods (39.5 per cent). The most popular
offline-buying methods were:
.
visiting gemstone exhibitions (37.3 per cent); and
.
other companies (25.0 per cent).

The most popular online-buying methods used were:

.
sellers’ web sites (48.6 per cent); and
.
gemstone and jewellery e-marketplaces (35.3 per cent).

When using online channels, buyers were more likely to purchase semiprecious gemstones
such as amethyst, topaz, quartz, moonstone and beads (69 per cent), than precious
gemstones such as ruby, sapphire and emerald (31 per cent). Most of the buyers (36 per cent)
tended to buy gemstones in loose lots (i.e. buying a number of gemstones of varying sizes
and shapes in one lot) rather than as a single piece (29 per cent). Online buyers purchased
gemstones in a variety of qualities, classified by colour, clarity, cutting style and weight,
with higher grading in these features indicating a higher quality (Bridge et al., 2003; ICA,
2001; Weinburg, 2001). The medium-high quality gemstones were the most purchased by
online organizational purchasers (41 per cent), followed by medium-low quality
(31.1 per cent), high quality (14.8 per cent) and low quality (13.1 per cent).

Measures
The study includes seven variables to test the research hypotheses. Online purchasing
behaviour of buyers was measured using the amount of online purchasing and the
frequency of purchase as suggested by Gattiker et al. (2000) and Miyazaki and
Fernandez (2001). It was recognised in this research that measurements used were a mix
of formative and reflective constructs. According to Diamantopoulos and Winklhofer
(2001), formative measures of the study included internet marketing strategy,
perceptions of internet security and fraud-protection policies. This is because these
measures represent an index of firm capabilities in these areas (Coltman et al., 2008)
rather than a measure which reflects characteristics of the phenomena. Reflective
measures included perceptions of risk and trust. Because the study uses a mix of
reflective and formative measures, partial least squares (PLS) was used to develop both
the measurement and path model for the research study (Mai et al., 2010).
Measures for this study were developed by procedures as recommended by Gefen
and Straub (2005). This consisted of two rules of thumb. The first was to only include
variables which loaded onto factors above 0.40. The second is that for each
APJML independent variable that loads onto a factor of above 0.40 on multiple factors there
24,3 must be a difference of 0.10 or more between its highest loadings on one factor to the
next highest loading factor. The loading on this factor is then ignored (Mai et al., 2010).
Loadings with insignificant t-values onto formative or reflective constructs were also
not included in the analysis (Gefen and Straub, 2005).
In order to examine discriminant validity the correlations of latent variables two
446 procedures were used. The first was to examine the item loadings to construct
correlations. The second was to examine the ratio of the square root of the average
variance extracted (AVE) of each construct to the correlations of this construct to all
other constructs (Gefen and Straub, 2005).
Trust was measured by a three-item scale adapted from the items used to measure
general risk towards online purchasing as suggested by Miyazaki and Fernandez
(2001) which reported coefficient a of 0.74. The three items consisted of the following
“I feel confident to buy gemstone(s) using the internet”; “I feel wary to buy gemstone(s)
using the internet (reverse coded)”; and “to date, buying gemstones online tends to be
reliable”. These items were measured using the same five-point Likert scale where “1”
indicated strongly disagreed and “5” indicated strongly agreed with the statement.
This measure closely follows the approach of trust, being a degree of confidence in
purchasing online, as outlined by Ba and Pavlou (2002), Bauerly (2009) and Comegys
et al. (2009).
This study interpreted trust as a buyer’s trust to purchase online, the expectations
of buyers about the reliability and integrity of the seller’s promises based on the
assurances of online sellers. That is, trust is considered as general trust to purchase
online, rather than trust in the seller (Brannigan and De Jager, 2003) or trust in the
online trade (Gao et al., 2002).
Perceived risk was measured in terms of the general risk towards online purchasing
via a two-item scale suggested by Miyazaki and Fernandez (2001) (a ¼ 0.82). This
measure consisted of the following items; “I feel that it is less risky to by gemstones
using the Internet today” and “buying gemstones online using the internet is safe”.
A 13-item instrument measures the type of internet marketing strategy that sellers
report using. One item relating to a price strategy, two items relating to place strategy,
and five items relating to promotion strategy were adapted from the industry survey of
the Jewellery Consumer Opinion Council ( JCOC) consumer predictions for 2002 (cited in
Prost (2005)). In addition, three items relating to place (distribution) strategy were
adapted from the original scales used by Belanger et al. (2002), which reported a
coefficient a of 0.72. Two items relating to strategy were adapted from Gao (2005) who
suggests that offering a variety of choices of products is related to increased sales. PLS
analysis found only two measures were above the 0.40 threshold as recommended by
Gefen and Straub (2005). These were “Buy from general e-marketplaces” and “buy
from industry e-marketplaces”. Therefore, the measure of internet marketing strategy
in this study is indicative of firms using a multiple online channel strategy.
Privacy concern was assessed by four items were adapted from Miyazaki and
Fernandez (2000, 2001), privacy principles of the Federal Trade Commission (FTC, 2000)
and Erbschloe and Vacca (2001). These items included “concern about the collection of
personal information”, “personal information being collected”, “not knowing how
personal information will be used” and “privacy information consists of the availability
of a written privacy policy”.
 Security practices were measured by single item, “using a well-known credit card Online
for payment”. Originally the measure consisted of ten items. Four items were adapted purchasing
from Miyazake and Fernandez (2000) and three items were adapted from Miyazaki and
Fernandez (2001). The other nine measures though failed to meet the 0.40 criteria as behavior
suggested by Gefen and Straub (2005). Likewise, internet fraud protection was
measured by a single item, “using a well-known payment institutions”. The original
other seven items from the scales adapted from Miyazake and Fernandez (2000, 2001), 447
Kimery and McCord (2002) and Erbschloe and Vacca (2001), failed also to meet the
loading criteria of 0.40.
All of the variables in this study used a Likert scale of measurement, with the
exception of online purchasing behaviour. These scales were anchored with “strongly
agree – 5”, “agree – 4”, “neither agree or disagree – 3”, “disagree – 2” and “strongly
disagree – 1”. Use of this five-point scale descriptor was consistent with previous
studies that have examined online purchasing behaviour of consumers (Ha, 2002; Pires
et al., 2004).
Data collected includes information relating to company type, number of employees
(staff number), years of experience, education level and buying characteristics (buying
methods, gemstone types, gemstone lot-types, gemstone lot-sizes and gemstone
quality). For the purpose of this study, buying method was used as a way to ensure
that respondents had bought gemstones online. This is indicated by selecting any of
given online-buying methods. These items were adapted from scales used by the
industry survey of the JCOC, consumers predictions for 2002, and the Colored Stone
Annual Survey 2004 (cited in Prost (2005)).
As shown in Table IV, most items loaded orthogonally onto their respective
constructs. The exception being using a “well-known payment institutions”, also loads
onto perception of security practices. As this measure is a part of the single item
construct of fraud protection and fraud protection is argued to be correlated with
security practices, this does not present any concerns regarding the analysis.
Table V, shows the cross loadings of the latent constructs, internet marketing
strategy, was found to be positively correlated with online purchases (r ¼ 0.50,
p , 0.01) and so therefore this path was included in the analysis. Table V, also shows
that there is further evidence of discriminant validity, with the square root of the AVE
for each latent construct being greater than the correlation between it and all the other
constructs (Gefen and Straub, 2005).
The final measurement properties of the scales are shown in Table VI. All measures
met the cut-off of 0.50 on the AVE as recommended by Fornell and Larcker (1981).
Composite reliabilities measures were above 0.80 as recommended by Bollen (1989).
a reliabilities were all above 0.70 and averaged 0.83.

Hypothesis testing
PLS using SMART-PLS2.0 (Ringle and Alexander, 2005) was used to estimate the
conceptual model and test the hypotheses of interest. PLS has many advantages,
including that of the outer model formulation which allows for the specification of both
reflective and formative mode as well as categorical variables, and can be used with
smaller sample sizes, unlike conventional structural equation modelling (O’Cass and
Pecotich, 2005).
APJML
Internet
24,3 Fraud marketing
protection strategy Privacy Purchases Risk Security Trust

Using a well-known 0.72 20.01 0.03 2 0.05 20.22 1.00 0.23

credit card for payment
448 Using well-known 1.00 0.04 20.06 0.05 20.24 0.72 0.25
payment institutions
Buy from general e- 0.01 0.73 20.11 0.46 20.26 20.07 0.31
marketplaces
Buy from industry e- 0.04 0.74 20.27 0.29 20.26 0.06 0.38
marketplaces
I feel confident to buy 0.24 0.53 20.24 0.39 20.74 0.19 0.88
gemstones using the
internet
Percent of gemstones 0.05 0.50 20.36 1.00 20.47 20.05 0.40
bought online
Collection of personal 2 0.05 20.25 0.95 2 0.33 0.39 0.06 20.13
information
Type of personal 2 0.03 20.23 0.94 2 0.33 0.43 0.02 20.12
information collected
Not knowing how 2 0.08 20.24 0.90 2 0.31 0.32 0.02 20.07
personal information will
be used
Buying gemstones online 0.19 0.16 0.06 0.36 20.51 0.12 0.76
tends to be reliable
I feel that it is less risky to 2 0.25 20.36 0.43 2 0.51 0.93 20.19 20.67
buy gemstone(s) using
the internet today
Buying gemstone(s) 2 0.20 20.29 0.29 2 0.36 0.91 20.21 20.69
using the internet is safe
I feel wary to buy 0.16 0.41 20.01 0.19 20.49 0.25 0.78
gemstones using the
interneta
Privacy information 2 0.05 20.23 0.80 2 0.35 0.27 0.03 20.02
consists of availability of
Table IV. written privacy policy
Cross loadings of the
items to the constructs Note: aReverse coded

Error minimization (or, the maximization of variance explained) in all dependent (or
endogenous) constructs is the primary objective of PLS. An examination of the R 2
values for the endogenous constructs reflects how well this primary objective is met
(Hulland, 1999).

Findings
Figure 2 shows the PLS results. The significance of the path bs is calculated using
bootstrapping techniques, and the resultant t-test of paths supports the findings of the
study.
The results show support for H1 (type of internet marketing strategy will reduce
perceived risk ( b) or regression coefficient ¼ 2 0.27, t ¼ 3.29, p , 0.01),
 Online
Internet
SQRT Fraud marketing purchasing
AVE protection strategy Privacy Purchases Risk Security Trust behavior
Fraud N/A 1.00
protection
Internet 0.73 0.04 1.00 449
marketing
strategy
Privacy 0.90 20.06 2 0.26 1.00
Purchases N/A 0.05 0.50 20.36 1.00
Risk 0.92 20.24 2 0.35 0.40 20.47 1.00
Security N/A 0.72 2 0.01 0.03 20.05 2 0.22 1.00
Trust 0.81 0.25 0.47 20.10 0.40 2 0.74 0.23 1.00 Table V.
Cross loadings between
Note: SQRT AVE – square root of average variance extracted the latent constructs

H2 (privacy concerns increase the level of perceived risk, b ¼ 0.34, t ¼ 4.40, p , 0.01),
H3 (security practices reduce perceived risk, b ¼ 2 0.24, t ¼ 3.47, p , 0.01), H6
(perceived risk negatively affects trust, b ¼ 2 0.72, t ¼ 11.26, p , 0.01), H5 (buyer
perceptions about the acceptability of the seller’s internet fraud-protection practices
have a positive impact on beliefs about firm security in online purchases, b ¼ 0.72,
t ¼ 14.52, p , 0.01) and H7 (perceived risk reduces online purchases, b ¼ 2 0.38,
t ¼ 3.56, p , 0.01). Support was also found for a direct link between internet
marketing strategy and the amount purchased online (b ¼ 0.42, t ¼ 4.65, p , 0.01).
The findings did not support H4 (internet fraud-protection policies increase trust,
b ¼ 0.04, t ¼ 0.92, p . 0.10) and H8 (trust is a positive predictor of online purchases,
b ¼ 0.07, t ¼ 0.63, p . 0.10). Overall the model predicts quite well the level of trust,
R 2 ¼ 0.55, is reasonable in predicting perceived risk, R 2 ¼ 0.28 and reasonably so the
level of actual online purchases, R 2 ¼ 0.37.

Discussion
The results of this study showed at first that perceived risk and the use of marketing
strategies of multiple channels to reduce it are crucial factors in the prediction of online
products. This is especially so for risky, credence types of products such as gemstones.
This result is consistent with research by Biswas and Biswas (2004), Featherman et al.
(2010) and Hong-Youl (2004) who all found perceived risk to be a major barrier to
purchasing online. The importance of perceived risk rather than trust may reflect
findings by Schlosser et al. (2006) who found that risk played a greater role than trust,
when buyers were searching (as would be the case with gemstone buyers), than just
browsing online where trust is more important.
Research by Büttner and Göritz (2008), on the online purchases of pharmaceuticals,
a more risky product than gemstones, showed that trust partially mediates the effect of
risk, suggesting the possibility that the path may be reversed between risk and trust.
A further test of this path, suggests this may be so (bTrust-Risk ¼ 2 0.71, p , 0.01).
A statistical comparison (Maruyama, 1988, p. 259) of both paths (bTrust-Risk ¼ 2 0.71
and bRisk-Trust ¼ 2 0.72) though suggests that the differences are not significant
(t ¼ 0.05, n.s) and either model can be accepted. It is also quite possible the relationship
APJML
Scale and items and loadings of latent Composite Mean a
24,3 constructs reliability Communality (SD) reliability

Perceived risk (two items) AVE ¼ 0.85 0.91 0.85 6.92 (0.95) 0.82
Reflective Measure
I feel that it is less risky to buy gemstone(s)
450 using the internet today (0.93)
Buying gemstone(s) using the internet is safe
(0.91)
Type of internet marketing strategy used by N/A 0.54 6.18 (1.23) N/A
seller. (two items) AVE ¼ 0.54
Formative Measure
Buy from general e-marketplaces (0.67)
Buy from industry e-marketplaces (0.68)
Privacy concern (four items) AVE ¼ 0.81 0.94 0.81 4.93 (2.23) 0.92
Reflective Measure
Collection of personal information (0.96)
Type of personal information collected (0.93)
Not knowing how personal information will be
used (0.90)
Privacy information consists of availability of a
written privacy policy (0.80)
Security concern (one item) N/A N/A 4.23 (0.62) N/A
Using a well-known credit card for payment
Internet fraud-protection (one item) N/A N/A 4.37 (0.69) N/A
Using well-known payment institutions
Trust (three items) AVE ¼ 0.65 0.85 0.65 8.23 (2.45) 0.74
Reflective Measure
I feel confident to buy gemstones using the
internet (0.81)
I feel wary to buy gemstones using the
interneta (0.69)
To date, buying gemstones online tends to be
Table VI.
reliable (0.76)
Measurement properties
Online purchasing behaviour (one item) 0.88 (0.93) NA
of major variables in the
analysis a
Note: Reverse coded

between risk and trust may be non-recursive and each may cause each other in the
decision making process of organizations and consumer in online transactions. Past
research has also examined purchase intent and attitudes to purchasing online (van der
Heijden et al., 2003; Jarvenpaa et al., 1999) while this study examined actual online
purchases, which may explain the differences in these results with that of studies
(Casalo et al., 2007; Comegys et al., 2009; Dash and Saji, 2007; Delgado-Ballester and
Hernández-Espallardo, 2008; Dinev et al., 2006; Eastlick et al., 2006).
This study also shows that there are a number of antecedents that managers can
influence in order to reduce perceived risk, which in turn should increase trust, and,
therefore, online purchases. For instance, marketers need to address privacy concerns,
since this increases perceived risk (H2). They may also reduce risk by meeting security
concerns (H3), as a failure to do so will increase the perceived risk associated with
online purchase. A good option may be for online marketers to have policies that
 Type of Internet
Online
R2 = 0.28
Marketing
H1(–) –0.27**
purchasing
Strategy
Percieved
behavior
Risk
H2(+)0.34**
Privacy
Concern
0.41**
451
H3(–) –0.24** H7(+) –0.38**

R2 = 0.37
Secruity
practices
H6(–) –0.73**
Online
Purchasing
Behaviour
H4 (+) 0.72**

H8(+) 0.07

Internet Fraud Trust

H3(+) 0.04
Protection

R2 = 0.55 Figure 2.
Note: *p<0.05, **p<0.01 PLS results

protect privacy which are accredited by third parties such as governments, and by
securing information provided by their customers.
Significantly, marketers can reduce the perceived risk of purchases by a particular
internet marketing strategy, in this case by distribution (H1). The results of this current
research suggest that buyers associate a lower perceived risk when gemstones are
available by other online channels (for example, other formalized trading sites or
e-marketplaces, see also Lee and Huddleston (2006). This does not mean that other
elements of the marketing strategy are unimportant. This study did not find a
measurement model that incorporated the other three parts of the marketing mix (price,
product and promotion). Other parts of the predictive model may address these omitted
elements of marketing strategy. The role of providing or advertising the seller’s
policies – which address the buyer’s concerns of privacy, security of information and
protection against fraud occurring in a highly risky transaction – may capture
promotion.
The hypothesis that internet fraud-protection policies increase trust fails to receive
support in this study. A possible explanation is that the policies of privacy and
information security, through perceive risk, have a greater influence on trust than
fraud-protection policies, or these measures may well encapsulate the fraud-protection
policies that an organisation can use.

Limitations and future research

Limitations influence the results of this study. The first is the sample size used in the
study. The results obtained from 134 online gemstone buyers in the USA may
APJML lack generality, although they came from a relevant population of interest.
24,3 Nevertheless, the overall smaller size of the population of online gemstone buyers in
the USA compared to other studies of online consumers (e.g. purchasers of CDs and
books) which are sampled from much larger populations, means that sampling error in
this study may still be lower that would be expected.
In order to test the validity of these findings, researchers should repeat this study
452 with a larger sample, such as adding gemstone buyers from other gemstone and
jewellery associations or directories, or this study could be replicated in the broader
context of cross-national research or in another product category. It is also possible
that personality traits not previously considered may influence the decision for
organizational buyers to purchase products online, as is the case with consumers
(Bosnjak et al., 2007). Research by Smith et al. (2005) also suggests that online peer and
editorial recommendations are an important factor in online markets, and are more
preferred type of information for consumers to reduce the effort of online searches and
purchases. This research study also did not experimentally manipulate web design,
which has been shown to influence the level of trust (Bart et al., 2005).
The second limitation in this study relates to the measurement of some items. The
measurement instrument used to measure the type of internet marketing strategy was
found to only consist of a type of distribution strategy that was employed. Further
research may want to develop further a formative model of an internet marketing
strategy based on a number of broader factors.
Although the prediction of trust is favourable (R 2 ¼ 0.55), the model does not include
other factors that may also influence trust. Shimp and Bearden (1980), Anderson et al.
(1989) and Young and Wilkinson (1989) suggest that a seller’s favourable reputation is
likely to help increase a buyer’s trust to purchase, as does Delgado-Ballester and
Hernández-Espallardo (2008) in online transactions. Jarvenpaa et al. (1999, 2000) suggest
that the reputation and size of an organisation affect a buyer’s trust to purchase online.
Despite these limitations, this study does add value to existing literature,
reinforcing the assertion that trust and the perceived risk through trust (or vice versa),
are still important factors that need to be considered by marketers, in relation to the
online purchases of expensive products such as gemstones. As they have done for
thousands of years, buyers will continue to seek precious gems, and doing so online
will merely confirm the age-old importance of risk and trust.

References
Anderson, E., Lodish, L.M. and Weitz, B.A. (1989), “Antecedents of continuity in conventional
industrial channel dyads”, Marketing Science, Vol. 8 No. 4, pp. 310-23.
Archer, N. and Yuan, Y. (2000), “Managing business-to-business relationships throughout the
e-commerce procurement life cycle”, Internet Research, Vol. 10 No. 5, pp. 385-95.
Awad, E.M. (2004), Electronic Commerce: From Vision to Fulfilment, Pearson Prentice-Hall,
Upper Saddle River, NJ.
Ba, S. (2001), “Establishing online trust through a community responsibility system”, Decision
Support Systems, Vol. 31 No. 3, pp. 323-36.
Ba, S. and Pavlou, P.A. (2002), “Evidence of the effect of trust building technology in electronic
markets: price premiums and buyer behavior”, MIS Quarterly, Vol. 26 No. 3, pp. 243-68.
Baker, C. (1999), “An analysis of fraud on the internet”, Internet Research: Electronic Networking
Applications and Policy, Vol. 9 No. 5, pp. 348-60.
Bart, Y., Shankar, V., Sultan, F. and Urban, G.L. (2005), “Are the drivers and role of online trust Online
the same for all web sites and consumers? A large-scale exploratory empirical study”,
Journal of Marketing, Vol. 69 No. 4, pp. 133-52. purchasing
Bauer, R. (1960), “Consumer behavior as risk taking”, paper presented at the Dynamic Marketing behavior
for a Changing World, Proceedings of the 43rd Conference of the American Marketing
Association, Chicago, IL, pp. 389-98.
Bauerly, R. (2009), “Online auction, fraud and e-bay”, Marketing Management Journal, Vol. 19 453
No. 1, pp. 134-44.
Beard, M. (2001), “Dealers feel buying chill, but quality still sells”, Coloredstone, Vol. 14.
Beirne, M. (2001), “Hershey chews on gum, mint plans; Jolly Rancher eyes preemptive strike”,
Brandweek, February, p. 9.
Belanger, F., Hiller, J. and Smith, W. (2002), “Trustworthiness in electronic commerce: the role of
privacy, security, and sites attributes”, Journal of Information Systems, Vol. 11 Nos 3/4,
pp. 245-70.
Bhatnagar, A. (2004), “A latent class segmentation analysis of e-shoppers”, Journal of Business
Research, Vol. 57 No. 7, pp. 758-67 (Note citation in text should be Bhatnaggar 2004).
Biswas, D. and Biswas, A. (2004), “The diagnostic role of signals in the context of perceived risks
in online shopping: do signals matter more on the web?”, Journal of Interactive Marketing,
Vol. 18 No. 3, pp. 30-45.
Biswas, D. and Burman, B. (2009), “The effects of product digitalization and price dispersion on
search intentions in offline versus online settings: the mediating effects of perceived risks”,
Journal of Product & Brand Management, Vol. 18 No. 7, pp. 477-86.
Bollen, K.A. (1989), Structural Equations with Latent Variables, Wiley Series in Probability and
Mathematical Statistics, New York, NY.
Bolton, G., Loebbecke, C. and Ockenfels, A. (2008), “Does competition promote trust and
trustworthiness in online trading? An experimental study”, Journal of Management
Information Systems, Vol. 25 No. 2, pp. 145-69.
Bord, R.J. and O’Connor, R.E. (1990), “Risk communication knowledge, and attitudes: explaining
relations to a technology perceived as risky”, Risk Analysis, Vol. 10 No. 4, pp. 499-506.
Bosnjak, M., Galesic, M. and Tutten, T. (2007), “Personality antecedents of online shopping:
explaining online purchase intentions using a hierarchical approach”, Journal of Business
Research, Vol. 60, pp. 597-605.
Brannigan, C. and De Jager, P. (2003), “Building e-trust”, Computerworld, Vol. 37 No. 36, p. 40.
Bridge, S., O’Neill, K. and Cromie, S. (2003), “Chapter 6: small business: definitions,
characteristics and needs”, Understanding Enterprise, Entrepreneurship and Small
Business, 2nd ed., Palgrave Macmillan, Basingstoke, pp. 179-223.
Brooker, K. (2001), “A games of inches”, Fortune, 5 February, pp. 98-100.
BusinessWeek (2001), “Oral-B unveiled age-pegged toothbrushes for kids”, BusinessWeek Online,
available at: www.businessweek.com/reuters_market/8/REUT-8KW.HTM (accessed
October 2003).
Büttner, O.B. and Göritz, A.S. (2008), “Perceived trustworthiness of online shops”, Journal of
Consumer Behaviour, Vol. 7 No. 1, pp. 35-50.
Casalo, L.V., Flavián, C. and Guinalı́u, M. (2007), “The influence of satisfaction, perceived
reputation and trust on a consumer’s commitment to a website”, Journal of Marketing
Communications, Vol. 13 No. 1, pp. 1-17.
APJML Caudill, E.M. and Murphy, E. (2000), “Consumer online privacy: legal and ethical issues”, Journal
of Public Policy & Marketing, Vol. 19 No. 1, pp. 7-19.
24,3
Chaudhuri, A. (1998), “Product class effects on perceived risk: the role of emotion”, International
Journal of Research in Marketing, Vol. 15 No. 2, pp. 157-68.
Chellappa, R. and Pavlou, P. (2002), “Perceived information security, financial liability, and
consumer trust in electronic commerce transaction”, Journal of Logistics Information
454 Management, Vol. 15 Nos 5/6, pp. 358-68.
Chu, W. and Kim, H. (2006), “Online-offline channel conflict: a game-theoretic model with
application to the automobile industry”, International Journal of Automative Technology
and Management, Vol. 6 No. 1, p. 20.
Coloredstone (2005), “Product & dealer listings”, TUCSON Show Guide: A Supplement to Colored
Stone, PRIMEDIA, Inc, New York, NY, pp. 339-460, January 27-February 13.
Coltman, T., Devinney, T., Midgley, D. and Venaik, S. (2008), “Formative versus reflective
measurement models: two applications of formative measurement”, Journal of Business
Research, Vol. 61 No. 12, pp. 1250-62.
Comegys, C., Hannula, M. and Väisänen, J. (2009), “Effects of consumer trust and risk on online
purchase decision-making: a comparison of Finnish and United States students”,
International Journal of Management, Vol. 26 No. 2, pp. 295-308.
Comley, P. (2000), “Pop-up surveys: what works, what doesn’t work and what will work in the
future”, paper presented at the ESOMAR Net Effects Internet Conference, Dublin,
available at: www.virtualsurveys.com/papers/popup-paper.htm
Corbitt, T. (2002), “Business-to-business electronic commerce”, Management Services, Vol. 46
No. 1, pp. 32-3.
Cowcher, R. (2001), “E-trust”, The British Journal of Administrative Management, No. 28, pp. 22-3,
November/December.
Culnan, M.J. (1999), Georgetown Internet Privacy Policy Survey: Report to the Federal Trade
Commission, McDonough School of Business, Georgetown University, Washington, DC.
Dash, S. and Saji, K.B. (2007), “The role of consumer self-efficacy and website social-presence in
customers’ adoption of B2C online shopping: an empirical study in the Indian context”,
Journal of International Consumer Marketing, Vol. 20 No. 2, pp. 33-48.
Delgado-Ballester, E. and Hernández-Espallardo, M. (2008), “Effect of brand associations on
consumer reactions to unknown on-line brands”, International Journal of Electronic
Commerce, Vol. 12 No. 3, pp. 81-113.
Diamantopoulos, A. and Winklhofer, H.M. (2001), “Index construction with formative indicators:
an alternative to scale development”, Journal of Marketing Research, Vol. 38, May,
pp. 269-77.
Dillon, T.W. and Reif, H.L. (2004), “Factors influencing consumers’ e-commerce commodity
purchases”, Information Technology, Learning, and Performance Journal, Vol. 22 No. 2,
pp. 1-12.
Dinev, T., Bellotto, M., Hart, P., Russo, V., Serra, I. and Colautti, C. (2006), “Privacy calculus
model in e-commerce – a study of Italy and the United States”, European Journal of
Information Systems, Vol. 15 No. 4, pp. 389-402.
Dolbow, S. (2002), “Beyond khakis”, BrandWeek, October 21, p. 1.
Doney, P.M. and Cannon, J.P. (1997), “An examination of the nature of trust in buyer-seller
relationships”, Journal of Marketing, Vol. 61, pp. 35-51.
Doolin, B., Dillon, S., Thompson, F. and Corner, J.L. (2005), “Perceived risk, the internet shopping Online
experience and online purchasing behaviour: a New Zealand perspective”, Journal of
Global Information Management, Vol. 13 No. 2, pp. 66-89. purchasing
Dwyer, R.F. and Lagace, R.R. (1986), “On the nature and role of buyer-seller trust”, behavior
in Shimp, T.A. (Ed.), Proceedings of the AMA Summer Educators Conference, American
Marketing Association, Chicago, IL, pp. 40-5.
Eastlick, M., Lotz, S. and Warrington, P. (2006), “Understanding online B-to-C relationships: an 455
integrated model of privacy concerns, trust, and commitment”, Journal of Business
Research, Vol. 59 No. 8, pp. 877-86.
Eid, R. and Trueman, M. (2002), “The internet: new international marketing issues”,
Management Research News, Vol. 25 No. 12, pp. 54-67.
Erbschloe, M. and Vacca, J. (2001), Net privacy: 2001. A Guide to Developing and Implementing
an Ironclad eBusiness Privacy Plan, McGraw-Hill, New York, NY.
Euromonitor International (2009), Direct Selling will have to Compete in a Multichannel World,
available at: www. euromonitor.com/ (accessed March 16, 2010).
Featherman, M.S., Miyazaki, A.D. and Sprott, D.E. (2010), “Reducing online privacy risk to
facilitate e-service adoption: the influence of perceived ease of use and corporate
credibility”, Journal of Services Marketing, Vol. 24 No. 3, pp. 219-29.
Fornell, C. and Larcker, D. (1981), “Evaluating structural equation models with unobservable
variables and measurement error”, Journal of Marketing Research, Vol. 18 No. 1, pp. 39-50.
Foxman, E. and Kilcoyne, P. (1993), “Information technology, marketing practice and consumer
privacy: ethical issues”, Journal of Public Policy & Marketing, Vol. 12 No. 1, pp. 106-19.
FTC (1998), Privacy Online: A Report to Congress June 1998, available at: www.ftc.gov/reports/
privacy3/priv-23a.pdf (accessed January 31, 2003).
FTC (2000), Privacy Online: Fair Information Practices in the Electronic Marketplace: Report to
Congress, Federal Trade Commission, Washington, DC.
Gao, G. (2005), “Information technology and product variety”, PhD thesis, University of
Pennsylvania, Philadelphia, PA.
Gao, T., Wang, Y., Joseph Sirgy, M. and Bird, M.M. (2002), “An integrative model on the
antecedents of buyer decision making uncertainty in organizational purchasing”, Asia
Pacific Advances in Consumer Research, Vol. 5, pp. 41-7.
Gattiker, U., Perlusz, S. and Bohmann, K. (2000), “Using the internet for b2b Activities: A Review
and Future Directions for Research”, Internet Research, Vol. 10 No. 2, pp. 126-40.
Gauzente, C. (2004), “Web merchant’s privacy and security statements: how reassuring are they
for consumers? A two-sided approach”, Journal of Economic Commerce Research, Vol. 5
No. 3, pp. 181-98.
Gefen, D. (2000), “E-commerce: the role of familiarity and trust”, Omega: The International
Journal of Management Science, Vol. 28, pp. 725-37.
Gefen, D. and Straub, D. (2005), “A practical guide to factorial validity using PLS-Graph: tutorial
and annotated example”, Communications of the AIS, Vol. 16 No. 25, pp. 91-109.
Gem and Lapidary Wholesalers (2004), Is a trade conference so does not need to be referenced.
Gifford, K. and Bernard, J.C. (2006), “Influencing consumer purchase likelihood of organic food”,
International Journal of Consumer Studies, Vol. 30 No. 2, p. 155.
Goldsmith, J. and Wu, T. (2006), Who Controls the Internet? Illusions of a Borderless World,
Oxford University Press, New York, NY.
APJML Gopal, R., Pathak, B., Tripathi, A.K. and Yin, F. (2006), “From fatwallet to eBay: an investigation
of online deal-forums and sales promotions”, Journal of Retailing, Vol. 82 No. 2, p. 155.
24,3
Ha, H.-Y. (2002), “The effects of consumer risk perception on pre-purchase information in online
auctions: brand, word-of-mouth and customized information”, Journal of
Computer-Mediated Communication, Vol. 8 No. 1.
Hoffman, D., Novak, T. and Peralta, M. (1999), “Building consumer trust online”,
456 Communications of the ACM, Vol. 42, pp. 80-5.
Hong-Youl, H. (2004), “Factors affecting online relationships and impacts”, The Marketing
Review, Vol. 4 No. 2, pp. 189-209.
Hoover, R.J., Green, R.T. and Saegert, J. (1978), “A cross-national study of perceived risk”, Journal
of Marketing, Vol. 42 No. 3, p. 102.
Hughes, R.W. (1997), “The element of quality”, available at: www.ruby-sapphire.com
Hulland, J. (1999), “Use of partial least squares (PLS) in strategic management research: a review
of four recent studies”, Strategic Management Journal, Vol. 20 No. 2, pp. 195-204.
ICA (2001), How to buy a Gem Value Factors: Color, Clarity, Cut and Carat Weight, available at:
www.gemstone.org/gem-tips/ask_01_01-how.html (accessed 10 January, 2003).
Jacoby, J. and Kaplan, L.B. (1972), “The components of perceived risk”, in Venkatesan, M. (Ed.),
Proceedings of the Third Annual Conference of the Association for Consumer Research,
Association for Consumer Research, College Park, MD, pp. 382-93.
Jarvenpaa, S. and Todd, P.A. (1997), “Consumer reactions to electronic shopping on the world
wide web”, International Journal of Electronic Commerce, Vol. I, Winter, pp. 59-88.
Jarvenpaa, S., Tractinsky, N. and Vitale, M. (1999), “Consumer trust in an internet store:
a cross-cultural validation”, JCMC, Vol. 5 No. 2, pp. 1-34.
Jarvenpaa, S., Tractinsky, N. and Vitale, M. (2000), “Consumer trust in an internet store”,
Information Technology and Management, Vol. 1 No. 1, pp. 45-71.
Johnson, D. (2007), “Achieving customer value from electronic channels through identity
commitment, calculative commitment, and trust in technology”, Journal of Interactive
Marketing, Vol. 21 No. 4, pp. 2-21.
Kaplan, L.B., Szybillo, G.J. and Jacoby, J. (1974), “Components of perceived risk in product
purchase: a cross-validation”, Journal of Applied Psychology, Vol. 59, June, pp. 287-91.
Khaoplum, P. (2002) in Tiangsoongnern, L. (Ed.), Colored Gemstone Trading using Internet,
Bangkok.
Kim, D.J., Cho, B. and Raghav Rao, H. (2000), “Effects of consumer lifestyles on purchasing
behavior on the internet: a conceptual framework and empirical validation”, Proceedings of
the 21st International Conference on Information Systems, Association for Information
Systems, Atlanta, GA, pp. 688-95.
Kim, M. and Lennon, S.J. (2000), “Television shopping for apparel in the United States: effects of
perceived amount of information on perceived risks and purchase intentions”, Family and
Consumer Sciences Research Journal, Vol. 28 No. 3, pp. 301-31.
Kim, S. and Montalto, C. (2002), “Perceived risk of privacy invasion and the use of online
technology by consumers”, Consumer Interests Annual, Vol. 48 No. 1, p. 5.
Kimery, K. and McCord, M. (2002), “Third-party assurances: mapping the road to trust in
e-retailing”, Journal of Information Technology Theory and Application, Vol. 4 No. 2,
pp. 63-83.
Ko, E. and Park, Y. (2002), “Antecedents of internet advertising effects: advertisement types and
clothing involvement”, Irish Marketing Review, Vol. 15 No. 2, pp. 51-8.
Koufaris, M. and Hampton-Sosa, W. (2002), Consumer Trust Online: Examining the Role of the Online
Experience with the Web Site, available at: http://cisnet.baruch.cuny.edu/papers/cis/
200205.pdf (accessed December 15, 2006). purchasing
Krausz, T. (2001), “The colors of money”, The Jerusalem Report, available at: www.thaigem.com/ behavior
news_report.asp (accessed January 21, 2005).
Krishnamurthy, S. (Ed.) (2006), Contemporary Research in E-marketing, Idea Group Publishing,
Hershey, PA. 457
Laurent, G. and Kapferer, J.N. (1985), “Measuring consumer involvement profiles”, Journal of
Marketing Research, Vol. 22 No. 1, pp. 41-53.
Lee, H.-J. and Huddleston, P. (2006), “Effects of e-tailer and product type on risk handling in
online shopping”, Journal of Marketing Channels, Vol. 13 No. 3, p. 5.
Liebermann, Y. and Stashevsky, S. (2002), “Perceived risk as barriers to internet and e-commerce
usage”, Qualitative Market Research, Vol. 5 No. 4, p. 291.
Lin, P.-J., Jones, E. and Westwood, S. (2009), “Perceived risk and risk-relievers in online travel
purchase intentions”, Journal of Hospitality Marketing & Management, Vol. 18 No. 8,
pp. 782-810.
Luo, X. (2002), “Trust production and privacy concerns on the internet: a framework based on
relationship marketing and social exchange theory”, Industrial Marketing Management,
Vol. 31, pp. 111-8.
Mai, B., Menon, N.M. and Sarkar, S. (2010), “No free lunch: price premium for privacy
seal-bearing vendors”, Journal of Management Information Systems, Vol. 27 No. 2,
pp. 189-212.
Maruyama, G. (1988), Basics of Structural Equation Modeling, Sage, Washington, DC.
Metzger, M.J. (2004), “Privacy, trust, and disclosure: exploring barriers to electronic commerce”,
Journal of Computer-Mediated Communication, Vol. 9 No. 4, p. 1.
Milne, G. and Culnan, M. (2004), “Strategies for reducing online privacy risks: why consumers read
(or don’t read) online privacy notices”, Journal of Interactive Marketing, Vol. 18 No. 3, pp. 15-29.
Mitchell, V.-W. (1999), “Consumer perceived risk: conceptualisations and models”, European
Journal of Marketing, Vol. 33 Nos 1/2, pp. 163-95.
Miyazaki, A.D. and Fernandez, A. (2000), “Internet privacy and security: an examination of
online retailer disclosures”, Journal of Public Policy & Marketing, Vol. 19, Spring, pp. 54-61.
Miyazaki, A.D. and Fernandez, A. (2001), “Consumer perceptions of privacy and security risks
for online shopping”, The Journal of Consumer Affairs, Vol. 35 No. 1, pp. 27-44.
Morgan, R.M. and Hunt, S.D. (1994), “The commitment-trust theory of relationship marketing”,
Journal of Marketing, Vol. 58, pp. 20-38.
Nöteberg, A., Christiaanse, E. and Wallage, P. (2003), “Consumer trust in electronic channels”,
e-Service Journal, Vol. 2 No. 2, p. 46.
O’Cass, A. and Pecotich, A. (2005), “The dynamics of voter behavior and the influence processes
in electoral markets: a consumer behavior perspective”, Journal of Business Research,
Vol. 58, pp. 406-13.
Otuteye, E. (2002), “Framework for e-business information security management”, available at:
http://e-commerce.mit.edu/papers/ERF/ERF136.pdf (accessed May 24, 2006).
Palmer, J.W., Bailey, J.P. and Faraj, S. (2000), “The role of intermediaries in the development of
trust on the WWW: the use and prominence of trusted third parties and privacy
statements”, Journal of Computer-Mediated Communication, Vol. 5, March, available at:
www.ascusc.org/jcmc/vol5/issue3/palmer.html
APJML Palumbo, F. and Herbig, P. (1998), “International marketing tool: the internet”, Industrial
Management & Data Systems, Vol. 98 No. 6, pp. 253-61.
24,3
Pauline, L., Colleen, M., Greg, S. and Kathryn, P. (2002), “Exploring the association between
perceived risks of smoking and benefits to quitting: who does not see the link?”, Addictive
Behaviors, Vol. 27 No. 2, pp. 293-307.
Pires, G., Stanton, J. and Eckford, A. (2004), “Influences on the perceived risk of purchasing
458 online”, Journal of Consumer Behaviour, Vol. 4 No. 2, pp. 118-32.
Porncharern, P. (2006) in Tiangsoongnern, L. (Ed.), Gemstone Trading using Internet, Bangkok.
Prost, A. (2001), “Retail customers consume the classics”, Colored stone, Vol. 14 Nos 1/2, p. 20.
Prost, A.M. (2005), “In the pink: annual retail survey”, Colored Stone, Vol. 18, January/February,
pp. 30-3.
Quelch, J.A. and Klein, L.R. (1996), “International business and the internet”, Sloan Management
Review, Vol. 37 No. 3, pp. 60-75.
Ranchhod, A. (2001), “Comparing respondents of email and mail surveys: understanding the
implications of technology”, Marketing Intelligence & Planning, Vol. 19 No. 4, pp. 254-62.
Ringle, C.M. and Alexander, W.S. (2005), SmartPLS2.0 (Beta), University of Hamburg, Hamburg,
available at: www.smartpls.de
Rohm, A. and Milne, G. (1998), “Emerging marketing and policy issues in electronic commerce:
attitudes and beliefs of internet users”, paper presented at the Marketing and Public
Policy, Chicago, IL.
Roseman, M. and Kurzynske, J. (2006), “Food safety perceptions and behaviours of Kentucky
consumers”, The Journal of Food Protection, Vol. 69 No. 6, pp. 1412-21.
Rotter, J.B. (1967), “A new scale for the measurement of interpersonal trust”, Journal of
Personality, Vol. 35 No. 4, pp. 651-65.
Samiee, S. (1998), “The internet and international marketing: is there a fit?”, Journal of Interactive
Marketing, Vol. 12 No. 4, pp. 5-21.
Schiffman, L., O’Cass, A., Paladino, A., D’Alessandro, S. and Bednall, D. (2011), Consumer
Behaviour, Pearson Education Australia, Sydney.
Schlosser, A.E., White, T.B. and Lloyd, S.M. (2006), “Converting web site visitors into buyers:
how web site investment increases consumer trusting beliefs and online purchase
intentions”, Journal of Marketing, Vol. 70 No. 2, pp. 133-48.
Schoenbachler, D. and Gordon, G. (2002), “Trust and customer willingness to provide
information in database-driven relationship marketing”, Journal of Interactive Marketing,
Vol. 16 No. 3, pp. 2-16.
Sheth, J.N. (1973), “A model of industrial buyer behaviour”, Journal of Marketing, Vol. 37,
October, pp. 50-6.
Sheth, J.N. and Venkatesan, M. (1968), “Risk prediction processes in repetitive consumer
behavior”, Journal of Marketing Research, Vol. 5, pp. 307-10.
Shim, J., Slyke, C., Jiang, J. and Johnson, R. (2004), “Does trust reduce concern for information
privacy in e-commerce?”, paper presented at the 7th Annual Conference of the Southern
Association for Information Systems, Jacksonville, FL, pp. 227-34.
Shimp, T.A. and Bearden, W.O. (1980), “Warranty and other extrinsic cue interaction effects on
consumers’ confidence”, Advances in Consumer Research, Vol. 7, pp. 308-13.
Shor, M. and Oliver, R.L. (2006), “Price discrimination through online couponing: impact on
likelihood of purchase and profitability”, Journal of Economic Psychology, Vol. 27 No. 3,
p. 423.
Smith, D., Menon, S. and Sivakumar, K. (2005), “Online peer and editorial recommendations, trust Online
and choice in virtual markets”, Journal of Interactive Marketing, Vol. 19 No. 3, pp. 15-36.
purchasing
Srinivasan, N. and Ratchford, B.T. (1991), “An empirical test of a model of external search for
automobiles”, Journal of Consumer Research, Vol. 18, September, pp. 233-42. behavior
Sun, D. (2004), “Pricing strategy and resource management in the digital era”, PhD thesis,
The Pennsylvania State University, Philadelphia, PA.
Swaminathan, V., Lepkowska-White, E. and Rao, B. (1999), “Browsers or buyers in cyberspace? 459
An investigation of factors influencing electronic exchange”, Journal of
Computer-Mediated Communication, Vol. 5, December, available at: www.ascusc.org/
jcmc/vol5/issue2/swaminathan.html
Tan, S.J. (1999), “Strategies for reducing consumer’s risk aversion in internet shopping”, Journal
of Consumer Marketing, Vol. 16 No. 2, pp. 163-80.
Teltzrow, M. and Kobsa, A. (2004), “Impact of user privacy preferences on personalized systems
– a comparative study”, paper presented at the CHI-2003, Fort Lauderdale, FL.
Teo, T. (2001), “Demographic and motivation variables associated with Internet usage
activities”, Internet Research, Vol. 11 No. 2, pp. 125-37.
Tiangsoongnern, L. and Vuori, T. (2004), “The influences of privacy and security practices on
gemstone purchasing online”, paper presented at the International We-B conference 2004
(Working for e-Business), Perth, Western Australia.
Tse, A. (1998), “Comparing the response rate, response speed and response quality of two
methods of sending questionnaires: e-mail vs. mail”, Journal of the Market Research
Society, Vol. 40, October, pp. 353-61.
United Nations (2001), The Electronic Commerce and Development Report 2001, United Nations
Conference on Trade and Development (UNCTAD), Geneva.
United Nations (2005), Information Economy Report 2005, United Nations Conference on Trade
and Development (UNCTAD), Geneva.
Upah, G.D. (1980), “Applying the concept of perceived risk to buying influence in industrial
firms”, Advances in Consumer Research, Vol. 7, pp. 381-6.
van der Heijden, H., Verhagen, T. and Creemers, M. (2003), “Understanding online purchase
intentions: contributions from technology and trust perspectives”, European Journal of
Information Systems, Vol. 12 No. 1, pp. 41-8.
Van Slyke, C., Comunale, C.L. and Belanger, F. (2002), “Gender differences in perceptions of
web-based shopping”, Communications of the ACM, Vol. 45 No. 7, pp. 82-6.
Van Vark, C. (2004), “Your reputation is online”, Revolution, March, p. 42.
Vijayasarathy, L. and Jones, J. (2000), “Print and internet catalogue shopping: assessing attitudes
and intentions”, Internet Research, Vol. 10 No. 3, pp. 191-202.
Wang, S., Beatty, S. and Foxx, W. (2004), “Signalling trustworthiness of small online retailers”,
Journal of Interactive Marketing, Vol. 18 No. 1, pp. 53-69.
Weinburg, D. (2001), “Gems buying guide, the 4c’s and more”, available at: www.multicolour.
com/catalogue/columns/column022001.html
Wind, J. and Mahajan, V. (2001), “Trust and quality signalling issues in electronic markets”,
Digital Marketing: Global Strategies from the World’s Leading Experts, Wiley,
New York, NY.
Wu, B.T.W., Holmes, J.M. and Alexander, J.L. (1984), “Risk taking: its effect on selection of
branded and generic grocery items”, Akron Business & Economic Review, Vol. 15 No. 3,
pp. 12-17.
APJML Yeung, R. and Morris, J. (2006), “An empirical study of the impact of consumer perceived risk on
purchase likelihood: a modelling approach”, International Journal of Consumer Studies,
24,3 Vol. 30 No. 3, pp. 294-305.
Yoon, S.-J. (2002), “The antcedents and consquences of trust in online-purchase decisions”,
Journal of Interactive Marketing, Vol. 16 No. 2, pp. 47-63.
Young, L. and Wilkinson, I. (1989), “The role of trust and co-operation in marketing channels:
460 a preliminary study”, European Journal of Marketing, Vol. 23 No. 2, pp. 109-22.
Yubo, C. (2004), “Independent product information and marketing strategies”, PhD thesis,
University of Florida, Gainesville, FL.
Zborowski, M. (2005), “Gaining confidence”, Coloredstone, Vol. 18 No. 1, pp. 34-7.

Corresponding author
Steven D’Alessandro can be contacted at: steven.dalessandro@mq.edu.au

To purchase reprints of this article please e-mail: reprints@emeraldinsight.com

Or visit our web site for further details: www.emeraldinsight.com/reprints

View publication stats