Since 1960, perceived risk has been of interest to marketing academics. Their interest in the consumer decision‐making process considerably predates this, but interest in how risk varies during the process has not been so prevalent and many studies have assumed that perceived risk remains constant throughout the buying process. Tests this assumption in a study of 180 breakfast cereal shoppers, half of whom were interviewed prior to purchase and half immediately after. The results showed that risk perceptions and risk‐reducing strategy usefulness did vary between the two states. The differences were not large, but were sufficient to allow rejection of the proposed null hypothesis and to cast doubt on the assumptions made in many studies.

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Analyses the breakfast cereal market as a basis on which to conduct a study of risk in new product development. Argues that the main alternatives for increased consumer demand, namely, product development, converting non‐users and encouraging existing users to use more, have associated risks in the consumer′s mind. The hypothesis that non‐purchases will perceive more risk than purchasers was tested and accepted; financial risks were particularly important. Suggests that a reduction of these risks through changes in the marketing mix might be more cost effective than developing new products to stimulate consumer demand, since breakfast cereal consumers are highly brand loyal with 48 per cent never changing their cereal and 69 per cent saying that they were not really bothered about trying a new cereal. Non‐purchasers were found to consider low price and trial sizes as more useful risk reducers than purchasers. Unfortunately, consumers stated that the most useful ways to reduce risk for a new product was past experience with the brand name. This suggests that only those companies already in the breakfast cereal market stand any chance of developing successful new products.

The idea that risk could be a motivating factor in consumers′ choice of breakfast cereal seemed less than plausible on first consideration. However, reports an investigation of secondary sources, some focus groups and a survey of 180 shoppers which revealed that this initial reaction was unfounded and that risk appeared significant in affecting consumers′ purchasing behaviour. The most important risks were those of taste and nutritional value. The most important risk relievers were choosing a well‐known brand and obtaining free samples. The findings seem to support the high advertising spends characteristic of the market, but question the widespread use of celebrity endorsements.

Despite the importance of demographic variables which affect consumers' behaviour and the 30 years tradition of perceived risk research, the effect which demographic variables have on risk perception and reduction has not been consistently identified. In a survey of 180 purchasers, the effect of three demographic variables; age, gender, and social class, on 1 0 risk statements and 16 risk reducing strategies was measured. Age significantly affected risk perception and reduction; strategies became more useful as age increased. Gender proved to be the most important demographic variable. Nearly all the risks and risk reducing strategies were significantly less important and less useful for the males than females. Social class had a less marked effect than gender, but still produced significant differences although there was no consistent effect. Overall, the differences were significant enough to allow the rejection of the null hypothesis that demographic variables would have no effect on risk perception and reduction.Implications in terms of perceived risk measurement and possible use in segmentation are discussed. IntroductionSome of the most commonly used variables in almost all market research assessing consumer buying patterns are demographic variables. Their importance has also been long established in segmentation studies because of their prime influence on consumer behaviour and their ease of measurement. Given their obvious importance, it seems unusual that their effect on risk perception and reduction has not been fully established. Clearly, demographic factors might greatly influence the measurement of risk perception and reduction and, if this is so, researchers need to be aware of its potential influence before designing their questionnaires and samples. In addition, variations in risk perception and reduction caused by demographic factors could be used in market segmentation to design more tailored and effective risk reducing marketing mixes. A review of the literature provided surprisingly little conclusive evidence for the effects of demographic variables on risk perception and reduction. Accordingly, this study was designed to contribute further evidence for the effects of demographic variables.