In the time of making buying decision, consumer has perception of risk that invariably deters them to carry out the purchasing activity. This circumstance majorly prevails as consumer face uncertainty and potentially undesirable consequences of quality, durability, time saving or not, influences of product on users, how long beneficial as result of purchase. Perceived risk is one of the important aspects of consumer behaviour thus; marketers and the company must deal with such risks diligently to prospect the business activity.
The perceived risks that continuously hinder the consumer buying process are physical risk, functional risk, time risk, psychological risk, social risk and financial risk (Kotler & Keller, 2016). First, talking about the physical risk, it is all about whether the product possesses any physical danger to the consumer or not. For instance, the popularly unpopular Galaxy Note 7 that exploded and Samsung had to discontinue that product. Now, the consumers’ feel threatened whether to buy for new version or not. Second, the functional risk, it is all about the experience and the features that the consumer gets when purchasing a particular product. For instance, if I purchase a latest Samsung QLED TV then I should be able to get that type of experience and the functionality for what I have paid. Third, the time risk, its all about wills I be able to get that product on time or is the product outdated. For instance, if I order a MacBook Pro and till the time they have delivered they come up with another new MacBook then it would be a waste of my money. Fourth, psychological risk, it is all about the things that we constantly think about regarding a certain product. For instance, I have been a Honda rider for almost 4 years and once I made a mistake of purchasing a Yamaha and the experience that I got from that bike was unbearable. Fifth, the social risk, the risk that we get when the product we use becomes an embarrassment in our surroundings. For instance, in my friend circle they hold branded watch and I own a normal one then I will definitely feel low and embarrassed. Last, financial risk, this is based completely on the price. For instance, if I am going to buy a new bike then I would not go for Bajaj Dominar 400 because of high repair and maintenance cost plus the high price of spare parts.
A great technique to reduce customers risk perception and related fears is ensuring transparency. This is important as to have the faith and trust build in the customer towards the brand or product. For instance; the product of apple has been able to grab the customer loyalty and has lived up to the customer expectation that makes them have the superior power ignoring the bargaining power of the customer. Their user would not like to switch to the other android phones as they are satisfied with the product and have the highest value gained.
Providing guarantee and warranty offer is one way to negate perceived risk as this ensures the credibility of the company and its offered products or services (Huges & Fill, 2012). This would provide a sense of security for consumers while making purchase decision and obliges company to take full responsibility in case something goes wrong with the product.
Many brands these days come up with their brand ambassador from movie actors, or say famous personalities. People are prone to follow their favourite character, actors, or personality. The researched shows that there are the stronger effects to high technology-oriented products when there is high congruency of the celebrity endorser (Biswas, Biswas & Das, 2006).
To sum up, most of the consumer are confused and are in fear of risk as it is their money that they are investing in different products. I believe that marketers need to help the consumers to pick the product through numerous techniques which can benefit the consumer which will help the marketers to retain those consumers for a long term.
References
Biswas, D., Biswas, A., & Das, N. (2006). The differential effects of celebrity and expert endorsements on consumer risk perceptions. The role of consumer knowledge, perceived congruency, and product technology orientation. Journal of Advertising, 35 (2), 17-31.
Huges, G., & Fill, C. (2012). CIM Coursebook: Marketing communication . Burlington, MA: Routledge.
Kotler, P., & Keller, K. L. (2016). Marketing Management. Boston: Pearson.
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In the time of making buying decision, consumer has perception of risk that invariably deters them to carry out the purchasing activity. This circumstance majorly prevails as consumer face uncertainty and potentially undesirable consequences of quality, durability, time saving or not, influences of product on users, how long beneficial as result of purchase. Perceived risk is one of the important aspects of consumer behaviour thus; marketers and the company must deal with such risks diligently to prospect the business activity.
The perceived risks that continuously hinder the consumer buying process are physical risk, functional risk, time risk, psychological risk, social risk and financial risk (Kotler & Keller, 2016). First, talking about the physical risk, it is all about whether the product possesses any physical danger to the consumer or not. For instance, the popularly unpopular Galaxy Note 7 that exploded and Samsung had to discontinue that product. Now, the consumers’ feel threatened whether to buy for new version or not. Second, the functional risk, it is all about the experience and the features that the consumer gets when purchasing a particular product. For instance, if I purchase a latest Samsung QLED TV then I should be able to get that type of experience and the functionality for what I have paid. Third, the time risk, its all about wills I be able to get that product on time or is the product outdated. For instance, if I order a MacBook Pro and till the time they have delivered they come up with another new MacBook then it would be a waste of my money. Fourth, psychological risk, it is all about the things that we constantly think about regarding a certain product. For instance, I have been a Honda rider for almost 4 years and once I made a mistake of purchasing a Yamaha and the experience that I got from that bike was unbearable. Fifth, the social risk, the risk that we get when the product we use becomes an embarrassment in our surroundings. For instance, in my friend circle they hold branded watch and I own a normal one then I will definitely feel low and embarrassed. Last, financial risk, this is based completely on the price. For instance, if I am going to buy a new bike then I would not go for Bajaj Dominar 400 because of high repair and maintenance cost plus the high price of spare parts.
A great technique to reduce customers risk perception and related fears is ensuring transparency. This is important as to have the faith and trust build in the customer towards the brand or product. For instance; the product of apple has been able to grab the customer loyalty and has lived up to the customer expectation that makes them have the superior power ignoring the bargaining power of the customer. Their user would not like to switch to the other android phones as they are satisfied with the product and have the highest value gained.
Providing guarantee and warranty offer is one way to negate perceived risk as this ensures the credibility of the company and its offered products or services (Huges & Fill, 2012). This would provide a sense of security for consumers while making purchase decision and obliges company to take full responsibility in case something goes wrong with the product.
Many brands these days come up with their brand ambassador from movie actors, or say famous personalities. People are prone to follow their favourite character, actors, or personality. The researched shows that there are the stronger effects to high technology-oriented products when there is high congruency of the celebrity endorser (Biswas, Biswas & Das, 2006).
To sum up, most of the consumer are confused and are in fear of risk as it is their money that they are investing in different products. I believe that marketers need to help the consumers to pick the product through numerous techniques which can benefit the consumer which will help the marketers to retain those consumers for a long term.
References
Biswas, D., Biswas, A., & Das, N. (2006). The differential effects of celebrity and expert endorsements on consumer risk perceptions. The role of consumer knowledge, perceived congruency, and product technology orientation. Journal of Advertising, 35 (2), 17-31.
Huges, G., & Fill, C. (2012). CIM Coursebook: Marketing communication . Burlington, MA: Routledge.
Kotler, P., & Keller, K. L. (2016). Marketing Management. Boston: Pearson.