(image borrowed from internet thanks to owner)
Perception: the process by which people translate sensory impressions into a coherent and unified view of the world around them.
Consumer: An end user who buy a product and use it actually.
Risk: It is an uncertainty which is associated with each
product.
Consumer Risk Perception: whenever consumer make decisions
to purchase any new product there is an element of uncertainty about the
consequences and a perception of risk is involved in most such purchases. Risk
perceptions can be defined as “the consumers” perceptions of uncertainty that
they face when they are unable to foresee various consequences of their
purchase decisions’. The relevant risk dimensions are the uncertainty and the
consequences. It is worth nothing that the influence of risk depends on individual’s
perception. This means that the risk actually may or may not exist and even if
a real risk exist and even if a real risk exists but is not perceived, it will
not influence consumer behavior.
Several Situations may influence the consumer’s perception
of uncertainty or consequences. For example, there may be uncertainty regarding
buying goals, uncertainty about alternatives, or uncertainty about perceived
possible undesirable consequences.
Consumers may face several different type of risks in making
purchase decisions.
Financial or monetary risk is the risk that the product will
not be worth of its cost. Expensive products and services are most subject to
this risk.
Performance risk, which is associated with the possibility that
the product will not perform as anticipated or may even fail that consumer
wastes time in getting it repaired, or replaced. The risk is greatest when the
product is technically complex.
Example and expensive computer.
Physical risk refers to bodily harm to self and others due
to product usage. For example, food and beverage, electrical or mechanical
appliances, or medical services etc. can sometimes prove risky. When cooking
gas (LPG) was first introduced in India, consumers physical risk perception
about it was high. Similarly some consumers consider the use of pressure cooker
as risky.
Social risk, which means that a poor product purchase may
not meet the standards of an importance reference group and may result in
social embarrassment.
Psychological risk relates to loss of self-esteem or self-image
as a result of poor choice and making her/him feel stupid.
Example: High-involvement category products or services.
The degree of risk perception among consumers varies and
depends upon the person, product situation and the culture. Some consumers who
are high-risk perceives or risk avoids, limit their product choices to a
limited number of safe alternatives to avoid risking a poor selection. More
often than not, they stay brand loyal to avoid risk.
Consumers who are low risk perceives or risk takers tend to
consider their choices from a wider range of available product alternatives. They
prepared to risk poor selection instead of not considering several alternatives
from which they can make a selection. They are more likely to buy new products
before they are well new products before they are well established. Risk takers
are often higher-income consumers, having upward social mobility and show
personality traits such as need for achievement. Dominance and change. Help taken from book
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