Perception of Risk
We are leaping in 21st century and market is significantly growing into more competitive and innovative with products; both online and offline. Our consumers have more purchasing options than before. Products and as well services supply has been innovative in nature. Innovation is also a calculated experiment to the contemporary societal needs. And, an experiment has extreme possibilities of either failing or succeeding in addressing the growing needs. In between supplying the innovative products in an innovative environment, there is a risk factors associated from both supplier and consumer side. (Adner, April, 2006)
Few years back I purchased an emergency light at Rs. 365 from a shop at Chapagaun, Lalitpur. Before purchasing, I checked whether it works or not. It was working fine then. He also mentioned that, he is also the user of the product and expressed his satisfaction while using. Another day, I had reached to the school where I used to teach then, as a Teach for Nepal Fellow. It is far from the shop that I purchased. I bought that because it was very light in weight, small in size and was cheap that other emergency light. But, the product didn’t have any guarantee and warranty scheme. Another, day it stopped working and had problem with charging. As a customer, I was disappointed with the whole experience because my money was wasted and after that I never went to that shop again. The retailer had to lose its customer.
From above example, it shows that the product didn’t have a quality; retailer talk never walked its talk, which resulted in losing its customer. After that experience, I am very concerned about the financial risk and functional before purchasing any product.
Consumer Perception of risk in business is a state of mind where a consumer doubt about the product, get confused to decide on purchasing and fear about the risk involved after purchasing a product. Perception of risk can be of different types depending on the variety of product. (Lake, 2016)
Below I will discuss about different kind of risk and as well the techniques to reduce those:-
- Health risk: Customers who are fond of different taste and like to try different food items in different places often have this perception of risk. To reduce this, markets should maintain clean and tidy space, kitchen workers should be dressed in a neat and standard uniform abide by company policy, should firmly implement hand washing culture regularly, and the kitchen should be made visible to customers.
- Financial risk: Costumers who are willing to purchase electronic, automobile, and garments products are mostly worried if it is worth to spend on the product or not. In addressing this risk, markets should implement partial payment policies, offer guarantee, warranty and exchange schemes, cultivate to make a trusted brand by strong internal marketing strategies, and communicating about the brand in established news portals, online Medias, partnering with renowned personalities of the relevant field as a brand ambassador.
- Time risk: Customers who are interested to learn new skills and knowledge, and are also looking ways to entertain themselves have high concern on utilizing the time properly. The services can include different thematic workshops; pursue an academic degree, looking for an indoor or outdoor entertainment activities etc. As a marketer, it’s critical to add value to our customers till the time they are in the process of receiving the service. To reduce the risk, market should plan the service time period purposefully, build a strong relationship, implement receiving and executing feedbacks system, get certified from relevant trusted institutions, or brands and communicating the customers experience via program reviews, customer blogs, video interviews both locally and globally.
In general, marketing the product value and strategically reducing the risk by understanding our customer’s habits, needs, choices and addressing their risk factors; is an art for a dynamic society. The fundamental key in reducing risk perspective is to deeply understand our customers and generate contextualized techniques.
Adner, R. (April, 2006). Match Your Innovation Strategy to Your Innovation Ecosystem. Harvard Business Review , 1.
Lake, L. (2016, September 24). The Balance . What is Perceived Risk and How Can We Overcome it with Our Messaging?, 1-2. Retrieved from https://www.thebalance.com/learn-how-to-market-a-service-effectively-2296133