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Unit 5: Consumer Perception

Product category is also an element in the perception of risk. Consumers are more likely to Notes
perceive risk in the selection of high-involvement product categories. Keith B. Murray and John
L Schlacter have reported that consumers perceive more risk in deciding about services than
products, especially in terms of social risk, physical risk and psychological risk.
The shopping situation that the consumer faces also contributes to perception of risk, such as
shopping by telephone or mail, buying from door-to-door salesperson, direct mail, or Internet
shopping. Except in the case of door-to-door salesperson, the consumer is in no position to
personally inspect the products before placing the order or, in some situations, it is difficult to
be certain that the product would really be delivered in time as promised by the marketer.

How Consumers Deal with Risk?

Consumers use various strategies to deal with perceived risk. This helps them to act with more
confidence in making purchase decisions. The strategies are designed either to increase certainty
associated with product purchase or to minimise negative purchase consequences. Some of the
strategies that consumers adopt to deal with risk are:
1. Consumers acquire additional information. This allows them to better assess the risk.
2. Consumers remain brand loyal. They stay loyal to a brand which has delivered satisfaction
instead of buying an untried brand.
3. Consumers buy most popular brand because they usually believe that well-known and
popular brands can be trusted.

4. Consumers buy the most expensive model or brand as they often associate price with
quality.
5. Consumers rely on store image. They trust reputable retail outlets and depend on them
regarding their choice of merchandise for resale.
6. Consumers seek money-back guarantees, warranties and pre-purchase trial. For example
a marketer offers free trial and “no questions asked” refund of money, or there are
guarantees/warranties.
7. Buy the smallest pack size, or lowest-priced item. In an attempt to reduce the consequences,
consumers buy the smallest size or the lowest priced item.
8. Reduce level of expectations to reduce psychological consequences before making the
purchase.

Consumers’ risk perception has some important implications for marketers. Risk avoiders are
less likely to purchase new or innovative products compared to risk takers. Advertising should
not only be informative, it must attempt to build brand image and be persuasive to develop
brand loyalty among consumers. Guarantees, warranties, impartial test results, free samples
and pre-purchase trials can also help consumers to minimise risk.

Task Make a note of 5 products and 5 services that you have never bought. If you were
to buy them, on what parameters would you judge their quality?

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