FACTORS THAT AFFECT RISK Consumer Behaviour

(a) Characteristics of the purchase problem

  • Size of the expenditure (rupees)
  • Degree of novelty contained in buying
  • Degree of product essentiality
  • Factors provoking purchase

(b) Characteristics of the buyer (general and specific)
Buyer’s self-confidence and experience, degree of technical and professional affiliation.
(c) Organizational environment

  • Size and financial standing of customer
  • Degree of decision centralization
  • Degree of decision reutilisation

(d) Management of perceived risk: There are two types of risks involved:

  1. Performance risk: When the products fail to perform. A rolling machine not able to perform on the specified thickness of metals. A life pump not performing up to expectations. An aerosol spray not fuctioning satisfactorily.
  2. Psychological risk: This risk arises when a person is held responsible and accountable for the decision taken by him. Performance and Psychological risk are associated with the wrong choice.

Management of perceived risk

This leads to four types of risks as shown in Fig. These risks can be reduced by purchasing from familiar suppliers. Risk can also be reduced by placing orders on high credibility suppliers in new buying situations. It is necessary that industrial marketers must understand the perceived risk, and methods to minimize them. This is necessary to formulate effective sales strategies.


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Consumer Behaviour Topics