How Consumers handle perceived risks- Consumer Behavior

Dr Catherine Ngahu responds to the question on how consumers handle perceived risk when making a buying decisions. This is an interesting question that marketers and business owners pay great attention to. In this video, Catherine talks about the 7 strategies that consumers use to manage risk, in the buying process.

Understanding customers’ risk handling strategies, is important for:
Marketers - to help developing effective marketing strategies
Sales people - to improve selling skills
Consumers - to see how others how others handle the risks they encounter during the buying process and learn from it.
Students of Consumer behavior

Perceived risk in the buying decision process comes from the uncertainty that consumers face when they are not sure of the outcome of their purchase decision. As consumers we are sometimes faced with the need to buy something unfamiliar, where we are not so sure of the attributes to consider in making a choice.

Some examples include first time buying or buying a new item such as new phone, a camera, a motor bike, a car, or bank account or mortgage? Or even a holiday? Or air ticket?

The main customer concerns have to do to with performance, value for money, risks of harm and social embarrassment. This is what drives customers to revert to various strategies to mitigate risks in the buying decision process. The role of the marketer, or sales person is to provide information that answers the questions, that a customer is likely to be asking, and to communicate in a clear and credible manner.
Some content Is referenced from Schifman and Kanuk, consumer behavior book
Dr Catherine Ngahu
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