Kunwar Atul Singh
Institute of Management Studies (FMS), BHU
MBA III Sem.
Any time customers consider purchasing a new
product or service, they face a set of uncertainties
about the product or service collectively referred to as
The level of uncertainty of a consumer, depending
upon whether the purchase he/she making will be
worth it or not
Perceived risk is the uncertainty a consumer has when
buying items, mostly those that are expensive, e.g. car,
house etc. Every time a consumer considers buying a
product, he or she has certain doubts about the
product, especially if the product in question is highly
Functional or Quality Risks
It refers to the fear that a product or service will
fail to deliver promised services or benefits.
Perceived risks can include the fear and or doubt
a consumer has that the product they are buying
will fail to perform intended function.
Risk pertains to a consumer’s social status.
Person of a high or wealthy social class, they
want to buy products that their friends would also
Every consumer is afraid that a purchase might
strip them of their income sources at that time or
in the future.
An item that could cause bodily harm to a person
or their family causes perceived risk.
If a product breaks or fails a few days after
purchase and need replacement, this is time
Consumers also face questions about whether a
given purchase is the morally right choice.
IDENTIFYING A PERCEIVED RISK
Security / Warranty
Hidden Extra Cost
Reputation / Brand
Security / Warranty
The period of warranty / security will determine
how uncertain the buyer will be.
The warranty makes them more trusting because
they know if the product breaks down, they get a
Security provide assurance against potential
The warranty / security should cover a long
duration to boost the buyer’s confidence in the
Hidden Extra Costs
If there is a hidden costs to the selling price, there is a
cause for alarm.
Reputation / Brand Name
Each and every consumer wants to get the best
available product in the market