Perceived risk is a function of the individual, the product, and the situation. It varies from one consumer to another and for the same consumer from one product to another and one situation to another.
The major types of risks that consumers perceive when making product decision include:
1. Functional risk
2. Physical risk
3. Financial risk
4. Social risk
5. Psychological risk
6. Time risk
Before discuss this case I consider some information about Square company and their new line of Edible oil, priced at taka 65 per litre. Usually products are taka 55 per litre:
First of all, Square today is more than just an organization, it is an institute. In a career spanning across four and a half decades it has pioneered the development of the local business in fields as diverse as Pharmaceuticals, Toiletries, Garments, Textile, Information technology, Health Products, Food Products, Hospitals etc. With an average turnover $ 200 million and a workforce of about 3500 the Square group is a true icon of the Bangladesh business sector. Square is a well known brand .It’s brand image to the customer is very high. For new oil, mainly customer buys the Square not the oil. It is highly considerable for a customer paying 10 taka more, when he or she buys the square oil. In our market Square means:
2. Better goods and service than others.
3. Well societal company.
4. And Square is a local company.
As a customer, customer’s think about my product is:
1. High price
2. The quality of Rupchanda and Teer Company’s product is good.
3. And customers buy these companies’s oil at 55 taka per litre.
4. It is a good brand but in market I have another good brand like Teer, Rupchanda.
5. I want something special because of paying 10 taka more. 6. Is it available in my area?
7. The quality of this product is constant or not?
8. Teer and Rupchanda is more experience than Square in this sector.
The concept of perceived risk has major implications for the introduction of new products. Because high-risk perceivers are less likely to purchase new or innovative products than low-risk perceivers. The consumers perceived about the Square oil:
1. Functional risk: Can the Square oil fulfill our family oil need? 2. Physical risk: Is it really good for our health?
3. Financial risk: Why I pay 10 taka more for Square oil?
4. Social risk: Will other customer buy the Square product? 5. Psychological risk: Will I be embarrassed when I invite friends for lunch which is cook by the Square oil? 6. Time risk: Will I have to go through the shopping effort all over again?
Now I reduce these perceived risks by these ways:
1. Brand identity: as a marketer, first I build the brand image in the customers mind. Square is a good running brand. Square product is quality full. So it is easy to give the brand identity about Square oil in the customer mind. We always try to tech the customer that it is a Square product under the umbrella marketing.
2. Distribution through reputable retail outlets: we can choose the Meena bazer, Agora, P&G, ETC, Shop & Save for selling our new edible oil. Customer think meena bazer sell this product! This oil should be quality oil.
3. Informative advertising: by informative advertising we can build the primary demand for our new oil. We can advertise our oil is made from good oil material and we also add vitamin A, D, E which is helpful for good health. We can say, “We measure quality not the price”.
4. Publicity stories in the media: We can arrange a press conference and describe the...