Question

1. Explain in detail how a retailer selling expensive furniture could reduce the 6 types of perceived risks? (Functional, Physical, Financial, Social, Psychological, Time)

Note:

If you are not sure how to fulfill the requirements needed, please do not attempt the question.

Your help is very much appreciated. Thank you.

Answer 1

Functional - Risk arising out of the thought that product won't perform as per expectation. He may keep or share a demo of one of their old furniture which is yet performing at the best of its potential even after it's aging.

Physical - the risk arising at the thought of a product causing physical or health ailment. These risks may be reverted by getting ones products certified by top healthcare organisations.

Financial - the risk arising at the thought of the product being comparatively less in value than it's MRP. To deal with such risk one must be able to showcase comparative products from other sellers and broadcast that their product offering is comparatively better at the same marked price.

Social - the risk due to social embarrassment. A seller should target it's audience keeping in mind their social and cultural backgrounds.

Psychological - the risk due to psychological effects. The seller should follow similar measure as social risk. Using better audience targeting and research mechanisms to perfectly target products which won't affect psychological well being of an individual.

Time - this is perhaps the most eminent yet mistaken perceived risk. To avoid such risk, one should perform high frequency testing and satisfactory validations before launching their product. These results should be showcased to the customers to give them additional satisfaction. In additional once may assure of additional warranty and product coverage incase of unexpected results.