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Vincent-Wayne Mitchell: Manchester School of Management, UMIST, Manchester, UK
Introduction
In 1960, when Bauer first brought the concept of risk to the attention of the American marketing community he stated that:"
I have neither confidence nor anxiety that my proposal will cause any major stir. At most, it is to be hoped that it will attract the attention of a few researchers and practitioners and at least survive through infancy (Bauer, 1960, p. 389)."
More than 30 years later, the perceived risk concept has come through infancy to adulthood and has established a tradition of research unparalleled in consumer behaviour research. Perceived risk continues to receive attention from both practitioners (Farquhar, 1994) and academics (Grewal et al., 1994) and has been applied in a wide range of areas including intercultural comparisons (Alden et al., 1994), food technology (Frewer et al., 1994), dental services (Coleman et al., 1994), banking (Ho and Victor, 1994) and apparel catalogue shopping (Jasper and Ouellette, 1994). So, why do marketing practitioners and researchers continue to be interested? First, perceived risk theory has intuitive appeal and plays a role in facilitating marketers seeing the world through their customer's eyes. Second, it can be almost universally applied and its versatility has been demonstrated in a wide range of applications, from spaghetti (Cunningham, 1967) to industrial reprographic equipment (Newall, 1977). Third, it is suggested that perceived risk is more powerful at explaining consumers' behaviour since consumers are more often motivated to avoid mistakes than to maximise utility in purchasing. Fourth, risk analysis can be used in marketing resource allocation decisions. For example, a study of risk relievers used by consumers can help to increase marketing efficiency by channelling resources into strategies which consumers find more useful, while withdrawing them from those which they find less useful. Risk perception analysis can also be helpful in brand-image development, targeting, positioning and segmentation; e.g. by highlighting risk aspects in comparative advertising; repositioning commodity products to give added value, and segmenting consumers as on the basis of their risk-reducing strategy usage. Finally, examining risk perceptions can generate new product ideas. In a recent study of breakfast cereals, one of the risks consumers perceived was a result of disliking milk. This suggested the development of non-milk-based breakfast products such...