risk reduction theory

Theory of consumer behavior that purchase choices are made in order to minimize the perceived risks associated with a wrong choice. Products such as deodorants, hair colors, and baby foods have a high perceived risk and consumers usually choose established national brands. There is less perceived risk with products such as paper towels or napkins and consumers tend to switch brands in response to price promotions or choose lower priced private label brands more readily. Purchase of a product innovation in the place of a familiar product contains a greater element of perceived risk and requires a greater degree of persuasion on the part of the seller. The most persuasive argument for an innovation is that significant benefits will be missed if the product is not purchased. The consumer will seek more information about a high-risk product than a low-risk product in order to minimize the risk of a wrong choice. See also informed choice.