Retail

1) Explain how a retailer selling expensive, custom-made jewelry could

reduce the six types of perceived risk.

Functional risk- This is the type of perceived risk that consumer has on a product that he/she is purchasing on its performance. This fear can be reduced by a custom made jewelry by having legitimate certificate for the sale of jewelry and by using a microscope to make the customer be at ease of the jewelry he/she is purchasing by allowing scrutiny. When a customer is buying a diamond ring the retailer may reduce risk by the use of the microscope by allowing him to make sure that he is buying a legitimate ring.

Social risk- It is important for retailers to consider what people would say to their customers after they shop. To reduce negative thinking from customer’s peers, the retailer should make sure that he has jewelry that is the trend and that people love to have. The retailer ought to perform lots of marketing research and find the new trends of jewelry to avoid returns due to friends’ opinions. By comprehending customers lifestyles and the community the retailer may even go further to help the customer by giving him advice on the customization that would bring an outstanding outcome.

Financial risk- Customers will avoid buying expensive jewelry because they can’t afford it and the retailer of a custom made jewelry store is supposed to have layaways to reduce this risk. Layaway would help the consumer pay off the jewelry in his/her own pace and customers do not feel burdened or obligated thus it increase their confidence on finishing the payment. To reduce this risk further it is good if there are discounts that would be offered by the store to encourage the customers to know that they are saving money.

Physical risk- This refers on whether the jewelry that the retailer is selling may harm the customer. This is crucial for most jewelry retailers and by selling expensive jewelry the retailer should make sure that his jewelry is...