perceived risk & zone of tolerance

1. Perceived Risk & Zone of
Tolerance
Reshma Ramesh
Rajadhani Business School

2. Perceived Risk
Perceived risk is a set of uncertainties
that consumers have in their minds while
purchasing a product regarding the
outcome of the product usage.

3. Types of Perceived Risks
• Functional Risk
• Social Risk
• Financial Risk
• Physical Risk
• Time Risk
• Psychological Risk

4. Functional risk
• One of the most common
types of perceived risk,
functional or quality risk
refers to the fear that a
product or service will fail
to deliver promised function
Social risk
• Social risk refers to the
possibility that buying a
product or using a service
can reduce a person’s status
with friends, family or
neighbours.

5. Financial Risk
• Financial risk comes when
consumer has fear that
purchasing the product can
tax his monetary resources.
Physical Risk
• Physical risk refers to the
perceived potential for a
purchase to cause bodily
harm to a person or loved
one.

6. Time Risk
• Time risk is related to the
fear of time lost when a
product is needed for
replacement or not fulfilling
promised functions
Psychological Risk
• Consumers also face
questions about whether a
given purchase is the
morally right choice.

7. Zone of Tolerance
The zone of tolerance is defined as the range of
customer perception of a service between
desired and minimum acceptable standards.