Perceived Risk

Risk perception is based on customers’ judgments of the likelihood of negative outcomes (uncertainty), and of the degree of importance of these outcomes to the individual consumer. It is the perception that there is a chance the service may not live upto, or produce, what is expected.

There are several type of risk, as listed below:
Functional risk is concerned about the performance outcomes. For examples:
o how can I be sure they will service my car correctly?
o Will the visa card be accepted wherever I go; here or overseas?
o Will the dry cleaner be able to remove the strains from this skirt?

Financial risk is concerned about monetary loss, unexpected cost. For examples:
o ...