Consumers make decision by moving through various problem-solving activities in search of the best information that will help them make the decision. The level of perceived risk refers to the negative consequences that consumers believe will result from a particular course of action. There are several types of risk:
- Financial: the risk associated with the cost
- Social risk: the risk associated with how others will view the purchase
- Performance risk: the risk associated with the likelihood that the product performs as expected
- Physical risk: the risk associated with the safety of the product
- Time risk: the risk associated with the time required to search for the product and the time needed for the product to be maintained.