Consumer behavior: risks of making a purchase

More often than not, people buy what they think they should have. Theyre sort of like sheep, following the ock. Do most people really need a four-wheel-drive vehicle? (No.) If they did, why didnt they become popular years ago? (Not fashionable.)

The main reason for this kind of behavior is insecurity, a subject about which many scientists have written extensively. If youve been around a long time, people trust you more and feel secure in their purchase. This is why heritage is a good differentiator.

Minds are insecure for many reasons. One reason is perceived risk in doing something as basic as making a purchase. Behavioral scientists say there are ve forms of perceived risk:

1. Monetary risk. (Theres a chance I could lose money on this.)
2. Functional risk. (Maybe it wont work, nor do what its supposed to do.)
3. Physical risk. (It looks a little dangerous. I could get hurt.)
4. Social risk. (I wonder what my friends will think if I buy this.)
5. Psychological risk. (I might feel guilty or irresponsible if I buy this.)

All this explains why people tend to love underdogs but buy from the perceived leaders. If everyone else is buying it, I should be buying it.

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