Marketing as a Risk Management Mechanism with Applications in Agriculture, Resources, and Food Management

Amir Heiman, Lutz Hildebrandt

Research output: Contribution to journalArticlepeer-review

10 Scopus citations

Abstract

Marketing tools, in addition to their role in persuasion and serving as a bridge between production and consumers, reduce prepurchase risks. This role has received less attention in the literature. This review highlights marketing's role in reducing consumers' purchasing risk. We present our approach, backed up with extensive literature review, beginning with a description of advertising, branding, and pricing that may serve as a signal of a product's quality. We then describe and analyze the role of product demonstrations, free product samples, and money-back guarantees (MBGs), which enable consumers to acquire direct experience before a final decision is made, in reducing risks. We briefly discuss product warranties and their relationship to MBGs. We demonstrate how marketing tools can help reduce the risk associated with the consumption of food products that contain genetically modified organisms, as well as help in marketing of agricultural products that vary in their levels of risk to buyers.

Original languageAmerican English
Pages (from-to)253-277
Number of pages25
JournalAnnual Review of Resource Economics
Volume10
DOIs
StatePublished - 5 Oct 2018

Bibliographical note

Publisher Copyright:
© Copyright 2018 by Annual Reviews. All rights reserved.

Keywords

  • Agricultural products
  • Biotechnology
  • Consumers
  • Marketing
  • Risk-reduction
  • Uncertainty

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