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

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The Hebrew University of Jerusalem

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

Citation:

Heiman, A. ; Hildebrandt, L. . Marketing As A Risk Management Mechanism With Applications In Agriculture, Resources, And Food Management. Annual Review of Resource Economics 2018, 10, 253 - 277.

Date Published:

2018

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.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.

Notes:

doi: 10.1146/annurev-resource-100517-023047

Publisher's Version

Last updated on 07/11/2019