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

Author

Listed:
  • Amir Heiman

    (Department of Environmental Economics and Management and the Center for Agricultural Economics Research, Robert H. Smith Faculty of Agriculture, Food and Environment, Hebrew University of Jerusalem, Rehovot 7610001, Israel)

  • Lutz Hildebrandt

    (School of Business and Economics, Humboldt University, Berlin D-10099, Germany)

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.

Suggested Citation

  • Amir Heiman & Lutz Hildebrandt, 2018. "Marketing as a Risk Management Mechanism with Applications in Agriculture, Resources, and Food Management," Annual Review of Resource Economics, Annual Reviews, vol. 10(1), pages 253-277, October.
    • Handle: RePEc:anr:reseco:v:10:y:2018:p:253-277
    DOI: 10.1146/annurev-resource-100517-023047
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    Citations

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    Cited by:

    1. Jason Donovan & Pieter Rutsaert & Ciro Domínguez & Meliza Peña, 2022. "Capacities of local maize seed enterprises in Mexico: Implications for seed systems development," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 14(2), pages 509-529, April.
    2. Amir Heiman & Joel Ferguson & David Zilberman, 2020. "Marketing and Technology Adoption and Diffusion," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(1), pages 21-30, March.
    3. Dmitry A. Ruban & Natalia N. Yashalova, 2022. "Corporate Web Positioning as a Strategic Communication Tool in Agriculture," Agriculture, MDPI, vol. 12(8), pages 1-16, July.
    4. Rutsaert, Pieter & Donovan, Jason & Kimenju, Simon, 2021. "Demand-side challenges to increase sales of new maize hybrids in Kenya," Technology in Society, Elsevier, vol. 66(C).

    More about this item

    Keywords

    marketing; risk-reduction; uncertainty; biotechnology; consumers; agricultural products;
    All these keywords.

    JEL classification:

    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • N50 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - General, International, or Comparative

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