Marketing Management : Strategic And Operational Risks

727 WordsApr 28, 20173 Pages
Marketing management consists in distributing resources in order to produce net present value to shareholders among an environment of market-product investment involving risks. A. Rappaport, 1981). As a result, a marketing strategy is defined as the method on how the organization’s resources are put at risk seeking to get competitive advantages (V. Cook, 1983). Marketing risks are present in all the aspects of the marketing plan. We can identify five main areas of risks listed below: - Strategic risks related to the strategic decisions taken - Operational risks linked to plan’s implementation - Financial risks such as uncertainty over investments, currency fluctuation… - Pure risks like force majeure such as climatic and wars They can be…show more content…
- Regulations either national or international that would modify the market patterns. We can further include additional more elaborated marketing risks occurring in market development. The origins of marketing risks hold in modification if primary market demand and market share. Primary demand risks are closely linked to the size of market segments and the cyclical nature of each segments. Market share risks derives from building, harvesting and balancing decisions coming from the organization’s objective, policy and search for differential advantages (V. Cook, 1987) As a result, we identify the two types of risks together with their subdivisions: 1) Primary demand risks - Segment size weight with different weights on segments according to their importance. - Product life cycle stage affected through the magnitude of attraction of a market segment according it attractiveness by competitors. That’s why a growing stage of a market is riskier than a mature one because it attracts competitors and brings volatility. Variations in rates and product demand are synonym of bigger risks. On the opposite, a mature or declining market is less unsure due to the future demand in less uncertain. 2) Market share risks First of all, the market share expectations is conditioned by the company’s pricing and marketing strategy. We can find three main strategies on the subject leading to
Open Document