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© 2009 South-Western, Cengage LearningMARKETINGMARKETING
1
Chapter 19
MANAGING RISKSMANAGING RISKS
19-1 Assessing Business Risks
19-2 Identifying Marketing Risks
19-3 Managing Marketing Risks
CHAPTER
19
© 2009 South-Western, Cengage LearningMARKETINGMARKETINGChapter 19
2
Focus Questions:What service is being
offered by Zurich in this advertisement?
How do insurance providers help businesses manage risk?
As this ad indicates, Zurich can help businesses identify hidden risks. Why are insurance companies better at finding hidden risks?
©Z
UR
ICH
© 2009 South-Western, Cengage LearningMARKETINGMARKETINGChapter 19
3
ASSESSINGBUSINESS RISKS
GOALSGOALSExplain why businesses take risks and
how they are classified.Describe the four ways available for
businesses to deal with risks.
19-1
© 2009 South-Western, Cengage LearningMARKETINGMARKETINGChapter 19
4
The Nature of Business Risk
The possibility that a loss can occur as the result of a decision or activity is known as risk.
© 2009 South-Western, Cengage LearningMARKETINGMARKETINGChapter 19
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Classification of Risk
Source of the riskResult of the riskControl of the riskInsurability of the risk
© 2009 South-Western, Cengage LearningMARKETINGMARKETINGChapter 19
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Source of the Risk
Natural riskHuman riskEconomic risk
© 2009 South-Western, Cengage LearningMARKETINGMARKETINGChapter 19
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Result of the Risk
Pure riskSpeculative risk
© 2009 South-Western, Cengage LearningMARKETINGMARKETINGChapter 19
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Control of the Risk
Controllable riskUncontrollable risk
© 2009 South-Western, Cengage LearningMARKETINGMARKETINGChapter 19
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Insurability of the Risk
Insurable riskNoninsurable risk
© 2009 South-Western, Cengage LearningMARKETINGMARKETINGChapter 19
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Dealing with Risk
Management Strategy Result
Avoid the risk Business chooses a different strategy that doesn’t involve that risk
Transfer the risk Business lets another business complete the risky activity
Insure the risk Business pays insurer to reimburse the amount of losses from the risk
Assume the risk Business proceeds with the decisions made and takes full responsibility for the results
© 2009 South-Western, Cengage LearningMARKETINGMARKETINGChapter 19
11
IDENTIFYINGMARKETING RISKS
GOALSGOALSExplain how changes in the economic
and competitive environment create marketing risks.
Describe marketing risks associated with each of the marketing mix elements.
19-2
© 2009 South-Western, Cengage LearningMARKETINGMARKETINGChapter 19
12
The Risk of Change
Risk managementEconomyLaws and regulationsCompetitionCustomer needs
© 2009 South-Western, Cengage LearningMARKETINGMARKETINGChapter 19
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Risks to Elements of the Marketing Mix
ProductDistributionPricePromotion
© 2009 South-Western, Cengage LearningMARKETINGMARKETINGChapter 19
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MANAGINGMARKETING RISKS
GOALSGOALSExplain how the various sections of the
marketing plan should be used to avoid risks and limit the business’s exposure to risks.
Describe other ways to eliminate or control marketing-related risks.
19-3
© 2009 South-Western, Cengage LearningMARKETINGMARKETINGChapter 19
15
Handling Risks withMarketing Planning
Three-Step ApproachAnalysisStrategyAction