MARKETING DEPARTMENT POSSIBLE RISKS

Marketing Risks – exposure/prospect that could pose a THREAT to the success of the marketing
campaign.

With so many elements involve; product, strategy, budget, image, competition and consumer
opinion.

But can mitigate these risks with a structured MARKETING PLAN.

TYPES of MARKETING RISK and ITS CONTROLS:

 BRAND RISK – is the potential for a valuable brand to lose value or new brand to fail in the
market.
A valuable brand is at constant risk of losing brand value due to competition and failures
such as a rebranding that results in declining brand awareness.
 CONTROL:
 This can be managed with a standard process of risk management whereby
risks are identified, treated and monitored.

 PRODUCT DEVELOPMENT RISKS – a risk related to developing and launching a new product.
Completely new products typically have a reasonably high failure rate at launch. Product
development also involves project risk and innovation risk.
 CONTROL:
 To mitigate this risk, a feasibility study must be done to know if the new
planned product is profitable in that certain location.

 DEMAND RISK – is the potential for a loss due to a gap between forecast and actual demand.
The risk that demands for your products or services will fall or fail to materialize. This can
occur due to shifts in customer needs and preferences. Demand can also that makes a
product obsolete.
 CONTROL:
 A feasibility study or keen observation about the trends and changing needs
of the people.

 CONCENTRATION RISK – is the potential for a particular investment or clad of investment to

threaten the health of financial institution or investment portfolio.
Dependence on a small number of products, regions or customers for your revenue.
 CONTROL:
 Expansion and innovation of products.

 PRICE RISK – is the potential for the decline in the price of an asset or security relative to the
rest of the market.
Price related risk such as a price war.
  CONTROL:
 As such, price risk is the component of investing risk that can be reduced
with diversification.

 OPERATIONS RISK - is the potential for losses due to failures of an organization’s core
business processes.

A broad class of risks that includes anything that can potentially go wrong with your core
business processes. For example, a manufacturing problem that results in a delayed product
launch or a supply chain problem that results in poor inventory levels.
 CONTROL:
 Having backup plans
 Assessment of the situation before the production begins like inspection of
machines used in manufacturing

 REPUTATION RISK - the risk of negative events such as poor customer service damaging your
reputation. Reputation risk can be seen as a gap between how you want to be viewed as a
brand and how you behave as a firm.
 CONTROL:
 Stay conscious of brand’s public perception
 Assess perception through:
 Surveys, customer reviews, and customer feedback
 Responding to customer directly and promptly

 SALES RISK – is the potential for sales failures. This includes risks associated with an
opportunity, account or broad risks that impact your entire pipeline.
Risks related to sales processes.
 CONTROL:
 Engagement with customers through giving PR packages to popular
influencers, or
 Being active to social media platforms like insta, facebook, and tiktok posting
stories about your product

OTHER RISKS POSSIBLE& its CONTROL:

 MINIMAL MARKETING STRATEGY – too small of a marketing scope/lack of diversification

Marketing strategy can profoundly influence the success of a product/service launch
 CONTROL:
 To overcome this risk is with dynamic leadership, well-communicated goals
and powerful organization and collaboration among team members.
 Diversifying marketing plan through:
 Contacting clients
 LACK OF CLEAR BRAND MESSAGING – it is working with every potential client being
encountered, rather than focusing on the target audience.
It can lead to:
 inefficient operation
 imprecise marketing campaign
 CONTROL:
 Consider re-evaluating core demographic routinely to guarantee the best
return on marketing efforts.
 Defining ideal customer:
 Enlist diverse customer to consider multiple perspectives and angles
 Use analytics tools

 PRICING STRATEGY – pricing a product incorrectly. if your strategies are not well-aligned with
your offers.
Three categories:
 High price
 Moderately price
 Low price or Discounting price
 CONTROL:
 Assessing pricing strategy, overcome this by learning how to market any
changes effectively to their target demographic.
 Techniques:
 Price raises, flash sales, and online specials

 AFFILIATE PARTNERSHIPS – can be powerful tools in business and can drive sales but it comes
with additional risk because their actions can affect the perception of the company’s brand.
 CONTROL:
 Careful partner relations management and intentional affiliate selections. By
choosing partnerships with established brands carefully and strategically.
 Fostering relationships with companies that align well with your core values
and present themselves transparently.
 Establish relationships with brands that develop mutual respect and support

 ADVERTISING – that is false, misleading, inaccurate advertising or unethical advertising is used,

could result to public trust lost and brand’s reputation damaged. It is choosing the wrong
channel to advertise to a target audience.
 CONTROL:
 Definite/emphasized target audience
 Select appropriate channel according to your target audience
 Getting facts checked
 Avoid unethical concepts like being racist, homophobic, or other sensitive
type of concepts
 EMPLOYEE TURNOVER - at any point, a marketing department could lose a key member of their
staff, either temporarily or permanently, which could impact any phase of marketing execution
from sales to event management.
 CONTROL:
 Proper recognition of employees’ hard work like giving bonuses or giving
credits to the employee who actually made the work
 Acknowledging ideas from employees
 Engagement with employees like team building

 BUSINESS OPERATION CHANGES - any of the core processes of the company’s business could
shift and impact marketing activities. This could involve an investor pulling out of a project or a
factory experiencing a natural disaster like a flood or storm.
 CONTROL:
 Having backup plans for every situation that might occur which must be
aligned with efficiency, productivity>costs.

 DISTRIBUTION DELAYS - if a product is delayed in production or a service is delayed due to a

problem with a vehicle in your fleet, this falls under the umbrella of marketing risks because it
will impact the ability of products to get into the hands of customers.
 CONTROL:
 Giving estimation of the delivery date to the customers considering
emergencies that might occur. So if the delivery date is 9/12/23, there
should be 5 days allowances after the scheduled date so the delivery date
should be 9/17/23.

Marketing risk management several steps to avoid and respond risks when they arise.

1. Assessment: Throughout the planning process, marketers should conduct a marketing risk
assessment to identify potential risks that could impact activities and campaigns. These
could be as simple as identifying the inclement weather trends that might impact
production, from hurricane season in coastal areas or snowstorms in cold weather locations.
Your team might also brainstorm issues that might arise with competitor pricing based on
past data.

2. Analysis: Analysis is the next step and involves considering how likely these events are to
occur, how often they have happened in the past, and any data you have that will help you
determine which risks are most likely to play out.

3. Planning: Next, the marketing team will adjust marketing plans based on the identified risks
and the marketing risk analysis that determined their likelihood. Alternative plans should be
included where possible, so marketing teams know how to adjust their activities should one
 of the risks turn into reality. For instance, a marketing plan could include an alternative plan
should a production or distribution system encounter inclement weather.

4. Monitoring: Finally, the marketing team needs to continually monitor marketing activities for
risk throughout the planning phases as well as execution. Continual assessment of marketing
risk can help marketing teams stay ahead of potential problems and employ alternative plans
when necessary.