Transcript MANAGING RISKS

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CHAPTER
19
MANAGING RISKS
19-1 Assessing Business Risks
19-2 Identifying Marketing Risks
19-3 Managing Marketing Risks
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© 2009 South-Western, Cengage Learning
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©ZURICH
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?
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19-1
ASSESSING
BUSINESS RISKS
GOALS
Explain why businesses take risks and
how they are classified.
Describe the four ways available for
businesses to deal with risks.
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© 2009 South-Western, Cengage Learning
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The Nature of Business Risk
The possibility that a loss can occur as
the result of a decision or activity is
known as risk.
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© 2009 South-Western, Cengage Learning
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Classification of Risk
Source of the risk
Result of the risk
Control of the risk
Insurability of the risk
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© 2009 South-Western, Cengage Learning
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Dealing with Risk
Management
Strategy
Avoid the risk
Transfer the risk
Insure the risk
Assume the risk
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Result
Business chooses a different strategy that
doesn’t involve that risk
Business lets another business complete
the risky activity
Business pays insurer to reimburse the
amount of losses from the risk
Business proceeds with the decisions made
and takes full responsibility for the results
MARKETING
© 2009 South-Western, Cengage Learning
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19-2
IDENTIFYING
MARKETING RISKS
GOALS
Explain how changes in the economic
and competitive environment create
marketing risks.
Describe marketing risks associated
with each of the marketing mix
elements.
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The Risk of Change
Risk management
Economy
Laws and regulations
Competition
Customer needs
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© 2009 South-Western, Cengage Learning
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Risks to Elements of the
Marketing Mix
Product
Distribution
Price
Promotion
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© 2009 South-Western, Cengage Learning
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19-3
MANAGING
MARKETING RISKS
GOALS
Explain 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.
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© 2009 South-Western, Cengage Learning
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Handling Risks with
Marketing Planning
Three-Step Approach
 Analysis
 Strategy
 Action
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© 2009 South-Western, Cengage Learning
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Other Ways of Dealing with
Marketing Risk
Security and safety
Insurance
 Surety bond
 Product liability insurance
 Professional liability insurance
Risk reduction
Chapter 19
MARKETING
© 2009 South-Western, Cengage Learning