1. © 2009 South-Western, Cengage LearningMARKETING 1 Chapter 19 MANAGING RISKS 19-1Assessing Business Risks 19-2Identifying Marketing Risks 19-3Managing Marketing Risks CHAPTER 19

2. © 2009 South-Western, Cengage LearningMARKETING Chapter 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? ©ZURICH

3. © 2009 South-Western, Cengage LearningMARKETING Chapter 19 3 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. 19-1

4. © 2009 South-Western, Cengage LearningMARKETING Chapter 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.

5. © 2009 South-Western, Cengage LearningMARKETING Chapter 19 5 Classification of Risk Source of the risk Result of the risk Control of the risk Insurability of the risk

6. © 2009 South-Western, Cengage LearningMARKETING Chapter 19 6 Source of the Risk Natural risk Human risk Economic risk

7. © 2009 South-Western, Cengage LearningMARKETING Chapter 19 7 Result of the Risk Pure risk Speculative risk

8. © 2009 South-Western, Cengage LearningMARKETING Chapter 19 8 Control of the Risk Controllable risk Uncontrollable risk

9. © 2009 South-Western, Cengage LearningMARKETING Chapter 19 9 Insurability of the Risk Insurable risk Noninsurable risk

10. © 2009 South-Western, Cengage LearningMARKETING Chapter 19 10 Dealing with Risk Management StrategyResult Avoid the riskBusiness chooses a different strategy that doesn’t involve that risk Transfer the riskBusiness lets another business complete the risky activity Insure the riskBusiness pays insurer to reimburse the amount of losses from the risk Assume the riskBusiness proceeds with the decisions made and takes full responsibility for the results

11. © 2009 South-Western, Cengage LearningMARKETING Chapter 19 11 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. 19-2

12. © 2009 South-Western, Cengage LearningMARKETING Chapter 19 12 The Risk of Change Risk management Economy Laws and regulations Competition Customer needs

13. © 2009 South-Western, Cengage LearningMARKETING Chapter 19 13 Risks to Elements of the Marketing Mix Product Distribution Price Promotion

14. © 2009 South-Western, Cengage LearningMARKETING Chapter 19 14 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. 19-3

15. © 2009 South-Western, Cengage LearningMARKETING Chapter 19 15 Handling Risks with Marketing Planning Three-Step Approach Analysis Strategy Action

16. © 2009 South-Western, Cengage LearningMARKETING Chapter 19 16 Other Ways of Dealing with Marketing Risk Security and safety Insurance Surety bond Product liability insurance Professional liability insurance Risk reduction