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9 Types of Marketing Risk

 , updated on July 17, 2017
Marketing risk is the potential for losses and failures of marketing. This includes risks related to pricing, product development, promotion, distribution, branding, customer experience and sales. The following are common types of marketing risk.

Brand Risk

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.

Product Development

Risks 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.

Demand Risk

The risk that demand 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 suddenly fall due to an innovation that makes a product obsolete.

Concentration Risk

Dependence on a small number of products, regions or customers for your revenue. For example, a firm that generates 80% of revenue from 5 customers.

Price Risk

Price related risk such as a price war.

Distribution Risk

Distribution risks such as channel conflict, loss of partners and inventory risk.

Operations Risk

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.

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.

Sales Risk

Risks related to sales processes. For example, a high performing salesperson quits and is able to attract many of your biggest accounts to their new company.
Overview: Marketing Risk
Type
Definition
The potential for losses and failures of marketing.
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