Marketing Risk and it's Classification

What is Marketing Risk ?

^{Marketing process has to face risk and uncertainties at any point of time because of changing demand and fashion, price fluctuations, change in taste and preference of the consumer, change in the marketing environment as well as competitions, development of new product etc. Risk arises due to uncertainties with respect of cost, loss and damage.  These risk are assumed by the people who are in the field of marketing and who take title of goods. The danger of financial loss which can be caused by various reasons is termed as marketing risk. The future  cannot be predicted in advance so it is full of uncertainties and to avoid this risk the management do a lot of planning but planning  alone cannot reduce the risk. Risk starts at a very early stage of the product of the product and it involved in the moment till the product reaches to the consumer.}

^{Classification of risk in marketing}

 ^{Economic Risk}

^{Natural risk}

^{Human risk}

^{Economic Risk}

^{Time Risk- The most important factor considered in the marketing is time factor. Every little things change with the  passage time. In marketing there is risk associated with the change in price due to the change in the time. This change in price can be caused by development of the new product which can be the substituted by your product or by changing some of the features of the existing product by your competitor. Change in size of population and taste and preferences also various with the time. All changes are unpredictable no one can predict that how long a product will be service in the market and when there will no demand for that.}

^{Place Risk- The price of product are different in different markets at the same time. The reason behind this is every market place has different demand as well as supply so prices differs from one place to another.  When a business purchase a product from another market it aims to sell that product in higher price but sometimes due to the current price in the market the businesses left with the no option rather than selling its product lower than the purchase price, this leads to loss in the business. Such losses is only due to lack of knowledge about the marketing condition.}

 ^{Competition Risk- In market one cannot escape from competition it always exist in the market. Large numbers of buyers and sellers in the same market increase the competition in the market. A business must be aware about its competitors strategies in order to sustain in the market. The competitors can change the method of production to  lower the price of product or to change the quality or quantity of the product. Thus businesses need to be aware about the actions of its competitors. To sustain in the market at a good position marketers need to keep their eye on its competitor.}

^{Natural Risk}

^{Risk from the nature such earthquake, fire, heat,cold, rain, flood etc are such risk which cannot be controlled by anyone because the future is unpredictable. The natural risk can be the cause of damaging the physical product to the great extent. A product which need to be produce in the hot place if the temperature falls it can cause physical damage to the product. A farmer may not be able raise crops because of flood or drought. The risk associated with the nature can be minimized to some extent but cannot be avoid fully.}

^{Human Risk}

^{Personal Risk- Personal risk is associated mainly with the employee in the organization. The business can face risk when its employees does not work properly the assigned task. Some employ always pretend to care for the organization but they do not do so which can cause risk. Death of the responsible officer is considered as a big loss for the organization. Thus the risk from employees comes under personal risk}

 ^{Consumer Risk- When the product does not match the standard of the consumer it can be called as consumer risk. There is risk of loosing the customer if the product does not satisfy the consumers, a retailer may loose it customer just because of development of the new product or availability of the better quality of the product in the market. The market must aim to meet the needs and demand of the consumer to overcome to minimize this risk.}

^{Government Risk- The action of the government can also effect the market such as  rise in the price of oils, changes in the policy , taxation, and tariffs. According to changes the market need to proceed with its further  process.}