Risk analysis and control is one of the key areas of management. However, due to some reason risk management somehow has not been core component of marketing practices. Although other field of studies such as project management, business analysis and Information technology has been implementing risk management principles with full spirit and zeal. Thus, in this blog post we will try to look at some of the famous failures in marketing initiatives, then we try to examine the problems and finally we will conclude with recommendations to overcome this dilemma of lack of integration of Risk management with digital marketing.
Although marketing is long-established professional field of study and time has proved its worth. However, there is always room for improvement in all trades. Here I quote one informative post, which will give insight of some of the failures in the past across the globe justifying the need of risk management in marketing. “Managing the risks of marketing” Posted by Prof David Corkindale few years back:
- Hoover launched a campaign to get rid of old stock and offered two free airline tickets against 100 pounds of purchase. They were overwhelmed by the market response and all efforts went in vain, sabotaging their brand image. They had not estimated the risk they are running in.
- SA Brewing had a cash back offer on the side of the slab of one of their beers, aimed at the consumer. They estimated redemption rate of 4%. The wily distributors and retail trade cut the offer off the packaging and sold the bottles individually. They claimed the cash-back and the redemption rate was over 90%.
- A very well chronicled marketing debacle occurred after Southcorp and Rosemount merged. The discounting policy on wine brands in the UK resulted in not only loss in profits but also loss in brand equity.
Now let’s look at the problem which might have contributed in non compliance by marketing with risk management principles. The significant reason is that there is no consensus among international standard organizations such as ISO, IEC or NIST on risk management. Here I will refer another blog which has covered this topic in detail and that is “Threat vs Vulnerability vs Risk”. This post has revealed factual disagreements among industry standard organizations. Therefore, question of acceptability rises and different industries are following variant standardization bodies.
Finally, to recapitulate, risk management is the necessity of marketing industry as they deal with change frequently especially after inception of digital marketing where technological developments are happening on day to day basis. Technology Pervasiveness is one of the significant risks in digital marketing. Moreover, non-concurrence of methodologies standardized by international regulators forced organizations to make appropriate practices themselves to counter the menace of uncertainty and unpreparedness to deal with risks. I will be covering this topic with more specific information on implementing risk management in digital marketing strategies and tactics.
Please note:I am glad to submit 25th post on Digital Marketing, which means posting wise, it is a silver jubilee. Having said that it’s just a beginning of the long journey of learning and sharing. However, I would like to appreciate and thank all the support I got from my valuable readers in the shape of following, sharing, commenting and liking my blog posts.