Marketing-risks: classification and methods of assessmen

Abstract

MARKETING RISKS: CLASSIFICATION AND METHODS OF ASSESSMENTStatement of the problem. Nowadays, the product life cycle is reducing; the number of trademarks is increasing; the effectiveness of advertising campaigns is reducing; the value of traditional mass media is decreasing. In these conditions the risks in marketing are increasing.The increase in the riskiness of entrepreneurship in the 21st century is evidenced by a new definition of marketing, which was proposed by the American Association of Marketing. The previous version is: "Marketing is the process of planning and implementing of the plan pricing, promotion and implementation of ideas, goods and services through the exchange that meets the goals of individuals and organizations" [1, P. 1].There is a focus on the risks appears in the new version: "Marketing is a function of organization which includes a set of processes for the creation, promotion and delivery of consumer values on the base of management of relationships with customers,resulting in the organization bears risks and benefits" [2, P. 45].In the specialist literature the term "risk in marketing" is the subject of debate. Analysis of the recent research and publications. Risk is inherent attribute of business activities and theory of risks created in the work of many scientists.A. Smith has laid the bases of the theory of risks. He believed that profit is compensation to the owner of capital for risk [3, p. 157]. In the eighteenth century the scientific basis for quantitative risk calculations not yet formed and businesses relied on luck, experience and intuition. In economics during the nineteenth to the first half of the twentieth century two theories of business risks (classical and neoclassical) were formed.Classical theory created by J. Mill., N. Senior, F. Knight identifies the economic risk as the mathematic expectation of profit loss or probability of losses that can appear.