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The probable risk factors during products marketing are:
Risk Factors
Risk factors can be broken into two groups: controllables and uncontrollables. Both types must be understood and rated for risk vs. return, not unlike any other investment decision.
Controllable
The Ability to Choose the Right Market. Markets the world over are becoming more demanding. Increasing effort is required to understand and target the correct market for a product. Even within countries there may be different markets of varying sizes which may be attractive to develop. In every market, price is important. There are markets where the cost of protein is the most important consideration. In these markets our usual "quality" of lean standard is unimportant relative to the "quantity" of lean. Other markets require unique specifications on size, fat cover, and colour of both lean and fat to receive the highest market premium. The ability to decide which market or markets are the best fit for the supplier's strengths is critical.
The Ability to Sustain. In any decision to market, the ability to sustain a position in the market is important. If the choice is to sell by providing the lowest cost in the market the supplier must be sure that his low cost advantage is sustainable. If it is not, the market will disappear as soon as the lower cost competitor arrives. By the same token, if the supplier can supply a high quality product to a customer, but the costs involved in producing the product are very high, the supplier will run the risk of the customer deciding that the premium to be paid is not worth the extra cost relative to a lower quality, but cheaper supplier. The ability to sustain a marketing effort through the costly start-up phases of the market, as well as in times of short term unprofitability, are also very important.
Dependence. This is a particular concern to smaller suppliers. Any time a customer starts to develop into a major part of the total business, a conscious decision should be made with regard to the risk of putting all the "pigs in one farrowing crate". The business risk in losing the customer must be weighed against the customer's dependence on the supplier's product. As soon as the customer's dependence starts reducing so will profit margins. If there is no plan for this problem, then the business may fail. On the other hand, if there is mutual interdependence then it may be the best and safest type of arrangement. MBA's may call it a synergistic alliance; we call it a good deal.
Losing Focus. Many times the best marketing efforts result in failure because of a lack of attention. As in every part of the business - understanding costs, weighing potential risks, developing a plan and implementing it are keys to success in marketing. It does not guarantee success, but losing focus will likely lead to failure.
Making the Wrong Decision. The most obvious risk factor. Despite hard work and best intentions it is common to make the wrong decision. It may be a result of an event beyond the suppliers control or it may have been something as simple as a pricing mistake. Either way, the key is to make sure that any mistake is small enough to be "a learning experience".
Uncontrollable
Political Decisions. This refers to logical and not so logical reasons for some of the problems which occur in marketing pork. Countervailing duties, tariffs, bogus health issues, and trade sanctions are a few of the types of barriers used to impede, increase the cost, or totally restrict product from entering countries.
Real Health Issues. Every producer/processor is susceptible to the impact of health issues. While they may not have been a contributing cause to the problem, each individual producer/processor is susceptible to a regional/national health problem that affects exports.
Exchange Rates. This factor is tied in quite closely with a countries economic and political stability. For someone who was relying heavily on the Mexican market2.5 years ago, they would have learned a great deal about exchange rates and how they can affect marketing when the peso value dropped against other international currencies.
Depend what type of marketing you do most risk factor is complain
etc should be justified by the revenue. It is therefore advisable to start with t a small budget and increase the budget once the revenue starts coming in.
