Market Risk—An Analytical Framework

Because of the reluctance of marketing men to publicize failures, there has been a tendency for managers to avoid the analysis of the possible effects of wrong decisions in the marketing process. Yet these wrong decisions can easily cause failure of the entire enterprise. This article sets forth a positive way to deal with the negative aspects of marketing decision making. The author presents a framework for the analysis of market risk in such a way that the reader can appreciate the dual nature of marketing decisions, the risk element as well as the profit element. In this way the possible effects of both good and bad decisions can be seen clearly before the initial action is taken.