Brand-Market Risks

The global marketplace of the twenty-first century is congested with various brands of multi-domestic, global, and local origin. Local brands have higher potential to follow the brand marketing strategies of popular brands of other categories as the local brands serve a small niche of the consumer segment and make a deeper impact on the consumer preferences. As more brands are added to the marketplace frequently across the regions, there appears to be a continuous threat to the brands at various geo-demographic market levels. Local brands leap in the market with limited resources and potential goals to reach the consumers faster and at low cost. Such behavior of local brands often causes threats to the established brands and even to the lead brands. Consequently, companies face imitation of brands, online disruptions, and market uncertainties in different markets. Besides these factors, underperforming brands also cause enormous financial risk to the companies, which results in low brand equity, low market share, high investment, and low consumer acceptance. Many business decisions are made by the companies today toward marketing, branding, advertising, and customer services with incomplete information on market competition and face uncertainty and risks of brand failure. While risk can never be completely avoided, companies need to take such contingency into their strategic planning. The systematic identification and assessment of risk, a frank discussion of risk tolerance, and the use of a variety of the techniques are followed by many companies to manage the risk caused.