Applying Risk Management Principles and Experiential Marketing Strategies PART 1: Module 4 Discussion - The Five Steps

 Applying Risk Management Principles and Experiential Marketing Strategies

PART 1: Module 4 Discussion - The Five Steps of Risk Management

Risk management is a systematic path through which organizations identify, examine, and mitigate uncertainties that can be involved in attaining the strategic goals. Data analytics are increasingly becoming important in risk management as it enables organizations to detect threats at an earlier stage and respond more proactively. McKinsey and Company (2020) report that organizations making investments in analytics have a better insight into the emerging risks due to the analysis of trends in both operational, financial, and customer data. The capacity enhances the conventional five-step process of risk management, which is risk identification, risk analysis, risk evaluation, risk treatment, and risk monitoring.

The initial process is risk identification in which possible internal and external risks that are likely to adversely impact an organization are identified. Such risks can be financial instability, market competition, operational failures or reputational damage. State-of-the-art analytics assist companies in identifying risks that are not initially seen through the use of vast amounts of data and pinpointing abnormal trends that can be predictors of issues ahead (McKinsey & Company, 2020). Early warning enables organizations to work in advance when risks are lower.

The second step is the risk analysis which involves determining the probability and possible impact of every identified risk. Organizations determine the extent of the consequences and the frequency at which the risk may be. The process is supported by analytical models and forecasting tools which give quantitative estimates. To illustrate, Ailawadi et al. (2002) expound that price promotion can generate temporary sales growth, but damage brand equity in the long-term, a type of analysis based on data can help identify strategic threats that might not be apparent at all.

Risk evaluation is the third step; it is a comparison of analyzed risks with the risk tolerance of the organization. Leaders prioritize the risks according to their importance and decide what needs to be acted upon. There are those risks that can be tolerated and those that require robust controls or mitigation measures.

The fourth step is risk treatment whereby the relevant responses are chosen by reducing the effect of the risk, avoiding it, transferring it through insurance or contracts or accepting it. Evidence-based data assists managers to select the most viable and cost-efficient treatment alternatives.

The last activity is risk monitoring and review where the evaluation of risks and control measures is constantly done. Continuous analytics enables organizations to monitor performance indicators and modify strategies according to the shift in conditions. These five steps combined with each other form a proactive risk management model that enhances resilience in organizational decisions and organizational resilience.

PART 2: Module 3 Assignment - Event Marketing Research

·         Name of the Event: Fiestas de la Calle San Sebastian (San Sebastian Street Festival).

·         Event Theme: Puerto Rican culture, history, music and arts.

Major Attraction:

·         Live shows of famous Puerto Rican artists, traditional Puerto Rican dancers, markets of artisans, cultural parades.

Event Timeline:

·         4:00 PM - Opening of the event, opening of vendors and artisan booths.

·         5:00 PM - The performance of the culture and folklore.

·         7:00 PM -Live music concerts on main stage.

·         10.00 PM -Headline artist performance.

·         12:00 AM – Event closes

Feedback and Strategic Application:

This experience works effectively based on experiential marketing to generate a cultural immersion. There are several performance tents and vendor zones that allow people to move and get more acquainted with sponsors and merchants. In the case of my own event, I would be using a similar layout to ensure that there is no congestion of crowds and to ensure that it is engaging (Shone et al., 2019). Popular performers definitely would bring people together, and therefore having attractiveness would be a priority. Also, event identity and awareness is reinforced with the regular branding of the event using banners, merchandise and social media advertising. The implementation of these strategies will contribute to the formation of the structured, entertaining, and memorable event.

References

Ailawadi, K. L., Neslin, S. A., & Gedenk, K. (2002). Who benefits from price promotions? Harvard Business Review, 80(9), 80–86.

Dionisio, P., Leal, C., & Moutinho, L. (2008). Fandom affiliation and tribal behaviour: A sports marketing application. Qualitative Market Research: An International Journal, 11(1), 17–39. https://doi.org/10.1108/13522750810845531

McKinsey & Company. (2020). To recognize risks earlier, invest in analytics. Harvard Business Review. https://hbr.org/2020/11/to-recognize-risks-earlier-invest-in-analytics

Shone, A., & Parry, B. (2019). Successful event management: A practical handbook (5th ed.). Cengage Learning.