Many companies base their strategy on the basis of certain failure risks, better known as risk factors. The term is used, among other things, with regard to the capabilities of an employee. Wanne
if an employee performs insufficiently, this can be seen as a risk factor. The term is also very well known in the marketing industry. When a controversial campaign is developed, where there is a chance that there will be a negative reaction from the public, we speak of a high risk of failure.
Negative Effects of Advertising
The negativity that arises when a controversial campaign is launched can cause a lot of damage to a company. Before such a kind campaign made, the risks are of course considered. These are carefully weighed against each other, yet the final reaction of the audience cannot of course be fully predicted. You can think of an advertisement that is very well received by a specific target group, while another group of people shows aversion. When the intended target group of a campaign reacts negatively due to this leading to loss of income, this is of course not desirable. Still, negativity about a campaign is not always bad. When people who fall outside the intended target group react negatively, this does not have to lead to loss of income and controversy can actually lead to more attention for a campaign.
Risk of failure in practice
Company Sony knows all too well what it is like to deal with a high risk of failure. A decision had to be made a few decades ago. How could Sony differentiate itself from Nintendo? Sony chose to take a different approach. Where Nintendo focused on family-friendly games, Sony chose to focus on action and adventure games. Sony’s PlayStation was soon seen by the public as a game console for cool games. This was mainly due to the commercials that showed action games with blood. In this case, the response from the audience was positive.
Of course, a risk of failure does not guarantee success. There are many examples of large companies that can talk about this. For example, Bic, the manufacturer of the well-known pens, thought it would be a good idea to market a pink pen, especially for women. This did not go down well with a lot of people. Usually, an additional plan is drawn up in advance when the risk of failure is high. In this way the damage can be limited as much as possible afterwards in a quick manner.