Anticipating the Future: Managing Risk and Real Options
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The future is not certain. There are risks and opportunities that may impact the outcomes of the best-laid plans. This chapter describes how the models, tools, and techniques developed for the case of certainty can be adapted to address more realistic situations in which marketing planning occurs under uncertainty. The chapter presents and evaluates techniques that firms use to incorporate risk into their budgeting processes and financial planning with a specific emphasis on how risk is evaluated in a financial context. The chapter also addresses the means by which firms may leverage existing marketing assets or real options.
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