IMPACT OF PUBLIC RELATIONS

IMPACT OF PUBLIC RELATIONS

We live in a time of immense environmental complexity and change, and consequently corporations have been forced to significantly alter their strategies to better compete and survive. Mergers, acquisitions, and divestitures represent a major dimension of corporate change over the past several decades. Globalization has been still another catalyst in the rise of corporate identity programs.

According to Greisman, Sr. VP of master cards; if reputation is not everything, it’s the closest thing to it. How a company is perceived- such as trustworthy or not, easy to do business or not, well managed or not, good investment or not, good corporate citizen or not. It affects business success. Public opinion or image is a powerful Force that impacts the earnings of corporate thru their actions such as boycotts, strikes, product recalls, and memos from constituents. Image is gained by what one does and not by what one says. It’s how we chose the business partners. There are several surveys in the market based on corporate’s emotional appeal, financial performance, product and services, vision and leadership, workforce environment and social responsibilities. Let’s identify and analyze the impact of public relations on corporations.

Objectives of Public Relations 

Like other aspects of marketing promotion, public relations are used to address several broad objectives including:

  • Building Product Awareness – When introducing a new product or re-launching an existing product, marketers can use a PR element that generates consumer attention and awareness through media placements and special events.
  • Creating Interest – Whether a PR placement is a short product article or is included with other products in “round up” article, stories in the media can help entice a targeted audience to try the product. For example, around the holiday season, a special holiday food may be promoted with PR through promotional releases sent to the food media or through special events that sample the product.
  • Providing Information – PR can be used to provide customers with more in depth information about products and services. Through articles, collateral materials, newsletters and websites, PR delivers information to customers that can help them gain understanding of the product.
  • Stimulating Demand – A positive article in a newspaper, on a TV news show or mentioned on the Internet, often results in a discernable increase in product sales.
  • Reinforcing the Brand – In many companies the public relations function is also involved with brand reinforcement by maintaining positive relationships with key audiences, and thereby aiding in building a strong image. Today it is ever more important for companies and brands to build a good image. A strong image helps the company build its business and it can help the company in times of crises as well.

   

Impact of Public Relations on public corporations

Public relations offers several advantages not found with other promotional options. First, PR is often considered a highly credible form of promotion. One of PR’s key points of power rests with helping to establish credibility for a product, company or person (e.g., CEO) in the minds of targeted customer groups by capitalizing on the influence of a third-party — the media. Audiences view many media outlets as independent-party sources that are unbiased in their coverage, meaning that the decision to include the name of the company and the views expressed about the company is not based on payment (i.e., advertisement) but on the media outlet’s judgment of what is important. For example, a positive story about a new product in the business section of a local newspaper may have greater impact on readers than a full-page advertisement for the product since readers perceive the news media as presenting an impartial perspective of the product.

Second, a well-structured PR campaign can result in the target market being exposed to more detailed information than they receive with other forms of promotion. That is, media sources often provide more space and time for explanation of a product.

Third, depending on the media outlet, a story mentioning a company may be picked up by a large number of additional media, thus, spreading a single story to many locations.

Finally, in many cases public relations objectives can be achieved at very low cost when compared to other promotional efforts. This is not to suggest public relations is not costly, it may be, especially when a marketer hires PR professionals to handle the work. But when compared to the direct cost of other promotions, in particular advertising, the return on promotional expense can be quite high.

 Market Landscape and Public Relations

Marketers have at their disposal several tools for carrying out public relations. The key tools available for PR include:

  • Media Relations
  • Media Tours
  • Newsletters
  • Special Events
  • Speaking Engagements
  • Sponsorships
  • Employee Relations
  • Community Relations and Philanthropy

 

Before choosing among the various tools marketers should begin by identifying their targeted audiences (e.g., target markets) and key messages they wish to send. These should align with the messages and audiences identified for the product being promoted or corporate goals for non-specific product promotions, such as corporate image promotions.

The key messages are used in the development of public relations materials and supporting programs described below. The purpose of key messages is to provide a consistent point of view over time and across numerous PR methods that reinforce product positioning (i.e., customer’s perceptions) and reach the desired target audience.

Company image sets the stage for how receptive a target audience is for your messages. For service businesses, your image takes on an even greater importance because you are essentially the company’s raw material, machinery, inventory and product all rolled into one. Therefore employees comprise company’s image. As an example, a wardrobe consultant that wears outdated clothes that don’t fit to a potential client meeting won’t create the image that attracts and retains clients. Some people confuse reputation with company image. Your reputation is only one component of an overall image. For example, you may have a reputation for always delivering quality products on time, but your company image also includes the quality of your presentation materials, your advertising, and pricing.

Impact of PR on financials (Profitability)
Public relations can help create a unified message that helps marketing and business development.  This can help define product or service from the customer’s point-of-view, get you on the speaker’s panel at trade shows and conventions, get articles about your firm in the relevant trade publications, and help with collateral material development. Events as a publicity tool have been used as an integral part of the PR business for years and can be far more effective than bombarding editors with press releases.  Many companies focus on staging events mainly because their products get lost trying to get undeserved publicity.   Events, on the other hand, create great photo opportunities if timely and of interest to the community. Enthusiasm and persistence are critical assets when it comes to communicating your message to the public. When it comes to working with firms, Webster suggests, “It is essential that clients don’t bluff about their knowledge, and therefore their expectations of the PR process. The PR firm can’t help unless you adequately communicate the scope of your knowledge about the business.” Good PR work, including press coverage, goodwill generated, and increased impact on public perception of your firm can be powerfully effective.  According to media experts, articles are believed and remembered four to six times more than advertising. 

Branch of public relations specializing in corporate disclosure responsibilities, stockholder relations, and relations with the professional investor community. Financial public relations is concerned not only with matters of corporate image and the cultivation of a favorable financial and investment environment but also with legal interpretation and adherence to Securities and Exchange Commission and other government regulations, as well as with the disclosure requirements of the securities exchanges. Its practitioners, therefore, include lawyers with expertise in such areas as tender offers and takeovers, public offerings, proxy solicitation, and insider trading.

Market Monitoring: Competition and impact of PR

Monitoring public comment about a company and its products is becoming increasingly important especially with the explosion of information channels on the Internet. Today monitoring includes watching what is written and reported in traditional print and broadcast media and also keeping an eye on discussions occurring through various Internet outlets such as forums, chat rooms, blogs and other public messaging areas. Marketers must be prepared to respond quickly to erroneous information and negative opinions about products as it can spin out of control very quickly through the new technology channels. Failure to correct misinformation can be devastating to a product or company’s reputation. It should be noted that specialized monitoring services can be contracted to help companies keep track of “buzz” about the company and its products.

Crisis Management

Marketers need to be prepared to respond quickly to negative information about the company. When a problem with a product arises — in fact or substantiated only by rumour — a marketer’s investment in a product and brand can be in serious jeopardy. Today, with the prevalence of the Internet and wireless communications, negative information can spread rapidly. Through monitoring marketers can track the issues and respond in a timely fashion. To manage response effectively, many companies have crises management plans in place that outline steps to take and company spokespeople to speak on behalf of the company should an event occur.

 Government and Political Relations & Impact of PR

Public relations in the political arena covers a wide range of activities, including staging debates, holding seminars for government leaders, influencing proposed legislation, and testifying before a congressional committee. Political candidates engage in public relations, as do government agencies at the federal, state, and local levels.

Trade associations and other types of organizations attempt to block unfavorable legislation and support favorable legislation in a number of ways. The liquor industry in California helped defeat a proposed tax increase by taking charge of the debate early, winning endorsements, recruiting spokespersons, and cultivating grassroots support. A speaker’s bureau trained some 240 industry volunteers, and key messages were communicated to the public through printed materials and radio and television commercials.

Social Media & Public Relations

Until recently most public relations activity involved person-to-person contact between PR professionals and members of the media, such as journalists and television news reporters. However, several trends are developing that alter the tasks performed by PR people. In most cases these changes are the result of new Internet technologies that are quickly gaining widespread acceptance among Internet users and are becoming new media outlets in their own right.

  • Blogs
  • Discussion Forums
  • RSS Feeds
  • Podcasting
  • Search Engine Optimization

Many (72%) believe social media complement traditional news media, and an even higher number (89%) think blogs and social media influence coverage in traditional news media. Most (84%) believe blogs and social media have made communications more instantaneous because they encourage organizations to respond more quickly to criticism. Results clearly show traditional news media receive higher scores than blogs and social media in terms of accuracy, credibility, telling the truth and being ethical. Findings also show 75 percent expect traditional news media to be honest, tell the truth and be ethical, but only 44 percent hold these same expectations for blogs and other social media. 

Case Study: Apple Inc

“People talk about technology, but Apple was a marketing company,” Sculley told the Guardian newspaper in 1997. “It was the marketing company of the decade.” The current CEO, Steve Jobs, spent $100 million marketing the iMac, which was a run-away hit. Apple continues to spend lots of money on high-profile ads like the “Switch” campaign, and it shows. “It’s a really powerful brand,” said Robin Rusch, editor of the Brandchannel.com, which awarded Apple “Brand of the Year” in 2001. “The overwhelming presence of Apple comes through in everything they do.” Marketer Marc Gobe, author of Emotional Branding, said Apple’s brand is the key to its survival. It’s got nothing to do with innovative products like the iMac or the iPod. “Without the brand, Apple would be dead,” he said. The brand is all they’ve got. The power of their branding is all that keeps them alive. It’s got nothing to do with products.”

The company projects a humanistic corporate culture and a strong corporate ethic, characterized by volunteerism, support of good causes or involvement in the community. Apple has established a “heartfelt connection” with its customers. “People are drawn to these brands because they are selling their own ideas back to them; they are selling the most powerful ideas that we have in our culture such as transcendence and community.

The Apple brand personality is also about simplicity and the removal of complexity from people’s lives; people-driven product design; and about being a really humanistic company with a heartfelt connection with its customers. Apple has a branding strategy that focuses on the emotions. The Apple brand personality-is about lifestyle; imagination; liberty regained; innovation; passion; hopes, dreams and aspirations; and power-to-the-people through technology. The Apple brand personality is also about simplicity and the removal of complexity from people’s lives; people-driven product design; and about being a really humanistic company with a heartfelt connection with its customers. The “1984” ad “Expressions of almost spiritual faithfulness to the Mac, although heartfelt, weren’t a purely spontaneous response to a sublime creation,” he wrote. The brand equity and customer franchise which Apple embodies is extremely strong. Apple’s current line-up of product families includes not just the iPod and iTunes, but iMac, iBook, iLife, iWork, and now iPhone. However, even though marketing investments around iPod are substantial, Apple has not established an “i” brand. While the “i” prefix is used only for consumer products, it is not used for a large number of Apple’s consumer products (eg Mac mini, MacBook, Apple TV, Airport Extreme, Safari, QuickTime, and Mighty Mouse).

Market Cap : 214.62B Enterprise Value (May 9, 2010): 191.46B Trailing P/E (ttm, intraday): 19.99 Forward P/E (fye Sep 26, 2011)1: 15.57 PEG Ratio (5 yr expected): 1.05 Price/Sales (ttm): 4.38 Price/Book (mrq): 5.69 Enterprise Value/Revenue (ttm)3: 3.75 Enterprise Value/EBITDA (ttm)3: 12.11. Apple is a very successful company. Sales of its iPod music player had increased its second quarter profits to $320 (June 2005). The favorable brand perception had also increased sales of Macintosh computers. So iPod gives the company access to a whole new series of segments that buy into other parts of the Apple brand. Sales of its notebooks products are also very strong, and represent a huge contribution to income for Apple. Brand is all-important. Apple is one of the most established and healthy IT brands in the World, and has a very loyal set of enthusiastic customers that advocate the brand. Such a powerful loyalty means that Ample not only recruits new customers, it retains them i.e. they come back for more products and services from Apple, and the company also has the opportunity to extend new products to them, for example the iPod. Steve Jobs aimed to shake things up and run against the grain. He wasn’t one for suits, and the casual-wear chic of Steve Jobs, even during major presentations, quickly turned iconic once he returned to Apple wearing his blue jeans and black turtleneck. This attire is such a part of the image of Steve Jobs that during the presentation that revealed the future iTV, Internet Apple fans tuned in and realized that Steve was NOT wearing a turtleneck and had lost a lot of weight. Worried faithful turned to each other to say things like “OMG, is Steve Jobs dying?” The turtleneck works. It works because Jobs isn’t trying hard to be hip; it works because he’s being comfortable and having fun. The infectious grin, the “one more thing,” and the emphasis on design — the package is very different from other companies. And people respond to it. Other companies front expensive suits as spokespeople, but Jobs is not a suit — he’s a jeans and sweater guy. Whether he really is or not is beside the point. The branding of Steve Jobs is smart because for most people, Jobs is Apple. By making Jobs stand out, Apple stands out. Apple is consistently rated one of the world’s biggest brands now, and Jobs is smart enough to wield the brand of Steve as well. The uniform is the most visible aspect of that.

According to Fortune, Jobs ‘does not pay attention to consumer research’, but he does ‘work slavishly to make products customers will buy’. He does this by using highly tuned intuition about consumers, what we call ‘consumer empathy’. The article goes on to say ‘Jobs serves as a one-man band of consumer research.’ Part of his approach is picking up on things he sees at ‘the periphery’ of the market, and having a knack for knowing which will become big in time.

Reference 

Principles of Marketing -Retrieved May 18, 2010 from http://www.knowthis.com/principles-of-marketing-tutorials/public-relations/trends-in-public-relations/ 

Financial public relations-Retrieved May 18, 2010 from http://www.answers.com/topic/financial-public-relations 

Public relations impact on marketing-Retrieved May 18, 2010 from http://www.macven.com/Innovation_Services/Marketing_Innovations/On_Public_Relations/on_public_relations.html  

Public Relations - Retrieved May 18, 2010 from http://www.answers.com/topic/public-relations 

Impact of public relations- Retrieved May 18, 2010 from http://www.instituteforpr.org/files/uploads/2005_Seltzer.pdf 

Measuring PR Impact- Retrieved May 18, 2010 from http://www.instituteforpr.org/research_single/measuring_pr_impact 

Media and public relations- Retrieved May 18, 2010 from http://www.tldp.org/LDP/Linux-Media-Guide/html/monitor_clipping_services.html
Objectives of public relations- Retrieved May 18, 2010 from http://www.knowthis.com/principles-of-marketing-tutorials/public-relations/objectives-of-public-relations/

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About kadamb

At work I am a Microsoftian, Global Program Manager working in Partner Strategy & Business Management space. At home I am a Husband and Father of two cute kids; like spending time with family and friends. By nature I am optimistic, logical, extrovert and follow the values and faith. Love travel and visiting the entire world is my dream. Like reading and writing philosophical, sociological, spiritual or Emotional intelligence blogs to help humans understand the challenges in life and the way to happily live with that. In my another category I share my WORLD TRAVEL experience so that travelers could make informed decisions. In my business category I share the MANAGEMENT blogs which can be helpful for a MBA graduate or business executives.
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One Response to IMPACT OF PUBLIC RELATIONS

  1. woo im inspired by this article.

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