MARKETING MATERIAL

9075 – Marketing Practice 10 Public Relations 

Chapter 10

'PUBLIC RELATIONS'

We will now move on to look at some of the other forms of promotion. Of these the first, and often the most neglected is that of PR. This is variously expanded as public relations, which may include a wide range of activities, or press relations, which concentrates on the more direct promotional aspects. I prefer to think of it simply as PR or (to emphasis its importance) PoweR. It can be a very effective (and very inexpensive) part of the any marketing mix; but it is one that many organisations neglect. Although there is a limit to the amount that can be productively spent on PR, up to that point it is often the case that (dollar for dollar) the money spent on PR can be many times more productive than that spent on other types of promotion (including advertising). This is just as true of a small company (which may find such PR the most effective vehicle for promoting its products, where it simply cannot afford large budgets).

PRESS RELATIONS

PR (in the narrower context of press relations) is often a particularly valuable promotional device for services; since the 'authority' offered by independent recommendations in editorial matter can add vital credibility to an intangible service. It is also a particularly easy promotional device for non-profit organisations to use; the Open University, for example, has little need to advertise - where it is a very legitimate topic for considerable editorial comment. 

There are a wide range of vehicles available for press relations (where a good practitioner of PR will use any opportunity on hand to further the cause of the client). Some of the main ones are:

                                MEDIA CONTACT

                                NEWS STORIES

                                MEDIA EVENTS

                                PRESS OFFICE

One of the most important tasks of the PR professional is to maintain contact with the key journalists in the relevant media (usually national press, journals, radio and television). This is a two way process, which should, however, be the province of experts (often from an outside agency). The PR professional learns about, and can contribute to, features which will be appearing in the media; while, in the other direction, the journalists become more receptive to news stories from the PR professional.

It is, once more, an 'investment' process. The relationship with the media (and especially with individual journalist) has to be cultivated; until a mutual trust has been earned. This is, when working properly, not a process of exploitation - by either side - but of mutual respect.

It is significant that a US survey (carried out by Sheila Tate, Sheila;, press secretary to Mrs Nancy Reagan - as reported by Roger Haywood) revealed that more than 90 per cent of journalists rated 'candour' as the key quality they required in an executive responsible for public relations; and the same percentage said they were more likely to deal with PR people they knew personally.

The backbone of PR is the news item, either genuine or 'manufactured', which shows the client product or service in a good light (and, most important, is interesting and entertaining enough to be run by the news media). Such stories are best placed, as described above, by personal contact. The most important aspect of an story, though, is that it should be 'newsworthy'. In general:

Consequently you need the professional (journalistic) experience to recognise just what is a newsworthy story (which may not be what the amateur would expect), and then to be able to present it in a way that interests a (very cynical) press corps.

Public relations handbooks tend to stress that you must have good writing skills to deliver such stories; but that is only the starting point. PR is like any other form of marketing. You must know the customers (here the journalists) and provide (and sell) the right 'product' (the story they want).

The personal touch, such as personal delivery, helps. Surprisingly. perhaps, the same US survey quoted above showed that most press releases were read by journalists (who were even happy to be reminded, by telephone, of press events)! Journalists need sources for their stories; just so long as they are worthwhile. This is tempered by a United Kingdom survey which showed that press releases achieved only a 22% rating as a 'source of information most useful to your work as an editor' compared with 86% for articles in other newspapers.

One device often used is a media event, the launch of a new product for example, which is an excuse for inviting journalists to a free lunch and exposure to the accompanying PR messages. Unfortunately, despite the journalists' reputation for being able to smell a free drink from more than a block away, this rarely works as a device; unless the groundwork has already been done and the personal contacts with the media well and truly established.

Once again the material which will get the coverage is that which deserves it; which has been presented, and explained, in a way that attracts the attention of journalists. The US survey showed, though, that two thirds of journalists believed that news conferences were abused as a communications technique. On the other hand, discreet use of bona-fide executives from the organisation may pay better dividends. The United Kingdom survey mentioned above rated interviews with 'company officials' at 58%; compared with 19% for 'company public and/or press relations officers' and a mere 14% for 'public relations agencies' (and, surprisingly perhaps, only 22% for trade or industry associations!).

This is generalised in the diagram below, which illustrates the importance of using the (correctly trained and prepared) senior executives as the 'front-line' troops:

It is just as important that you are able to react to press enquiries. A continuously manned press office, which can handle any level of question from journalists, and is almost effusively enthusiastic to help, is essential if PR is to be taken seriously. Again, professionalism is essential. Not least is the ability to find answers quickly, to meet deadlines - by which almost all journalists are driven.

PR is very cost effective and the amount which can be spent on it is relatively low, in comparison with the other promotional spends - and is self-limiting (there are just so many events you can arrange, and just so many journalists you can entertain). Thus, there is a good argument for saying that, in setting budgets, PR should come at the head of the queue. Only when you have obtained the maximum you can achieve from PR should you allocate the remaining funds to the other promotional activities. Since you get what you pay for it is, thus, also better to pay more for high calibre personnel than waste the rest of the PR budget.

CORPORATE RELATIONS

PR is often, though, used as a global term to cover a wider range of activities. Of these perhaps the most important may be that of acting as the corporate interface with the outside world. This aspect of PR is much more likely to be the province of corporate PR personnel.

The organisation will often be exposed to the activities of external pressure groups and the corporate PR department, if one exists, will typically be the one that 'defends' the organisation against these onslaughts, and handles the external interface with such groups - though an important first line of defence, one which is often ignored in the heat of the moment, is simply that of actually remedying what these groups are attempting to rectify themselves!

How the organisation then responds to such pressure, usually in terms of its own submissions to the bodies which wield power (most often, via the media, and public opinion), is most clearly the responsibility of the corporate PR function. Rather fewer organisations use PR to positively influence 'external' activities, such as those in the political arena, to their advantage. Those that do, however, may gain considerable advantage. In view of the investment required, on the other hand, this may be the province of the larger organisations. It also requires special personnel, with expert skills and knowledge, and will usually (even in the case of larger companies) demand the employment of an outside agency; for example one that specialises in 'lobbying' politicians.

In many of these fields it will be top management who have, and build upon, the most important contacts; but the corporate PR function should co-ordinate and support (indeed 'nourish') these. It should be assumed, incidentally, that lobbying is best handled in house (or by agencies employed directly). Some trade associations (particularly those of the professions and farming) are powerful lobbyists; but rather more are not. In any case, the lobbying (and power struggles) within trade associations, to capture their 'votes' for 'interested groups', often mean that individual members may find their interests not represented (and sometimes opposed!).

The first task of corporate PR is to determine what 'issues', relevant to the future of the organisation, are likely to emerge over the next few years. As in 'scanning' the environment (of which it is a specialised element) this is not an easy task. It can, in this case, be more directly based upon opinion research - though this may be expensive (particularly where it has to be carried out world-wide - since issues will vary from country to country). Alternatively, it can be obtained by buying syndicated reports from the specialist consultancies (such as the Henley Centre for Forecasting or Stanford Research Institute, SRI). Such research is important, in that the effectiveness of PR decreases rapidly over time as an issue builds up. It is much more effective to 'nip it in the bud' before it develops:

As you can see, this is described as the Rule of 10s - since the amount of effort needed to rectify the situation increases by a factor of 10 at each stage.

It is recommended, however, that no more than 10-20 issues  are 'managed' at any one time; more than this will simply cause confusion and spread effort too thinly. More rigorous methods for forcing these issues to emerge may be used, but the most generally reported view is that they emerge by 'osmosis' - based on discussions, over time, by the experts involved.

Once the issues have 'emerged', it is important to try and understand them; and, in particular, to obtain political input on their perceived importance. It is also important to start 'lobbying' (possibly on an international scale) as soon as possible.

SALES PROMOTION

Using the British terminology, sales promotion is normally an adjunct to personal selling or advertising; usually of products, but some techniques can also be applied to services. It is very different to the promotional techniques which have been described so far, in the terminology of investment, since it is generally a short-term activity which can justifiably be considered an operating cost rather than an investment. It is typically directed towards sales force, distribution channels, or consumers, or some combination of these groups in order to stimulate some specific action in the short term.

It covers a wide range of possibilities, but its essence is that it is intended as a very short term influence on 'sales'. It may thus be used as a powerful additional factor added to the competitive balance to sway current sales in the supplier's favour; and to bring forward sales, or even to generate extra sales. The main benefit, therefore, must usually be the (short term) increase in sales; but sales promotions can also be targeted to achieve specific objectives - to increase repeat purchase, to recruit specific competitors' customers etc.

Almost all their effect is immediate. There is rarely any lasting increase in sales and many of the costs, not least the management/sales force time and effort, are typically not accounted for in the reported direct costs. Worse, they can conflict with the main brand messages and confuse the customer as to what the image really is. It is believed, for instance, that Burger King's promotional activities, in its war with McDonalds at the end of the 1970s, may have actually had an unfavourable influence on consumers' brand perceptions!

Perhaps the most obvious disadvantage, which applies to many types of promotion, is that they in effect offer a price-cut; and this persuades users to expect a lower price in future - as well as, at the same time, potentially damaging any element of 'quality' in the image.

Their greatest disadvantage, though, may be their lack of effectiveness. Abraham & Lodish[1] report that "..only 16% of the trade promotion events we studied were profitable, based on incremental sales of brands distributed through retailer warehouses. For many promotions the cost of selling an incremental dollar of sales was greater than one dollar." They go on to record that, despite this, "..promotions have become so popular that they now account for more than 65% of typical marketing budgets." 

In line with its essentially short term nature, however, a promotion may sometimes be used very effectively to achieve certain limited objectives;

Thus, some effective promotions are expressly planned to induce trial purchases; the classic example being 'money-off coupons' distributed house to house (or in the press), or even samples of the product, at the time of the launch (again delivered door to door or 'banded' as a free gift on a related product).  

where the immediate aim is to obtain 'trial' by users - and a free sample offers just this (always presuming that the 'product' is demonstrably better than its competitors). It is normally used as one of the very early elements in a 'new product' launch, though, Schultz & Robinson[2] say "Sampling seems to work best for new products when it is preceded by four to six weeks of advertising. That generates interest which the sample then converts into trial." It is a very expensive promotional device; often less cost effective than any of the other forms of promotion. But it is the most effective, direct and immediate, way of obtaining consumer trial. Retailers also recognise its power to pull in customers, and it may accordingly also help to achieve distribution. It is often, indeed, combined with a money-off voucher, to ensure that a successful trial is rapidly followed by a purchase.

Other promotions are designed to stimulate the user's decision at point of sale; on-pack price-cuts are the obvious example. It may often be found that a cheaper alternative is to offer more of the product ('free 20% extra') for the same price. Yet others are meant to build repeat business; for example, 'money off next purchase' coupons. Perhaps the greatest number, though, are intended to only have an indirect effect; to provide additional interest (to differentiate the product) for an advertising campaign (for example free gifts, such as drinking glasses with petrol), or to obtain better display at point of sale (for example a competition, with the prize of a 'holiday in Hawaii', jointly run with a retailer), where it is the extra shelf space that sells the product, rather than the promotion itself.

It should be added that sales promotion and advertising (or, indeed, any of the other forms of promotion) are not mutually exclusive. In practice, they are complementary; and the most effective, well-balanced, campaign will often include a mix of several types of promotion (in particular, of advertising and sales promotion which tend to go hand in hand).

Sales promotions are almost always developed for their direct, and immediate, effect. Thus, each sales promotion can, and should, be set specific performance objective (usually additional sales - but possibly greater display at point of sale, though this too should lead to greater sales). The performance should be monitored to ensure that these objectives are attained, and as a basis for judging the usefulness of such promotions in similar future situations.

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