Public relations and sponsorship - Marketing Management

Recent years have witnessed an increasingly professional approach to managing this area of marketing communications. Public relations (PR) has replaced the term ‘publicity’ for this type of promotion. Publicity, somewhat confusingly, is often used to denote these activities. PR is a broader concept than publicity as it relates to more strategic issues. Sponsorship can be included as a promotional category in its own right or sometimes as a sales promotion technique. We feel that because sponsorship is normally associated with promoting the company’s image and name amongst its publics, it is most appropriately considered alongside other PR activities. We now outline the main issues in managing these elements of the promotional mix.

Public relations (PR)

PR’s concern is to promote the image of a company, its products and services. Unlike other promotional activities, PR does not necessarily involve the company in direct costs e.g. the company may issue a press release with a view to having its contents published free if the publisher feels it is sufficiently newsworthy or interesting to their readers. News items that are generated through this means tend to be more ‘believable’ than ‘paid for’ advertising, so from the company’s point of view it can be very effective. The fact that it is sometimes not paid for does not mean it is unimportant, not to be integrated with other elements of a company’s promotional mix. The old adage that there is ‘no such thing as bad publicity’ is simply not true. Bad publicity can seriously affect a company’s image and sales.

The launch of the now highly successful Mercedes ‘A’ Class model was marred by bad publicity. The so-called ‘moose test’ conducted in Sweden in 1997 by the journalist Robert Collin from the motor magazine Teknikens Värld was designed to test the ease with which a new model could be steered around an object such as a moose appearing on the highway. The test showed that in its original design form the ‘A’ Class was susceptible to rolling over. The tests and the failure of the ‘A’ Class to pass them made worldwide news as the test was done independently. To make the situation worse, a much older widely mocked design of Trabant car, from the former German Democratic Republic, managed the test perfectly. In short, publicity for the safety-conscious and highly respected engineering image of Mercedes was a disaster. The product had to be recalled and redesigned.

Public relations tools include:

  • Press release, which is basically news that a company issues in objective, journalistic form in the hope that it will be printed in the form in which it is received by the editor.
  • Press conference, a meeting where a major announcement is made and at which guests are invited to ask questions. A press conference may be given in preference to a press release if the matter under review merits some explanation which may not be covered adequately in the press release itself.
  • Press receptions (not a substitute for a press release). It is at press receptions, which are major events in themselves, that important announcements are made e.g. a new model of car. Such receptions need to be well planned and guests receive ‘programme invitations’. A press reception is not as formal as a press conference as it is normally done in a more relaxed and sociable manner usually accompanied by some kind of hospitality.
  • Facility visits, where representatives, often including the media, are given the opportunity to inspect some special aspects of a firm’s operations. A visit may involve a tour around a new factory.

Effective PR management requires building up good and trusting relationships with opinion leaders, especially in the press and magazines. Publicity is a tactical tool within the broader framework of PR. PR is a deliberate, planned and sustained effort to establish and maintain mutual understanding between an organization and its publics. In this context PR has a wider role to play than simply publicity as illustrated below when we examine what is termed ‘the publics of PR’:

  • Community activities are where the organization acts in support of local and national activities and partakes in the development of a community relations programme.
  • Employee relations is an important internal aspect of PR as there are benefits involving the workforce in terms of establishing and maintaining a mutual understanding.
  • Government relations: both local and national politicians are important sources of information for an organization e.g. legislative changes that might affect the business; lobbying politicians is not without criticism, but it is a perfectly acceptable procedure in industry and government relationships.
  • The financial community involves commercial and merchant banks, investors and share analysts as well as city journalists who are all ‘publics’ with whom an organization needs to communicate in the context of financial matters.
  • Distributors are intermediaries in the distribution channel and these include wholesalers, retailers, agents, brokers, dealers, etc. They all need information about products and services to have the knowledge and confidence necessary to become effective resellers.
  • Consumers are often though of as the only ‘public’ and they need to be co-ordinated with other areas of marketing communications like advertising and sales promotion. Educating consumers and creating and maintaining interest among target audiences can lead to favourable attitudes being generated towards a company’s products and services.
  • Opinion leaders include trade associations and pressure groups. PR must attempt to understand the position of all important external groups, even if the group is opposed to them. If effective communication through PR takes place, it is better for factual information to be the basis of debate rather than hearsay or exaggeration.
  • Media Here PR has a role to play in the development of relationships with the broadcasting media. As mentioned already, the aim is to achieve appropriate broadcasting of information a company may create as part of a well organized PR campaign.

Recognition of the communications role of PR is – it means that it is seen as a sub-set of marketing communications planning with clear marketing communication objectives for PR, well managed campaigns and effective evaluation and control.

Sponsorship in Public Relations

Sponsorship is sometimes viewed as being a sales promotional activity, but it should be considered as a component of PR. It involves a company supporting in some way something or someone it feels will help in the overall marketing and sales of its products or services, albeit indirectly. The ‘something’ or ‘someone’ being sponsored can be a sportsperson, or an event like the Olympics, or a cause such as Aids prevention.

Commercial sponsorship has been a rapidly growing area of promotion. There are many reasons for this. The sponsoring of a particular event or person enables the sponsor to achieve more costeffective awareness with the target audience generated by the event, or by the publicity associated with the individual, than might otherwise be possible through conventional promotional tools like advertising. Millions watched the March 2009 Oxford–Cambridge University boat race on Independent Television, which is a large audience for any sponsor whose name might be attached to one of the boats for a relatively modest outlay. Who cares about it? ITV’s 7.6 million peak viewers, plus more than 100 media people and 250,000 spectators lining the towpath in one of London’s largest annual public events. In a wider context, 112 countries requested film of the race to screen live or as highlights for an estimated 200 million people around the world.

Large investments are made by marketers on event and celebrity endorsement contracts. Tripp and Jensen24 have suggested that the use of such promotion is based on the premise that source effects (i.e. the celebrity her- or himself) play an important role in persuasive communication. They give examples of the impact of such endorsement on sales. Michael Jordan, the US basketball star, signed a multi-million pound sponsorship contract with Nike and the company’s market share increased by 20 per cent over the previous quarter. However, their research points to the possible detrimental effects of celebrities becoming involved in promotion, especially when the celebrity is involved in multiple product advertising. It is suggested that too many endorsements might damage credibility which may have a negative impact on sales. Sponsorship based on celebrity endorsement in particular is not a panacea for marketers. Another risk associated with using celebrities is that if, for some reason, the reputation or image of the celebrity becomes ‘tarnished’, this may have a detrimental effect on the sponsor’s image.

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