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Why Companies Use Public Relations

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  • 0:11 Public Relations
  • 1:17 Publicity
  • 2:24 Public Relation Tools
  • 5:12 Lesson Summary
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Lesson Transcript
Instructor: Jennifer Lombardo
This lesson covers the reasons why companies use public relations as part of their promotional mix. Discover different public relations tools that you have likely seen everyday.

Public Relations

In 2012, a Chrysler social media consultant tweeted, 'I find it ironic that Detroit is known as the #motorcity and yet no one here knows how to ******* drive.' Unfortunately, the consultant thought he was tweeting on his personal account. Little did he know that he was sending out the tweet on Chrysler's business Twitter account. This is a recent and strong example of a negative public relations event. Chrysler fired the social media firm and then had to deal with repairing their image with their customers.

Companies spend enormous amounts of time and money crafting positive images of their business, employees, and products. Public relations is the element in the promotional mix that evaluates public attitudes, identifies issues that may elicit public concern and executes programs and acceptance. Along with advertising, sales promotion, and personal selling, public relations is a very important part of the promotional mix. The public relation corporate campaign's ultimate goal is to create a positive image of the company or product.

Public relations is a key element in the promotional activities of a company.
Public Relations Promotion Mix

Publicity

Publicity is public information about a product, service, or company that appears in newspapers, magazines, radio, social media, or television. Publicity is not paid for by the company and can create massive goodwill. For example, in 1996 Taco Bell played an April Fools prank by placing a simple ad in the New York Times paper. The ad stated that Taco Bell had purchased the Liberty Bell and would be renaming it the Taco Liberty Bell. Thousands of people called in to the Philadelphia home of the Liberty Bell to complain. Interestingly though, Taco Bell did receive a huge free positive publicity push from the stunt as well. Over 650 print media and 400 broadcast outlets ran with the story and provided a reach of over 70 million Americans. The final result was an increase in revenue of over $1.0 million dollars in the next two days versus the previous week. So even though Taco Bell paid for a simple ad, the result was millions of dollars worth of free media coverage.

Public Relation Tools

Public relations professionals use many different tools to help promote a company's marketing objectives. Sponsorships, consumer education, product placement, new product publicity, and Internet web sites are all ways that can help make the marketing mix effective. Let us use the Ninja Corporation to illustrate an example of each of the tools.

Sponsorships occur when companies pay to support an event or cause. The sponsorship should fit with the overall marketing plan and increase consumer brand awareness and interest. For example, our Ninja Corporation has decided to sponsor the martial arts festival in their local town. They have donated $5,000 to have the name of the festival be Ninja Corp Martial Arts Festival and will give away ninja scarves to all participants with the company logo. This should result in positive word of mouth and awareness about their product line.

Consumer education is when companies offer free instruction or material to help educate consumers about their product or category. For example, the Ninja Corporation could offer free introductory sword classes to young ninjas. This would benefit the company because they would get free publicity, the community would be happy, and they would be cultivating potential customers in the youth of the area.

New product publicity is when companies try to feature their new products in free news stories to attain media coverage and excellent word of mouth. An example would be if the CEO of the Ninja Corporation went on a local news show to explain why their new hideouts are superior to the competition. She could speak about how their hideouts offer brand new technology and improved safety additions.

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