Public relations describes the various methods a company uses to disseminate messages about its products, services, or overall image to its customers, employees, stockholders, suppliers, or other interested members of the community. The point of public relations is to make the public think favorably about the company and its offerings. Commonly used tools of public relations include news releases, press conferences, speaking engagements, and community service programs.
Although advertising is closely related to public relations—as it too is concerned with promoting and gaining public acceptance for the company's products—the goal of advertising is generating sales, while the goal of public relations is generating good will. The effect of good public relations is to lessen the gap between how an organization sees itself and how others outside the organization perceive it.
Public relations involves two-way communication between an organization and its public. It requires listening to the constituencies on which an organization depends as well as analyzing and understanding the attitudes and behaviors of those audiences. Only then can an organization undertake an effective public relations campaign.
Many small business owners elect to handle the public relations activities for their own companies, while others choose to hire a public relations specialist. Managers of somewhat larger firms, on the other hand, frequently contract with external public relations or advertising agencies to enhance their corporate image. But whatever option is chosen, the head of a company is ultimately responsible for its public relations.
GOALS OF PUBLIC RELATIONS
Some of the main goals of public relations are to create, maintain, and protect the organization's reputation, enhance its prestige, and present a favorable image. Studies have shown that consumers often base their purchase decisions on a company's reputation, so public relations can have a definite impact on sales and revenue. Public relations can be an effective part of a company's overall marketing strategy. In the case of a for-profit company, public relations and marketing should be coordinated to be sure they are working to achieve the same objectives.
Another major public relations goal is to create good will for the organization. This involves such functions as employee relations, stockholder and investor relations, media relations, and community relations. Public relations may function to educate certain audiences about many things relevant to the organization—including the business in general, new legislation, and how to use a particular product—as well as to overcome misconceptions and prejudices. For example, a nonprofit organization may attempt to educate the public regarding a certain point of view, while trade associations may undertake educational programs regarding particular industries and their products and practices.
STEPS IN A PUBLIC RELATIONS CAMPAIGN
Effective public relations requires a knowledge, based on analysis and understanding, of all the factors that influence public attitudes toward the organization. While a specific public relations project or campaign may be undertaken proactively or reactively (to manage some sort of image crisis), the first basic step in either case involves analysis and research to identify all the relevant factors of the situation. In this first step, the organization gains an understanding of its various constituencies and the key factors that are influencing their perceptions of the organization.
In the second step, the organization establishes an overall policy with respect to the campaign. This involves defining goals and desired outcomes, as well as the constraints under which the campaign will operate. It is necessary to establish such policy guidelines in order to evaluate proposed strategies and tactics as well as the overall success of the campaign.
In step three, the organization outlines its strategies and tactics. Using its knowledge of the target audiences and its own established policies, the organization develops specific programs to achieve the desired objectives. Finally, step four involves actual communication with the targeted public. The organization then employs specific public relations techniques, such as press conferences or special events, to reach the intended audience.
In step five the organization receives feedback from its public. How have they reacted to the public relations campaign? Are there some unexpected developments? In the final step, the organization assesses the program and makes any necessary adjustments.
AREAS OF PUBLIC RELATIONS
Public relations is a multifaceted activity involving different audiences as well as different types of organizations, all with different goals and objectives. As a result, there are several specific areas of public relations.
PRODUCT PUBLIC RELATIONS Public relations and marketing work together closely when it comes to promoting a new or existing product or service. Public relations plays an important role in new product introductions by creating awareness, differentiating the product from other similar products, and even changing consumer behavior. Public relations can help introduce new products through staging a variety of special events and handling sensitive situations. For example, when the Prince Matchabelli division of Chesebrough-Pond's USA introduced a new men's cologne, there were twenty-one other men's fragrances being introduced that year. To differentiate its new offering, called Hero, Prince Matchabelli created a National Hero Awards Program honoring authentic male heroes and enlisted the participation of Big Brothers/Big Sisters of America to lend credibility to the program. Similarly, when Coleco introduced its Cabbage Patch Kids dolls, public relations helped increase awareness through licensed tie-in products, trade show exhibits, press parties, and even window displays in Cartier jewelry stores.
Public relations is often called on to give existing products and services a boost by creating or renewing visibility. For example, the California Raisins Advisory Board organized a national tour featuring live performances by the California Dancing Raisins to maintain interest in raisins during a summer-long advertising hiatus. The tour generated national and local publicity through media events, advance publicity, trade promotions, and media interviews with performer Ray Charles. Other public relations programs for existing products involve stimulating secondary demand—as when Campbell Soup Co. increased overall demand for soup by publishing a recipe booklet—or identifying new uses for the product. Public relations can interest the media in familiar products and services in a number of ways, including holding seminars for journalists, staging a special media day, and supplying the media with printed materials ranging from "backgrounders" (in-depth news releases) to booklets and brochures. Changes in existing products offer additional public relations opportunities to focus consumers' attention. An effective public relations campaign can help to properly position a product and overcome negative perceptions on the part of the general public.
EMPLOYEE RELATIONS Employees are one of the most important audiences a company has, and an ongoing public relations program is necessary to maintain employee good will as well as to uphold the company's image and reputation among its employees. The essence of a good employee relations program is keeping employees informed and providing them with channels of communication to upper levels of management. Bechtel Group, a privately held complex of operating companies, published an annual report for its employees to keep them informed about the company's operations. The company used surveys to determine what information employees considered useful. A range of other communication devices were used, including a monthly tabloid and magazine, a quarterly video magazine, local newsletters, bulletin boards, a call-in telephone service, and "brown bag" lunches where live presentations were made about the company. Suggestion systems are another effective way to improve employee-management communications.
Other public relations programs focusing on employees include training them as company public relations representatives; explaining benefits programs to them; offering them educational, volunteer, and citizenship opportunities; and staging special events such as picnics or open houses for them. Other programs can improve performance and increase employee pride and motivation. Public relations can also play a role in recruiting new employees; handling reorganizations, relocations, and mergers; and resolving labor disputes.
FINANCIAL RELATIONS Financial relations involves communicating not only with a company's stockholders, but also with the wider community of financial analysts and potential investors. An effective investor relations plan can increase the value of a company's stock and make it easier to raise additional capital. In some cases special meetings with financial analysts are necessary to overcome adverse publicity, negative perceptions about a company, or investor indifference. Such meetings may take the form of full-day briefings, formal presentations, or luncheon meetings. A tour of a company's facilities may help generate interest among the financial community. Mailings and ongoing communications can help a company achieve visibility among potential investors and financial analysts.
Annual reports and stockholder meetings are the two most important public relations tools for maintaining good investor relations. Some companies hold regional or quarterly meetings in addition to the usual annual meeting. Other companies reach more stockholders by moving the location of their annual meeting from city to city. Annual reports can be complemented by quarterly reports and dividend check inserts. Companies that wish to provide additional communications with stockholders may send them a newsletter or company magazine. Personal letters to new stockholders and a quick response to inquiries insure an additional measure of good will.
COMMUNITY RELATIONS A comprehensive, ongoing community relations program can help virtually any organization achieve visibility as a good community citizen and gain the good will of the community in which it operates. Banks, utilities, radio and television stations, and major retailers are some of the types of organizations most likely to have ongoing programs that might include supporting urban renewal, performing arts programs, social and educational programs, children's programs, community organizations, and construction projects. On a more limited scale, small businesses may achieve community visibility by sponsoring local sports teams or other events. Support may be financial or take the form of employee participation.
Organizations have the opportunity to improve good will and demonstrate a commitment to their communities when they open new offices, expand facilities, and open new factories. One company increased community awareness of its presence by converting a vacant building into a permanent meeting place. Another company built its new headquarters in an abandoned high school that it renovated. One of the more sensitive areas of community relations involves plant closings. A well-planned public relations campaign, combined with appropriate actions, can alleviate the tensions that such closings cause. Some elements of such a campaign might include offering special programs to laid-off workers, informing employees directly about proposed closings, and controlling rumors through candid and direct communications to the community and employees.
Organizations conduct a variety of special programs to improve community relations, including providing employee volunteers to work on community projects, sponsoring educational and literacy programs, staging open houses and conducting plant tours, celebrating anniversaries, and mounting special exhibits. Organizations are recognized as good community citizens when they support programs that improve the quality of life in their community, including crime prevention, employment, environmental programs, clean-up and beautification, recycling, and restoration.
CRISIS COMMUNICATIONS Public relations practitioners become heavily involved in crisis communications whenever there is a major accident or natural disaster affecting an organization and its community. Other types of crises involve bankruptcy, product failures, and management wrongdoing. In some cases, crises call for an organization to become involved in helping potential victims; in other cases, the crisis may require rebuilding an organization's image. In any case, experts recommend that business owners prepare a plan in advance to deal with potential crises in an honest and forthright manner. The main objective of such a plan is to provide accurate information quickly in order to reduce uncertainty. After the San Francisco earthquake of 1989, for example, the Bank of America utilized its public relations department to quickly establish communications with customers, the financial community, the media, and offices in 45 countries to assure them the bank was still operating.
GOVERNMENT AND POLITICAL RELATIONS 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 speakers bureau trained some 240 industry volunteers, and key messages were communicated to the public through printed materials and radio and television commercials.
PUBLIC RELATIONS IN THE PUBLIC INTEREST
Organizations attempt to generate good will and position themselves as responsible citizens through a variety of programs conducted in the public interest. Some examples are environmental programs (including water and energy conservation) and antipollution programs. Health and medical programs are sponsored by a wide range of nonprofit organizations, healthcare providers, and other businesses and industries. These range from encouraging other companies to develop AIDS-in-the-workplace policies to the American Cancer Society's Great American Smokeout. Other programs offer political education, leadership and self-improvement, recreational activities, contests, and safety instruction.
CONSUMER EDUCATION Organizations have undertaken a variety of programs to educate consumers, building good will and helping avoid misunderstandings in the process. Opportunities for educating consumers might include sponsoring television and radio programs, producing manuals and other printed materials, producing materials for classroom use, and releasing the results of surveys. In addition to focusing on specific issues or industries, educational programs may seek to inform consumers about economic matters and business in general.
OTHER PUBLIC RELATIONS PROGRAMS Other types of programs that fall under the umbrella of public relations include corporate identity programs, ranging from name changes and new trademarks to changing a company's overall image. Special events may be held to call attention to an organization and focus the public's good will. These include anniversary celebrations, events related to trade shows, special exhibits, or fairs and festivals. Speakers bureaus and celebrity spokespersons are effective public relations tools for communicating an organization's point of view. Speakers bureaus may be organized by a trade association or an individual company. The face-to-face communication that speakers can deliver is often more effective than messages carried by printed materials, especially when the target audience is small and clearly defined.
PUBLIC RELATIONS FOR SMALL BUSINESSES
Like other types of organizations, small businesses can benefit from public relations in terms of their relationships with customers, employees, investors, suppliers, or other interested members of the community. Since small business owners are the most visible representatives of their own companies, they frequently handle many of the public relations functions themselves. But experts caution small business owners against taking on this responsibility if they are unqualified, or if they are unable to give public relations the attention it deserves. In these cases, entrepreneurs may choose to hire a public relations specialist or contract with an outside agency.
In his book Public Relations for the Entrepreneur and the Growing Business, Norman R. Soderberg outlines the main qualifications for public relations professionals. An ideal candidate would be creative and enterprising, possess good communication skills and solid news judgment, have a thorough knowledge of the business, be sincere and considerate in dealing with people, and make a good impression as a representative for the company. Some of the skills required in public relations work include writing and editing, public speaking, graphic arts, public opinion polling, and advertising. The responsibilities of a public relations executive include interpreting public opinion, advising management, generating opportunities to increase public awareness and acceptance, disseminating good publicity, and evaluating the results of campaigns. In order to perform these duties effectively, the public relations professional must know what is going on in the business, which means that he or she requires access to management.
"Most companies need to seek outside help from a public relations agency at some point," Chad Kaydo wrote in Sales and Marketing Management. "Even if staff members handle most of your PR efforts, an independent firm can assist with a special project, or give occasional advice." There are a variety of reasons why a small business owner might decide to contract public relations work out to an external agency. For example, company personnel may be inexperienced in handling public relations; the company may be geographically distant from its main audiences; the company may not be able to afford to hire a full-time public relations executive with the needed skills; or the company may want the objective judgment of an outsider. A small business owner can locate reputable public relations firms through the Small Business Administration, the Public Relations Society of America, the trade press for their industry, or the recommendations of fellow business people or local news people. When choosing between several potential agencies, a small business owner should consider those that have experience in the industry, clients in similar industries, financial stability, and a compatible overall philosophy. Contracting with an outside firm can be costly—some charge their clients a monthly retainer, while others charge straight hourly rates for limited services.
While communication is the essence of public relations, an effective public relations campaign is based on action as well as words. Whether it is practiced formally or informally, public relations is an essential function for the survival of any organization. Small business owners cannot afford to neglect public relations. But lavish parties and gifts are not necessary—it is possible to vastly improve a small business's image within its community while also controlling public relations expenditures. Sponsoring a local softball team, speaking at a chamber of commerce meeting, and volunteering at a neighborhood clean-up are among the wide variety of public relations activities readily available to small businesses.