Public Relations and Sponsorship Programs Chapter 10

Public Relations To provide information to the public that reinforces a firms positioning and image. Can be used to change the public’s perception of a firm. This can be done internally or by an external firm.

F I G U R E 1 3 . 1 Public Relations Functions Identify internal and external stakeholders Assess the corporate reputation Audit corporate social responsibility Create positive image-building activities Prevent or reduce image damage

Public Relations Tools Newsletters Media news releases - positive or negative Websites Special events – sometimes tied to a cause Annual reports

Approaches to Public Relations Altruistic activities e.g. internally geared approach Cause-related marketing e.g. externally geared approach - charities, non-profit associations, etc.

Cause-Related Marketing This approach has many benefits: Intangible elements – goodwill and top of mind Increased business Can create a favourable image of the business/firm Can change consumers perceptions of the firm e.g., Wal-Mart - sustainability consortium

Cause-Related Marketing Consumer studies show that: 78% of consumers are more likely to purchase a brand associated with a cause they care about. 54% would be willing to pay more for a brand that is associated with a cause they care about – e.g. Fair trade coffee 66% would switch to support a particular cause 84% indicate that cause-related marketing creates a more positive image of a company. One issue with this approach is that a cause liked by one – disliked by another

F I G U R E 10 . 3 Improve public schools (52%) Causes Consumers Prefer Improve public schools (52%) Dropout prevention (34%) Scholarships (28%) Clean-up environment (27%) Community health education (25%) YWCA Web site: http://www.ywca.org

McDonald’s reminded the public of its support for the Olympics with a series of advertisements.

Green Marketing –a rallying cause? However consumers are not always willing to sacrifice: Price Quality Convenience Availability and Performance to become “Green”

What’s Happening? http://www.youtube.com/watch?v=8rP7umMjjxE http://www.youtube.com/watch?v=Sjl5_vDfiuM&sns=em – Australian Beer ad Final Exam final proposal/option

F I G U R E 1 0. 2 - edited Image Destroying Activities Examples of Socially Responsible/Irresponsible Activities Image Destroying Activities Image Building Activities Discrimination Harassment Pollution Misleading communications Deceptive communications Offensive communications Labour laws – GAP Inc. Empowerment of employees. Charitable contributions Sponsoring local events Selling environmentally safe products Outplacement programs Support community events Combining cause-related marketing as primary strategy - Dove

F I G U R E 1 0 . 7 Proactive Strategies Reactive Strategies Damage-Control Strategies Proactive Strategies Entitling – claim responsibility for positive outcomes Enhancements – creating desirable outcome in public’s eye Reactive Strategies Internet interventions Crisis management programs Apology Strategy Impression management techniques Damage control strategies can be divided into two categories based on the overall approach used – proactive strategies and reactive strategies. Proactive approaches try to prevent or reduce the chances of negative events through building a positive image through entitling and enhancements. Reactive strategies try to react to a negative situation through Internet interventions, crisis management programs, or impression management techniques.

Positive and Socially Responsible Marketing To maximize positive impact: Identify areas where the firm can make a positive difference – http://www.starbucks.com/aboutus/csr.asp Make sure local/international media are aware. Inform and involve employees. Invest in advertising and public relations to highlight the firm’s efforts – more and more popular.

Public Relations Strengths Weaknesses Reaching Elusive Audiences Image and Reputation Management Credibility Relatively Low Cost Relative Loss of Control Measurement Difficulties (Effectiveness)

Sponsorship Programs Objectives: Enhance company image Increase visibility Showcase a product To develop new customer relationships To get rid of excess inventory Sponsorships are a critical part of many firms IMC plans e.g. - http://www.budlight.ca/sponsorships.php

Event Marketing and Sponsorships Canada Environment (2.5%) Humanitarian (10%) Health (10%) Sports (45%) Education (10%) Cultural Events (20%) Source: “How Big is the Canadian Sponsorship Pie?” The Sponsorship Report (http://www.sponsorship.ca/p-issues-howbig.html)

Event Marketing and Sponsorships in North America Copyright © 2010 by Pearson Education, Inc. publishing as Prentice Hall

Approaches to Sponsorships A firm may choose to: Sponsor an individual Sponsor an event Other Specific group – i.e., school choir Real Property (naming rights) - http://www.forbes.com/2006/11/14/baseball-mets-citigroup-biz_cz_kb_1114naming_slide_2.html

Sponsoring an Individual What attributes do sponsors look for in endorsing an individual such as Danica Patrick or Sidney Crosby? Name recognition Current popularity Overall image Character

Sponsoring an Event Many factors to consider: Determine objective(s) – e.g.CIBC run for the cure Match event with customers Cross-promote event – e.g., with new products, etc. Maintain a consistent theme Track results Evaluate investment of event, and against other IMC tools