13-1 Public Relations, Regulations and Sponsorship Programs 13 Public relations –Role of public relations –Social responsibility Regulating marketing communication –Federal Trade Commission –Industry regulations Sponsorship marketing Chapter Overview

13-2 Sponsorships and Causes What do you think about the WWF and the companies that sponsor it? Should companies be involved in sponsoring sporting events, rodeos and music events? Should companies contribute or participate in social causes such as the American Cancer Society? Would you switch brands based on causes the company or brand supports? How do you feel about the naming of sports stadiums by companies? 13 Discussion Slide

13-3 Monitor internal and external publics. Provide positive information to each public that reinforces the IMC plan. React quickly to any shift by any of the publics from the desired position. F I G U R E Public Relations Functions

13-4 Employees Unions Management Shareholders Channel members Customers Media Local community Financial community Special-interest groups Government F I G U R E Stakeholders of Public Relations

13-5 Employees need to be aware of what is being said in advertisements and on the Internet. Motorola’s Web site

13-6 Public Relations Events Altruistic activities Cause-related marketing Benefits of supporting causes Additional customers Increased profits Goodwill Better relations with governmental agencies Green marketing

13-7 Cause-Related Marketing Support of a social cause through financial transactions with the firm’s customers. Cause-related marketing studies: 83% of consumers have a more positive image of companies that support causes the customer cares about. Most Americans believe companies should have a positive impact on environment and community. 76% willing to switch to a brand that supports a cause they believe in if price and quality perceived equal. National vs local causes Impact greater if the firm can utilize its products in the social cause.

13-8 YWCA Web site: Improve public schools (52%) Dropout prevention (34%) Scholarships (28%) Cleanup environment (27%) Community health education (25%) F I G U R E Causes Consumers Prefer

13-9 McDonald’s reminded the public of its support for the Olympics with a series of advertisements.

13-10 Corporate newsletters Internal communications Media news releases Stockholder correspondence Annual reports Special events F I G U R E Public Relations Tools

13-11 Regulating Marketing Communications Unfair and deceptive marketing practices Lanham Act (1947) An advertisement or communication is deceptive or misleading if: A substantial number of people or “typical person” is left with false impression or misrepresentation. The misrepresentation induces people or the “typical person” to make a purchase. Deception vs puffery

13-12 Federal Trade Commission (FTC) Food & Drug Administration (FDA) Federal Communications Commission (FCC) US Postal Service (USPS) Bureau of Alcohol, Tobacco and Firearms (BATF) F I G U R E Governmental Regulatory Agencies

13-13 Federal Trade Commission (FTC) Created in 1914 by passage of Federal Trade Commission Act. Original intent was to enforce anti-trust laws. FTC authority expanded in 1938 with Wheeler-Lea Amendment. Given power to stop unfair and deceptive advertising practices. Granted FTC access to courts to enforce their decisions.

13-14 How an FTC investigation begins Consumers Businesses Congress Media Complaints can be lodged by any of the following

13-15 FTC Actions Consent order Administrative complaint Cease and desist order Full commission hearing Appeal to U.S. Court of Appeals Corrective advertising order Trade regulation ruling

13-16 FTC Criteria Is the typical person misled by the marketing communication? Does the marketing communication lead the typical person to make a purchase or pursue some other type of activity? Is the claim mere puffery or does it have to be substantiated? Is the claim substantiated by competent or reliable evidence?

13-17 To substantiate its claim that Kleenex is softer the company conducted touch tests involving consumers. Substantiating that Kleenex is “made with 24% more cottony, soft fiber,” as the ad claims, would require some type of lab test. Click image to enlarge.

13-18 Better Business Bureau National Advertising Division (NAD) National Advertising Review Board (NARB) F I G U R E Industry Regulation

13-19 Sponsorship Marketing Objectives Enhance company image. Increase firm visibility. Differentiate a company or brand. Showcase specific goods or services. Develop a closer relationship with current and prospective customers.

13-20 Event Marketing and Sponsorships United States Source: “Event Marketing/Sponsorships,” Public Relations Society of America Sports Marketing $3.84 billion 65% Entertainment Tours $650 million (11%) Festivals & Fairs $558 million (9%) Causes $535 million (9%) Arts & Cultural Events $354 million (6%)

13-21 Event Marketing and Sponsorships Canada Source: “How Big is the Canadian Sponsorship Pie?” The Sponsorship Report ( Sports (45%) Cultural Events (20%) Education (10%) Health (10%) Humanitarian (10%) Environment (2.5%)

13-22 What is the likelihood that a fan will buy a sponsor’s product? NASCAR72% Tennis52% Golf47% NBA38% NFL36% Source: “Event Marketing/Sponsorships,” Public Relations Society of America (

13-23 INTEGRATED LEARNING EXPERIENCE STOP Performance Research IEG Sponsorship BDS Sponsorships, Ltd. (Europe) Firms specializing in helping businesses maximize their sponsorship investments.

13-24 Sponsoring Individuals Name recognition68% Current popularity56% Overall image53% Character51% Source: “Event Marketing/Sponsorships,” Public Relations Society of America What attributes do sponsors look for in endorsing an individual such as Tiger Woods?

13-25 To Maximize Event Marketing Determine objective. Match event with customers, vendors and employees. Cross-promote event. Include company in all event advertising and brochures. Track results. Evaluate the investment following the event.

13-26 Event Marketing