Friday, November 28, 2008

IMC Journal | Part 5.2

Jeff Bezos says that “A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well.” Thus to protecting and building reputation is critical for a company’s brand equity and this is the very reason why PR or Public Relations has become an integral part of any Integrated Marketing Communication. The formal definition of PR: “ Public Relations (PR) is the practice of managing the flow of information between an organization and its publics.” [Grunig, James E. and Hunt, Todd. Managing Public Relations. (Orlando, FL: Harcourt Brace Jovanovich, 1984), 6e.]

Wiki adds that ”PR gains an organization or individual exposure to their audiences using topics of public interest and news items that do not require direct payment. Because public relations places exposure in credible third-party outlets, it offers a third-party legitimacy that advertising does not have. Common activities include speaking at conferences, winning industry awards, working with the press, and employee communication.”

This is very much in line with the class discussion of PR where we discussed the two roles of PR:
1. Crisis Manager
2. Reputation Custodian
In its the first role as a Crisis Manager, as the oft-quoted J&J Tyrannol case, PR helps to protect brand equity. This type of PR is used to diffuse WMD aka WOM Crisis Elevation (as Ramanujam Sridhar writes in his book “One Land One Million Minds” – a great read with fantastic examples in the Indian context). In India in fact PR is still used primarily if a company has a problem as seen from the case of Cadbury with their worm in chocolate problem or the Cola Twin – Coke & Pepsi – with their pesti-cola problem. Interesting, sometimes brands create controversies to remain relevant – Indian micro-celebs seem to engage in such activities the most – ala Rakhi Sawant.

PR extensively uses the leverages the power of the press and thus is extensively used during M&As - by both the aquirer and aquiree to up their brand worth - as can be seen during the Tata-Jaguar+Land Rover case. In fact, the Tata Corporate Brand is almost entirely built on PR.
In its other role as a reputation custodian, it is most often used by…
• Hotels. Politicians, Celebrities ,etc. to guard against loss of face / reputation
• Industry bodies such as FICCI and CII to leverage their sectors
• Companies to build their CSR brand (Ms. Meena Galliara would balk at this)
• Companies building up for IPOS
Also, Celebrity endorsement is also often done through PR (as per contractual terms) in a public forum – Oprah Winfrey advocating the benefits of a slimming pill is an instance of such PR.