Main Aspects of Public Relations - Coursework Example

PUBLIC RELATIONS PUBLIC RELATIONS Introduction Public relations is now a necessity for all thebusiness organizations because of its increasing impact on the profitability of a firm. Having a good reputation of an organization can significantly benefit the firm where as a negative image can markedly decrease the sales of the organization. Another important factor is crisis management. Because of the increased uncertainty, it is required that all organizations stay prepared to face any crisis and handle it well without destroying the image of the firm. When an organization is not prepared for crisis, its reaction to the crisis is slow and unorganized, which ruins the public image of the firm. Public relations make sure that there is no communication gap between the consumers, employees, and the organization. However, the most important part of public relations remains reputation management because without a good reputation, the failure of the organization is inevitable. Reputation Management and Public Relations The main purpose of business organizations is to maximize its profit and create as much value for its shareholders as possible. Business organizations believe that “money now is more important than money later” (CIPR 2010). Business organizations mainly focus on making profit at any cost. Public Relation is a very important part of business because it advocates building reputation and relationship with the customer which can lead an organization to profit (Horton 2005). PR focuses on the future and how to increase the loyalty of the customer to the organization. The PR makes an effort to maintain a good image of an organization with the public and its customers. The concept of public relations gained much attention in the past two decades because its importance was realized by many organizations. The concept of reputation management is relatively new to the business world. It is now becoming increasingly important for business managers to maintain an ideal “image” of their brand to keep the customers coming. Reputations management has often been referred to as the “engineer of public consent”, “developer of goodwill”, builder of public opinion”, “perceptions manager”, etc (Hutton 1999). According to the UK’s Charted Institute of Public Relations, “public relations is about reputation – the result of what you do, what you say, and what others say about you”. Public relations is a discipline which looks after reputation, with the aim of earning understanding and support and influencing opinion and behaviour. It is a planned and sustained effort to establish and maintain goodwill and mutual understanding between an organization and its publics” (CIPR 2010, pp.1). According to this definition, public relations is all about maintaining ones reputation to increase profitability and nothing else. This definition has received much criticism because of its lack of consideration of other factors related to public relations such as effective management of relationships with the stakeholders. Many scholars and experts refuse to accept reputation management as the most important part of public relations. They believe that “the rise of…reputation management, perception management and image management appears to be an ominous trend for the field, partly because they have come into favour for most of the wrong reasons: the tendency of managers who lack training in public relations to think in superficial terms like image and perception, the large number of major public relations firms that are owned by advertising agencies, who tend to be more comfortable with such terms; and the desire to bury the negative connotations of public relations, once and for all” (Hutton 1999). Moreover, it is said that it is not possible to directly manage things like reputation and perception since they are universal and are an outcome of the actions taken by an organization or an individual (Horton 2005, pp.3). Public relations is actually the “management of communication between an organization and its publics” (Grunig 2010). Good reputation of an organization can only be achieved when there is good communication between the organization and public. When an organization is able to inform its publics what it is doing properly, the image of the organization will automatically improve. Reputation Management and Contemporary Organizations Whatever the scholars say, in the end public relations is all about maintaining the relationship of a firm with the public to eliminate miscommunication between the two and to maintain a good public image. Since the purpose of maintaining public relations is to put forth a good public image, it is not completely wrong to refer to public relations as “reputation management”. Reputation management is the most important part of an organization because it is not possible for a firm with a bad image to gain any profit. When an organization goes through a period of bad reputation, it the responsibility of the public relations department to bring the firm back to its original position. When reputation management is not done properly, the image of a firm can transform overnight. The example of British Petroleum can be taken to elaborate this point. Before the Gulf of Mexico oil spill, British Petroleum was one of the best reputed oil companies of the world. Especially since it took the initiative of going green, it was being accepted even by the environmentalists. But after the oil spill, the company has received a lot of criticism and is looked down upon by environmentalists and other individuals as well. The incident had a lot of negative impact on the image of the company. It took the company a long time to portray itself as “green” and convince environmentalists that the company is eco-friendly. But the oil spill tarnished its image in just a few hours. The response of British Petroleum is worth noting because reputation management was one of the first things it chose to maintain after the oil spill. The company launched an official YouTube channel, along with a page on Facebook, Twitter, and Flickr, to make sure that people know the effort that were being made by the company to control the damage done (Jarboe 2010). The cost of the official YouTube channel was about 250,000 U.S. Dollars (Jarboe 2010, pp.7), which shows the importance of reputation management of the company. Reputation management is important for any business organization because the reputation of a firm decides the future of profit of the organization. If an organization is unpopular among its customers, the customers will avoid using the services and product of that brand and pick something which they believe is well reputed. British Petroleum spent a lot on the damage control of the oil spill but it also spent a significant amount on its reputation management which helped the company survive this terrible incident. Organizations today are well aware of the importance of reputation management and this is the main reason why most of the organizations spend a large sum of money on advertisement to maintain a good image. The quick response of British Petroleum to the Gulf of Mexico oil spill proves that without reputation management, the firm can become very weak. Other contemporary organizations also use online management tools to maintain their reputations. A study conducted by Hutton et al. reveal that media relations is valued most by organizations for their reputation management and was listed by 96 per cent of the participants (Hutton, et al. 2001, pp.3). Other things included in the corporate communication budgets included “crisis communications; the budget for outside PR agencies; employee communications; Editorial services; Corporate advertising; etc (Hutton, et al. 2001, pp.3). The study also revealed that companies that spent more on corporate communications had a better public image and were more admired than the firms that spent less on corporate communications and Top 200 firms on the Fortune most-admired list spent 11 million U.S. Dollars on an average on corporate communication while the bottom 200 spent about one million U.S. Dollars (Hutton, et al. 2001, pp.3). Public Relations and Marketing Just like British Petroleum used YouTube, Facebook, and Flickr to maintain its reputation, these forums are also used by other organizations to improve their image. A large amount of money is spent on advertisement by big firms to make sure that their brand is popular and people are aware of it. Organizations today make sure that they publicize their firms so much that their brand is the only brand its customers know of. Public relations and marketing are closely connected since a marketing campaign cannot be successful without public relations (Hook 2010). Marketing involves a number of activities to make sure that customer needs are satisfied and the firm is getting some value in return while public relations consist of activities that make sure that the public image of an organization is strong and positive (McNamara 2010). The example of McDonalds in the UK can be used to demonstrate the importance of reputation management. McDonalds is one of the leading restaurants of the world but its sales were halved in the UK because it failed to maintain its healthy image in the region. The company had to take many measure to get its sales back up and change the perception of the brand from “obese” to “healthy” by introducing healthier meals. Online marketing and reputation management has gained much attention in the past decade because of the large amount of people online. Many tools are used by the marketers to maintain public relations such as, Media Relations, Employee Relations, Newsletters, etc. Marketing and public relations remain the two most important external functions of business organizations that focus on customer satisfaction and positive image building (Kotler and Mindak 1978). Modern public relations is paying particular attention to its contribution to the achievement of marketing and other organizational goals because it is becoming increasingly important for the public relations to have more influence over marketing to increase value for the stakeholders (Kotler and Mindak 1978, pp.14). Public relations departments and marketing department used to work separately before but now these two departments have converged away from the norm (Schultz 1996). The effect of public relations on marketing communication is very unusual because when public relations are bad, advertisement fails to make a difference, but if advertisement is don’t when the public relations are going well, its effect is more than the impact of everything else (Smith 2008). It is also believed that the negative marketing done by the unpaid media, can have a negative impact which is ten times stronger than the positive impact caused by the paid media and the public relations makes up for five to seven per cent of the total sales (Smith 2008, pp.17). Therefore, modern public relations does not only manages the communication between the corporation and its publics, but also takes into consideration other factors such as, marketing, advertising, maintenance of public image of the firm, etc. Firms are giving attention to public relations now more than ever because of its increasing impact on sales but its main purpose remains to maintain the reputation of the organization among its publics. Public relations are important even when the organization is out of media spotlight because once the perception of an organization becomes negative, it can significantly bring down the profitability of that firm. Since people make decision based on their percept and understanding of things, it is important that the percept of an organization or brand is positive among the population. Many public relations professionals believe that public relations actually take into consideration three main factors: marketing by increasing the exposure of public to the product; branding by making sure that the public is aware of the product; and maintaining the reputation of the product (Smith 2008, pp. 17). Brian G. Smith, concluded in his study that “public relations in marketing communications mix is gaining prominence” because of the convergence of public relations variables with marketing (Smith 2008, pp. 27). Conclusion It can be concluded that reputation management is the most important part of public relations and for this reason UK’s Charted Institute of Public Relations has defined public relations in terms of reputation. It takes an organization many years to build its reputation but its image can be destroyed overnight for instance, British Petroleum’s Gulf of Mexico oil spill which caused the firm millions of dollars and ruined its “green” image. It is situations like these that require public relations to control the damage done to the reputation of the organization the most. However, other parts of public relations such as, management of relationships with key organizations stakeholders cannot be avoided. It is the responsibility of the public relations department to make sure that the measures taken by the organization to control the crisis are bring conveyed to the public positively and prevent the organization from appearing apathetic to the crisis. Reputation management is an adequate description of the role of public relations in contemporary organizations because all the business organization depends on their image in the market for sales. Because of the increasing competition it is not possible for any firm to be successful without a good reputation in the market and for these very reason modern public relations is paying much attention to its contribution to the achievement of marketing and other organizational goals. BIBLIOGRAPHY CIPR. "What is PR?" CIPR. 2010. http://www.cipr.co.uk/content/policy-resources/careers-pr/whatispr (accessed September 14, 2010). Grunig, James E. "Strategic Public Relations Management and Crisis Communication." ICPR. 2010. www.icpr.ir/.../Hong%20Kong%20Strategic%20Public%20Relations%20Managem... - (accessed September 15, 2010). Hook, Steven R. Van. "The ABCs of Marketing." All about Public Relations. 2010. http://aboutpublicrelations.net/ucvanhook1.htm (accessed September 15, 2010). Horton, James L. "Public Relations and the Profit Motive." Online Public Relations. 2005. http://www.online-pr.com/Holding/Public_Relations_and_Profit_article.pdf (accessed September 14, 2010). Hutton, J. "The definition, dimensions and domain of public relations." Public Relations Review 225, 1999: 199-214. Hutton, James G., Michael B. Goodman, Jill B. Alexander, and Christina M. Genest. "Reputation management: the new face of corporate public relations?" Public Relations Review, 2001: 247-261. Jarboe, Greg. "Online Reputation Management Case Studies: BP Oil Spill, Toyota Recall, and Goldman Sachs Fraud Charges." Search Engine Watch. June 13, 2010. http://searchenginewatch.com/100613-114423 (accessed September 15, 2010). Kotler, Philip, and William Mindak. "Marketing and Public Relations." The Journal of Marketing, 1978: 13-20. McNamara, Carter. "Basic Definitions: Advertising, Marketing, Promotion, Public Relations and Publicity, and Sales." Management Help. 2010. http://managementhelp.org/ad_prmot/defntion.htm (accessed September 15, 2010). Schultz, D. E. "The inevitability of integrated communications." Journal of Business Research, 1996: 139-146. Smith, Brian G. Representing PR in the Marketing Mix A Study on Public Relations Variables in Marketing Mix Modelling. PhD Thesis, Maryland: Institute for Public Relations, 2008. Read More