Sunday, February 01, 2009

Downturn, marketing, sales and PR

Public relations is acknowledged as one of the most powerful marketing tools. Several global and Indian giants have been using the tool with increasing effectiveness.

“PR is an important and versatile marketing communications tool,” write Geoff Lancaster and Paul Reynolds, UK marketing professors who have been associated with the Charatered Institute of Marketing, in their book, Introduction to Marketing. “PR forms an intrinsic part of the integrated marketing communications mix. There is a PR aspect to most marketing communications variables whether this is personal selling, sponsorship, exhibitions, direct mail or telephone marketing. This has the effect of improving and increasing the credibility and value of marketing messages from other elements in the communications mix by enhancing the image of the firm and its products and services.”

Whether it is marketing a product, a service or a not-for-profit initiative, PR is credited with boosting both bottomline and topline growth. This cuts across sectors – automobiles, consumer durables, FMCG, healthcare, infrastructure, IT & ITeS, logistics, NGOs or not-for-profit, pharma, realty, retail and telcom.

Rely on PR

“Corporate managers are just beginning to recognize the power of public relations in the building of brands,” write Al and Laura Ries in The Fall of Advertising and the Rise of PR. “They need to do more. They need to shift their thinking from an advertising-oriented mode to a PR-oriented mode… In particular, PR professionals have a unique opportunity to seize the marketing reins of their clients, to become the leading source of outside marketing counsel, to become the driving force in the building of brands.”

Several Indian brands have been reaping rich gains by relying on PR. With the slowdown affecting India’s economy, more and more corporates – small, medium and large – would now perhaps go the extra mile in leveraging the power of PR for all their key initiatives including those related to marketing.

Dell, Microsoft: Gains from PR

In times like these, where cost is a major factor, perhaps the fourth P (promotion) of marketing should be read as PR. Why?

“Last year (read early 2000s) Dell spent $430 million on advertising and $2 million on PR,” write Al and Laura Ries. “In other words, Dell spent 215 times as much on advertising as on PR. It’s going to be hard for Michael Dell to believe that PR is more important than advertising. Yet Dell is a good example of a brand built by PR, not advertising.”

More recently, Microsoft set a marketing success record through the low-cost launch of its Internet Explorer 7 or IE7. Again the credit goes to PR.

PR and trust

Why is PR so important? As we all know, public relations is the art and science of building/ restoring trust between an organisation and its stakeholders. Trust is the cornerstone of all transactions, both financial and non-financial.

What is more important, there is no alternative to PR in the business of creating trust.

Consider what Anne Gregory, Head of the School of Business Strategy and Assistant Dean of Leeds Business School, has to say. “If a company has a good reputation, the evidence is that people are more likely to: try its new products, buy its shares, believe its advertising, want to work for it, do business with it when all other things are equal, support it in difficult times and give it a higher financial value.”

Topline, bottomline growth

In India too, we have been witnessing the impact of reputation on topline and bottomline growth. There have been several success stories. There have also been badly battered cases including companies in sectors like real estate, IT/ ITeS, automobile, airlines, etc. In all these sectors, waiting for Mannah is one option, as it is being done now. Stealing a march over competition in these tough times with increased focused on corporate communications is another option. This is one of the secrets of success of brands like Procter & Gamble, Colgate and Reckitt Benckiser.

Also see:

Marketing mix: Larger role for corporate communications on anvil

Time to revisit communication strategy: Corporates should connect with customers’ emotions

PR is stealing the show from advertising and direct marketing

Why PR invigorates brands

Recession is the best incubator for ideas, invention -- even PR came into its own during Great Depression: Harvard Business Review

Communications budgets: Marketing lessons from past recessions
Slowdown: An opportunity for corporate communications?

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