The Traditional Approach to Managing Reputation Corporate Reputation and Competitiveness Lecture 2.

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The Traditional Approach to Managing Reputation Corporate Reputation and Competitiveness Lecture 2

Transcript of The Traditional Approach to Managing Reputation Corporate Reputation and Competitiveness Lecture 2.

The Traditional Approach to Managing Reputation

Corporate Reputation and Competitiveness

Lecture 2

Lecture Objectives

• To describe Public relations and Illustrate with practitioner views

• To position Public Relations as a reactive business function

Public Relations

PR practice is the art and science of analysing trends, predicting their consequences, counselling organisation leaders and implementing planned programmes of action which will serve both the organisation’s and the public interest.

The Elements of Public Relations

PublicRelations

Press Releases

Special Events

Sponsorship

Complaint Management

Donations

Crisis Management

Monitoring Media Coverage

Lobbying

Measuring Stakeholder Opinion

Corporate Publications

Governmental Organisations Community Philanthropy

Issues Management Media Relations Public Relations

Employee Communications Public Interest/Activist Groups

Crisis Issues/Management Investor relations

Research & measurement

What Public Affairs Departments Do

Media Relations

Learn which media are most influential with your Target Group Learn what they consider to be newsworthy by forming a relationship with key journalists Do not expect press mentions in exchange for advertising Prepare releases that are succinct, capable of immediate use but which contain adequate contact information for any follow up and any material such as photos. Follow up with the media as to whether they will be using the release

Jeremy Clarkson on the new Ford Mondeo

Even if I told you that Ford is donating all its profits to famine relief and that the new car runs on water, you’d still buy a BMW or an Audi or any damn thing so long as it didn’t have that plebby, everyman Ford badge on the front…

He described a Ford as traditionally:

Frill-free engineering for Gary the photocopier salesman

Jeremy Clarkson on the new Ford Mondeo

To attract private buyers, Ford used to load up its cars with all sorts of fruit. BMW would make you pay extra for a steering wheel, whereas a Sierra would come with a whirlpool in the rear armrest…..

Gary. You face a simple choice. Buy a BMW and you get the best badge in the business. Buy the Ford and you get the best car.

Adverse Press Comment

• Do people’s impressions of a company decline with every piece of bad press they read or do they average each piece of news?

• The evidence is that people average

• The implication is that positive press will improve upon a negative picture

Agenda Setting

• Agenda setting is the idea that key media decide what is going to be news.

• Press agencies can have a major influence by picking up on one story and deciding not to carry another. (AP will cover and pass along to 1,700 newspapers and 5,000 radio and television stations in the United States and 8,500 international subscribers )

Framing

• Framing refers to the way journalists ‘see’ a story or an issue

• For example Bob Dole complained about the label of ‘old’ used to describe him during his presidential campaign rather than say ‘experienced and mature’

Lobbying: the case of Japanese retailing

Country No. of Retail

Outlets 1994 Population 1994

(000) Population per

Outlet 1994 France 326,142 57,900 177.5

UK 306,600 58,395 190.5 USA 977,400 260,660 266.7

Japan 1,499,948 124,960 83.3

Restrictive Legislation

• The Law for the Promotion of Small and Medium Retail Business (the PSMRB law) in 1959, and the subsequent Law for the Promotion of Private Enterprise (the PPE law) in 1959, were specifically designed to promote growth among small and medium sized retailers. The Large Scale Retail Store Law (the LSRS Law) was first introduced in 1973 to restrict competition from larger stores, inter alia, by limiting opening hours.

American Pressure• In the late 1980s negotiations between the

Japanese and American Governments on a wide range of trade issues resulted in the publication in 1990 of a Structural Impediments Initiative.

• The LSRS law was amended in 1992 and was to be abolished to ease the planning process. The PSMRB law was also amended in 1992 but a new law, for the Development of Specific Shopping Centres (the DSSC law) was introduced to promote retail business in general and smaller retailers in particular.

Retail Concentration Changes

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1970 1975 1980 1985 1990 1995 2000

Year

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The Role of PR agencies: Trevor Morris

Their role has changed. It used to be much more straightforward, because you dealt with consumers or suppliers or the City or politicians as fairly discreet audiences.

People have shifted up Maslow's Hierarchy of Needs and now want to express themselves not just as consumers but also as moral, social, political and even spiritual beings. One of the ways consumers do that is through the organisations that they buy from and deal with

The Role of PR agencies: Trevor Morris

For companies it is not now just whether your products or services work, which has become a threshold issue.

People are also looking to companies to use their power to look after their local communities, to train their staff well, to get involved with education, to look after the environment.

The Role of PR agencies: Trevor Morris

• I can liken trying to understand how a corporation interacts with the world in which it lives as trying to hold a piece of wet jelly in your hands, you can do it but you have to keep constantly moving and the shape of what you are trying to hold onto keeps changing

The Role of PR agencies: Trevor Morris

Most organisations talk about themselves, and yet in fact those organisations and their products are fundamentally dull and of little interest to the audience. What people need to do is a 180-degree turn and talk about what they can do for the audience, how they can help them, what intelligence or insight they can bring to problems and issues of concern to that audience.

The Role of PR agencies: Trevor Morris

• In theory, PR is always better than advertising, because it is effectively third party recommendation. An old saying is that advertising is somebody who goes into a crowded room and says” Hi, I’m great”. PR is somebody who goes into a crowded room and everyone whispers, ” Hey, he’s great”.

The Role of PR agencies: Trevor Morris

PR can present a company at its best, but it can’t make it better than it is. If you try, you risk being caught out and punished.

You can create an image for an organisation, but the organisation has to live it. If it doesn’t live it, then you will get found out, because people aren’t fools and you can’t make something out of nothing.

The Role of PR agencies: Trevor Morris

The employee and customer views on the firm are equally important and they should be very similar. All too often what you have is marketing doing external communication and human resources or personnel doing internal communication

The two need to work together and sadly they all too often don’t.

The Role of PR agencies: Trevor Morris

• Short term, you can manage the media, to amplify or turn down the likely coverage you get. We see companies timing their announcements to try to manage the media agenda and make sure that they are at the top or the bottom of the news. Long term you cannot manage the media. Long-term polluters will be found out. People who exploit labour will be found out.

Richard Greenbury on M&S

I don’t think that reputation can come before supplying the right product. One of the arguments I had in M&S from time to time was with people talking about the brand, the St Michael brand is everything, we’ve got to manage the brand. Of course, but for me the product makes the brand, the brand doesn’t make the product.

Richard Greenbury on M&S

• The label on a garment can change people’s perceptions of it. Recently one newspaper cut the M & S label from a number of garments and sewed in those of some competitors. They asked shoppers to compare these with garments with the M and S label still inside. The shoppers preferred those with the fake labels.

Richard Greenbury on M&S

The problem with information systems, which have become more and more sophisticated, is that you know what you are selling. But you don’t know why. When you speak to staff, or the customer that intimacy, especially with good sales assistants, was so rewarding because they could always tell me why.

Richard Greenbury on M&S

I’ve always believed that one of the principles of business was that the customer and the staff were as important as the shareholder. And in fact, if you could satisfy your customers and keep a happy, efficient, contented staff, the benefits would actually flow through to the shareholders. So I’m a stakeholder man, basically.

Richard Greenbury on M&S

I used to be asked at every Annual General Meeting about the huge charitable contributions we made, “Why don’t you give this money to us in a bigger dividend?” and I always used to say, “We think that that’s a very, very good investment. We get back reputation, the involvement of our staff, but we also want to do it, we think it’s right as a responsible employer”.

Richard Greenbury on M&S

• The way you’re viewed in the local community is very much the way the staff feel about you as an employer as well as the way the customers feel. The customers and the staff between them, in a very big business, really do make your reputation

Times, they are a changing

• PR had an external focus• Corporate communications added an

internal focus• Practitioners are implying that a third wave

has arrived, one where the firm needs to match the internal with the external view of the firm: some use the term ‘Reputation management’.

Then, What ‘Corporate Reputation’ means?

• “I don’t know who you are.• I don’t know your company.

• I don’t know your company’s product.• I don’t know what your company stands for.

• I don’t know your company’s customers.• I don’t know your company’s record.

• I don’t know your company’s reputation.• Now-what was it you wanted to sell me?’’

• McGraw- Hill Magazines Advertisement ( Source: Dowling 1994)

Who is Responsible for Reputation?

• What Price Reputation Study by Louella Limes and Gary Davies.

• Summarised in ‘Reputation Management: Theory versus Practice’, Corporate Reputation Review, Vol. 2, No. 1, pp. 16-27, 1998

What Price Reputation?

• Anheuser Busch• Centrica• Co-operative bank• Kimberly-Clark• London Electricity• Marks & Spencer• Monsanto

• New Look• The Post Office• Pret a Manger• Safeway• Standa• Vickers• Virgin

Reputation Managers

• Senior/Board level, often the CEO

• Guardians of corporate values

• Evolving role, much like marketing in the 1960’s

• Measurement limited to Public Relations issues such as media coverage.

• Top values: Quality, Honesty and Fun

PR vs Reputation

• Public relations is about event or issue management, about relationships with stakeholders and the media

• Reputation Management is about stakeholder relationships and more fundamental issues such as answering the question ‘who are you?’.

Summary

• Reputation management has evolved from Public Relations management

• The two differ in that one is tactical , the other strategic, one is reactive the other proactive.

• Managing Reputation is a senior role and can dominate business thinking