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Public Relations, Regulations and Sponsorship Programs

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

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Public Relations, Regulations and Sponsorship Programs

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

  2. Discussion Slide Sponsorships and Causes 13 • 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?

  3. F I G U R E 1 3 . 1 Public Relations Functions • 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.

  4. F I G U R E 1 3 . 2 Stakeholders of Public Relations • Employees • Unions • Management • Shareholders • Channel members • Customers • Media • Local community • Financial community • Special-interest groups • Government

  5. Employees need to be aware of what is being said in advertisements and on the Internet. Motorola’s Web site Http://www.motorola.com

  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

  7. 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. Cause-Related Marketing

  8. F I G U R E 1 3 . 3 Causes Consumers Prefer • Improve public schools (52%) • Dropout prevention (34%) • Scholarships (28%) • Cleanup environment (27%) • Community health education (25%) YWCA Web site: http://www.ywca.org

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

  10. F I G U R E 1 3 . 6 Public Relations Tools • Corporate newsletters • Internal communications • Media news releases • Stockholder correspondence • Annual reports • Special events

  11. 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 Regulating Marketing Communications

  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 1 3 . 7 Governmental Regulatory Agencies

  13. 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. Federal Trade Commission(FTC)

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

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

  16. 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? FTC Criteria

  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.

  18. Better Business Bureau National Advertising Division (NAD) National Advertising Review Board (NARB) F I G U R E 1 3 . 8 Industry Regulation

  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.

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

  21. Event Marketing and SponsorshipsCanada Environment (2.5%) Humanitarian (10%) Health (10%) Sports (45%) Education (10%) Cultural Events (20%) Source: “How Big is the Canadian Sponsorship Pie?” The Sponsorship Report (Http://www.sponsorship.ca/p-issues-howbig.html)

  22. What is the likelihood that a fan will buy a sponsor’s product? • NASCAR 72% • Tennis 52% • Golf 47% • NBA 38% • NFL 36% Source: “Event Marketing/Sponsorships,” Public Relations Society of America (Http://www.prsa.org/ppc/68022.html)

  23. STOP INTEGRATED LEARNING EXPERIENCE Firms specializing in helping businesses maximize their sponsorship investments. • Performance Research • Http://www.performanceresearch.com • IEG Sponsorship • Http://www.sponsorship.com • BDS Sponsorships, Ltd. (Europe) • Http://www.sponsorship.co.uk

  24. Sponsoring Individuals What attributes do sponsors look for in endorsing an individual such as Tiger Woods? • Name recognition 68% • Current popularity 56% • Overall image 53% • Character 51% Source: “Event Marketing/Sponsorships,” Public Relations Society of America

  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.

  26. Event Marketing

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