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Vitality of PR in launching new product / brand extension
Syed Ehtesham Ali*
According to kitchen et al. (2004) PR (public relation) is among the main tools of
integrated marketing communication and the core of PR today involves mutual
understanding and long term relationship building.Although PR covers a wide
spectrum of functions from events to crises management but the main objective of
this paper was to investigate how the public relation plays its role in launching of new
product / brand extension in the presence of conventional advertising in terms of
promoting awareness of product or services, stimulating sales, facilitating
communication between customers and companies and their brands, creating brand
impact, developing credibility and enhancing image and publicity. The conceptual
definitions of different authors were used for justifying the importance of above
variables and to achieve this objective, a questionnaire survey has been conducted
over a sample of 120 respondents to gather their opinion about the subject study in
terms of several determinants as well as in the context of developed hypotheses.
1. INTRODUCTION
Public relation is a tool of IMC; definitions of public relations (PR) are
indescribable because the PR concept covers broad spectrum of activities.
According to Belch and Belch (2004), PR is the management function which
evaluates public attitudes, identifies organizations’ polices and procedures from
public perspective, and executes a program of action and communication to earn
public understanding and reception. Where as advertising in comparison of PR is
any paid form of non-personal communication about an organization, product,
services, or idea by an identified sponsor. Hence the question arise here is
whether advertising and PR agencies understand the potential of these tools and
implements it properly.
We live in a time where companies spend vast amounts of money on commercial
spots. Zyman (2002) contends that conventional advertising in the form of 30
seconds ads doesn’t work and it is a massive waste of money and could destroy
the company and the brand.
_______________________
*Syed Ehtesham Ali,PAF-Karachi Institute of Economics and Technology,Pakistan. E-mail:
[email protected]
The marketing guru Al Ries released a controversial book called “The Fall of
Advertising and the Rise of PR” (2002). The essence of the book is to
communicate the message of public relations’ superiority to advertising in
building of a new brand and also for extending brands.
In this paper, efforts have been made to investigate how important PR is in
launching of new product in terms brand awareness, increase sales, image &
publicity, brand impact, and credibility.
2. LITERTURE SURVEY
There is a general understanding of marketing as a simplified process of selling
and advertising but Selling and advertising are merely two functions of a complex
process we call marketing and often not the most important ones. Marketing is
defined by Armstrong and Kotler (2005) as, “A social and managerial process by
which individuals and groups obtain what they need and want trough creating
and exchanging products and value with others” and its efficiency is based
communication. Communication involves the process whereby thoughts are
conveyed and meaning is shared. In order to communicate effectively with the
customer the skill described in integrated marketing communication is public
relation.
The single most important objective of the marketing process is, according to
Ries and Ries (1999), the process of branding which requires effective
communication. Branding is the glue which holds all marketing functions together
and marketing is building a brand in the mind of the consumer for which
advertising has by tradition been the main tool for building brand equity.
Launching new brands could be motivated when the existing brand is weakening
or the existing name is not appropriate for the product category but when
introducing a new brand, communication through public relation becomes vital,
since consumers are exposed to numerous communication messages everyday.
According to Smith et al. (1997) communication is not only an interpersonal
activity but also a dependent activity and the major element in this dependency is
perception. When introducing a new product or extending brand the perceived
experience is important. Duncan (2002) stresses that perception is the result of
communication, it provides a window on the success of the message strategy. In
other words, tracking customers’ perceptions is an important source of feedback
in evaluating brand messages and for this use of public relation comes on a fore
front.
According to Tellis (2004) the ultimate challenge for marketing communication is
to convince consumers to change their perception of a brand which can be
handled by PR in a better manner than only conventional advertising.
Schultz et al. (1994) emphasize that the process of perception is basic in
understanding the need for integrated marketing communication (IMC) where
Advertising and PR comprise two of the major tools. Among the other IMC tools
like personal selling, Sales promotion and Direct Marketing, PR is one of the
most important tool. Public relations is building good relations with the company’s
various public by obtaining favorable publicity, building up a good corporate
image and handling or heading off unfavorable rumors, stories or events (Kotler
Armstrong, 2005).
The move toward IMC has according to Belch and Belch (2004) changed the
view of marketing and both small and larger firms have adopted this concept.
Advertising is according to Tellis (2004) an enormous industry and the growth in
expenditures indicates that the importance of advertising is not declining. The
total expenditures in the United States on all media advertising in the 2002 were
nearly $240 billion compared to the total expenditure of $53 billion in 1980 and
the numbers of advertising messages that reach the consumers vary from 100 to
more than 1000 a day (Armstrong & Kotler, 2005, Belch & Belch, 2004, Tellis,
2004). The primary role for advertising when launching a new brand is according
to Jones (1999) to announce and provide information and Duncan (2002) says
that the main role for advertising in the introduction of a new brand is to build
awareness. However, the effectiveness of advertising, as per Tellis (2004), is a
highly complex phenomenon and depends fundamentally on human response to
communication. It involves attention, processing, recall, and response to appeal.
This leads to one potential drawback noted by Armstrong and Kotler (2005) who
claim that advertising is a kind of one-way communication and the audience is
not very involved or attentive and here is the opportunity for PR to play its vitality.
Ries and Ries (2002) emphasize that exaggerated claims and extreme
advertising volumes are factors that contribute to the increasing ineffectiveness
of advertising. An advertising message is perceived by consumers to be a onesided, biased, selfish, and company oriented rather than consumer oriented.
However, the fundamental is the credibility, which as per Duncan (2002) is not a
strength of advertising because it is recognized by the consumer as paid
messages delivered in support of a brand.
Keeping in view the thoughts of Ries and Ries towards advertising, Armstrong
and Kotler (2005) characterize the concept of PR to promote products, people,
places, and ideas, activities, and countries.
According to Larsson (2002) the core of PR today involves mutual understanding
and long-term relationship building. Now the key areas where any Public Relation
activity can perform its role for the launching of new brand includes bit not limited
to Press Relation, Product publicity, Public affairs, Lobbying, Investor relations
and Development.
The press release is probably the most important one to reach the public. Overall
to create news around the company and its product or people is according to
Armstrong and Kotler (2005) of great importance. Companies often call to press
conferences when they have significant news to announce, such as the
introduction of a new product or a new advertising campaign. As per Belch and
Belch (2004) many corporations enhance their public image through community
involvement. Event and sponsorship designed to create involvement and
intensify the marketing communication involve and attaches customers to a
certain brand and is more memorable and motivating than passive brand
messages, such as advertising.
3. EFFECTIVENESS OF PR IN LAUNCHING NEW PRODUCTS
When a message delivered by an objective third party, such as a journalist or
broadcaster the message is delivered more persuasively (Professor Theodore
Levitt, Harvard University).
Belch and Belch (2004) stress that public relations is perceived as more credible
than advertising since the public does not realize that the company either directly
or indirectly paid for the PR. The credibility builder comes from the “third-party
endorsement”,
According to Armstrong and Kotler (2005) public relations have a major impact
on public awareness at a much lower cost than advertising. The company can
cut their marketing costs substantially, because they do not need to pay for time
and space in the media. The advertiser only pays for staff which develops and
circulates information and manages events thus it is playing an increasingly
important brand-building role. According to Ries and Ries (2002) big brands like
Body shop, Play station and Starbucks are examples of brand which almost are
built solely on public relations.
Belch and Belch (2004) has also considered the cost benefit of using PR as the
greatest benefit and support this by stating that the message is received as more
credible because the media are not compensated for delivering the message. He
also states that one of using PR greatest benefits is its ability to avoid the media
clutter.
Harris (1997) also states that PR not only reduces cost but also gains positive
awareness and creates a favorable climate for sales. When regarding the lower
cost we believe that using PR in launches is going to increase rapidly in the
future. If the companies are discovering the cost benefits and at the same time
gain more positive brand awareness by using simple means, then PR is going to
have a higher impact in the introduction phase of a new brand or product. If
brand awareness is a cost issue, then the utility of using constructive PR
strategies in the launch may be the solution both for large and small companies.
However, Armstrong and Kotler (2005) argue that PR has been considered the
marketing stepchild because of its uncertainty and scattered use and can be
somewhat limited. All the respondents are in agreement that PR is hard to define
and it can be hard to convince the companies to use PR instead of traditional
marketing, since they do not know what they get. Thus, Credibility is one of the
major differences with advertising and public relations.
Over this issue, Belch and Belch (2004) says that public relations is perceived as
more credible since the public is not aware of that PR could be directly or
indirectly paid for. Advertising can not according to Rudels compete with the
credibility of PR unless it’s a really strong brand like IKEA. However PR is more
abstract and you can not really put your finger on it. The perception of a brand
could be affected by positive and negative communication experiences
Advertising could be controlled to deliver a more positive communication. With
public relations you never know how the message will be delivered
In terms of creativity, they believes that creativity is not only for the advertising
industry, the PR agencies must also use their creativity to make their messages
seen. As far as clutter is concerned the view of advertising and PR in the
introduction stage of a new brand seem to be in favor of PR. Why? Because PR
is the best clutter busting marketing tool. They also believe that this can be
because the PR industry is working towards an objective third party. The third
party like a journalist or politician can be the mean for the message to break
through the clutter of other media messages. If the PR agencies can sell the
messages to a respected third party, the better the chances are that the brand or
product will have a better reception in the introduction stage.
4. METHODOLOGY
The purpose of this thesis is to gain a sound understanding about the vitality of
PR in the launching of new brand, thus the quantitative method was most
suitable for this because Carson, Gilmore, Perry and Gronhaug (2001) argue that
the quantitative
research methods gives a clear picture of a complex
phenomenon.
5. SAMPLE SIZE / DATA COLLECTION & METHOD OF ANALYSIS
The population of the subject study is the number of Modern retailers of Cadbury
Pakistan in Karachi. According to Cadbury Pakistan Ltd. the total population of
Modern retailers in Karachi is about 209 who are generating average (overall)
sales of Rs.5.25 to 6.0 million per month. Roscoe is of the opinion that 20
samples per determinant are sufficient for multivariable research (Sekran, 2003).
The present study is based on six key determinants; therefore as per Roscoe,
120 samples would have been sufficient. As per the advice of Regional Sales
Manager- Cadbury Pakistan Limited, Karachi Mr. Hasnain Ali the majority of the
respondents (67%) were selected from the Sales strata (Rs. 25000 – Rs.
100000) and the rest from other groups.
Questionnaire was the key instrument to measure and quantify the respondents’
opinions. The data was mostly analyzed through the measure of central
tendencies and measure of dispersion. The developed hypotheses were tested
through Simple ANOVA, Z-test and T-test.
6. HYPOTHESES
H1: Respondents’ opinions are significantly different on a notion that “Use of PR
overall increase Brand awareness” than Use of PR can get more consumer
involvement and can help reducing media clutter”.
H2: There is significant difference on respondents’ opinion in terms of
assumption that “Use of PR stimulates sales and creates favorable news about
failure products” than “Use of PR can enhance brand image and helps gain
publicity”.
H3: There is significant difference on respondents’ opinion in terms of
determinants using PR is more credible than advertisement” and “Using PR first
and than Advertisement for launching new product product/brand extension”.
H4: Respondents’ opinions are significantly different in terms of all PR
effectiveness determinants Brand awareness, Increase sales, Image and
publicity, Brand impact and credibility (Overall).
7. CONCLUSION & FINDINGS
As the purpose of this paper was to investigate the vitality of PR in launching of
new product / brand extension, my contribution towards this comes out in terms
of taking view of Cadbury Pakistan and analyzing the possible effectiveness of
subject matter for introducing new chocolate products in the market. Based on
literature survey, a theoretical framework was developed that was used for
developing a questionnaire. The key findings in terms of respondents’ opinion
towards all the hypotheses/determinants individually as well as on an overall
basis are as follows:
Determinant “PR enhances brand awareness” was found to be the highest with
the mean of 3.24 and the determinant “PR enhances brand impact” with the
mean of 3.05 was the lowest.
Standard deviation for the determinant “PR enhance image and publicity” was
0.63 vis-à-vis 0.85 for determinant “PR enhance brand awareness”. This
indicates that there was low polarization of respondents’ opinion towards earlier
determinant and high towards later.
The skew ness for determinant “PR as enhancer of brand awareness” was
negative that is (0.24) vis-à-vis positive 0.14 for determinant “PR as enhancer of
credibility”.
A). The first hypothesis relating to respondents opinion of no significant
difference towards determinant “PR enhance brand awareness” vis-à-vis “PR
enhance image and publicity” was accepted.
B). The second hypothesis relating to respondents’ opinion of no significant
difference towards determinant “PR Increase Sales” vis-à-vis “PR Enhance
image and publicity” was accepted.
C) The third hypothesis relating to respondents’ opinion of no significant
difference towards determinant “Using PR is more credible than advertisement”
vis-à-vis “Using PR first and than Adv. for launching new product/ brand” was
rejected.
D). The fourth hypothesis relating to respondents’ opinion of no significant
difference towards all determinant of PR on an Overall basis was accepted.
Graphical representation of respondents' opinion in terms of Variance
0.60
0.72
0.70
0.60
0.40
Enhance Brand Awareness
Increase Sales
Image n Publicity
Brand Impact
Credibility
Graphical representation of Measure of Central Tendencies & dispersion in terms of Mean
3.09
3.24
Enhance Brand Awareness
Increase Sales
Enhance Image n Publicity
Enhance Brand Impact
3.05
3.22
3.13
Enhance Credibility
Graphical re pre s e ntation of re s ponde nts ' opinions for PR as a tool to "
Enhance brand aw are ne s s " vis -a-vis " to " Enhance im age & publicity"
3.26
3.24
3.24
3.22
3.20
3.18
Mean
3.16
3.14
3.13
3.12
3.10
3.08
3.06
Enhance Brand Aw areness
Enhance Image n Publicity
Gr aphical r e pr e s e ntation of r e s ponde nts ' opinions for PR as a
tool to " Incr e as e Sale s " vis -a-vis " to " Enhance im age &
publicity"M e an
3.24
3.22
3.22
3.20
3.18
Mean
3.16
3.13
3.14
3.12
3.10
3.08
Increase Sales
Enhance Image n Publicity
Graphical Representation of Respondents opinion for using
PR for launching new praducts/brands
4.00
3.00
2.00
1.00
0.00
3.13
3.23
1.20
Mean
1.42
Variance
Using PR is more credible than Adv for Launching new
Product/Brand
Using PR first & Advertising later for Launching new Product/Brand
ANNEXURE -1
QUESTIONNAIRE (DEMOGRAPHIC DATA)
Q1) Age: (in years)
21 – 25
26 – 30
31 – 35
36 – above
Intermediate
Graduation
Q2) Qualification:
Matriculation
Master
Others_____
Q3) Gender:
Male
Female
Q4) Sales:
Up to 25,000
55,001 – 100,000
25,001 – 35,000
35,001 – 45,000
45,001 – 55,000
Q5) Please mark the area of your shop
Sadder
F.B. Area
Defence
Nazimabad
Clifton
Other _____
PECHS
Gulshan
QUETIONAIRE (Subject data)
Brand Awareness:
Q6) Do you think, the use of PR along with media enhances the brand
awareness?
5 4 3 2 1
Q7) Do you think Cadbury should use more PR related activities and the other
marketing communication tools while launching the new brand? 5 4 3 2 1
Increase Sales:
Q8) Do you think that the use of PR stimulate sales and facilitate communication
between customers and companies and their brand?
5 4 3 2 1
Q9) Do you think Cadbury, by using PR can creates favorable news about the
failure Product/Brand?
5 4 3 2 1
Image and Publicity:
Q10) Do you think Cadbury with the help of conducting interviews, as a PR tool,
can gain publicity about their Product/Brand?
5 4 3 2 1
Q11) Do you think Cadbury Pakistan with the use of community involvement, as
a PR tool, in terms of donating Time/Money can enhance their public and brand
image?
5 4 3 2 1
Q12) Do you think PR is an appropriate tool for Cadbury’s brand positioning in
the market?
5 4 3 2 1
Brand Impact:
Q13) Do you think Cadbury Pakistan by organizing events and sponsoring
programs, as a PR tool, can get consumers involved and attached to a newly
launched brand?
5 4 3 2 1
Q14) Do you think using PR for marketing communication can avoid media
clutter and Cadbury’s brand message would be more attention getting and
interesting?
5 4 3 2 1
Credibility:
Q15) Do you think Cadbury Pakistan should use PR on a more permanent bases
for marketing communication because it is more credible than advertising?
5 4 3 2 1
Q16) Do you think while launching new product/brand, Cadbury should use PR
first and than advertising for maintaining and supporting?
5 4 3 2 1
Q17) Do you think while launching new product/brand, Cadbury should use PR in
order to segment and target their customer base deeper as well as to reach
specific groups?
5 4 3 2 1
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