Promoting Products: Public Relations and Sales Promotion Marketing for Hospitality and Tourism Kotler, Bowen and Makens Promoting Products: Public Relations and Sales Promotion Chapter 14

Learning Objectives Understand the different public relations activities: press relations, product publicity, corporate communications, lobbying, and counseling. Understand the public relations process: research, establishing marketing objectives, defining the target audience, choosing the PR message and vehicles, and evaluating PR results. Explain how companies use public relations to communicate and influence important publics. Explain how sales promotion campaigns are developed and implemented. Implement a crisis management program in a hospitality business.

Public Relations Activities Press Relations Product Publicity Corporate Communications Lobbying Press Relations The aim of press relations is to place newsworthy information into the news media to attract attention to a person, product, or service One reason for the growth of press relations in the hospitality industry is its credibility Product Publicity Product publicity involves various efforts to publicize specific products Corporate Communication Corporate communication covers internal and external communications and promotes understanding of the organization One important marketing aspect of corporate communication is communication directed toward employees Companies also need to manage their communication with their stockholders to make sure the stockholders understand the company’s goals and objectives Lobbying Lobbying involves dealing with legislators and government officials to promote or defeat legislation and regulation Counseling Counseling involves advising management about public issues and company positions and image Counseling is important when there may be sensitive issues associated with the business Counseling

The Public Relations Process Establishing Market Objectives Defining the Target Audience Research Choosing the PR Message & Vehicles Implementing the PR Plan Evaluating the Results Effective PR is the result of a process – a process that must be integrated with the firm’s marketing strategy The PR process consists of the following steps: research, establishing the market objectives, defining the target audience, choosing the PR messages and vehicles, implementing the PR plan, and evaluating the results Research Before a company can develop a PR program, it must understand the company’s mission, objectives, strategies, and culture It should know the vehicles that will be effective in delivering messages to the target audience Much of the information needed by a PR manager is contained in a well-written marketing plan Environmental scanning system is another important source of information for the PR manager Establishing the Marketing Objectives Once the PR manager has identified opportunities through product experiment and research, priorities can be established and objectives set (See Slide 5) Defining the Target Audience Effective PR practitioners carefully identify the publics they wish to reach They study these publics and find media that can be used to deliver their message They identify issues that will be important to the public and form the message so it will seem natural and logical to the target audience Choosing the PR Message and Vehicles The PR practitioner is now ready to identify or develop interesting stories about the product or service Each event is an opportunity to develop a multitude of stories directed at different audiences Publications Companies rely extensively on communication materials to reach and influence their target markets These include annual reports, brochures, cards, articles, audiovisual materials, and company newsletters and magazines Implementing the Marketing PR Plan Implementing publicity requires care Consider the matter of placing information in the media Exciting information is easy to place However, most press releases are less than great and might not get the attention of busy editors A chief asset of publicists is their personal relationship with media editors Evaluating PR Results The contribution of PR is difficult to measure because it is used along with other promotion tools (See Slide 6)

Marketing Public Relations Objectives PR Objectives Build Awareness Build Credibility Stimulate Sales Force Lower Promotion Costs Build awareness PR can place stories in the media to bring attention to a product, service, person, organization, or idea Build credibility PR can add credibility by communicating the message in an editorial context Credibility can be enhanced through positive associations with respected institutions, companies, and individuals Stimulate the sales force and channel intermediaries PR can help boost sales force and franchisee enthusiasm Lower promotion costs PR costs less than direct mail and media advertising The smaller the company’s promotion budget is, the stronger the case for using PR to gain share of mind

Evaluating PR Results Evaluating PR Results Exposures Awareness/ Comprehension/ Attitude Change Sales-and-Profit Contribution Exposures The easiest measure of PR effectiveness is the number of exposures created in the media Publicists supply the client with a clipping book showing all the media that carried news about the product and a summary statement This exposure measure is not very satisfying There is no indication of how many people actually read, heard, or recalled the message and what they thought afterward A common weakness of publicity is that the persons exposed to it are not part of the company’s target market Awareness/Comprehension/Attitude Change A better measure is the change in product awareness/comprehension/attitude resulting from the campaign Sales-and-Profit Contribution Sales-and-profit impact is the most satisfactory measure, if obtainable

Build Public Relations Around The Owner/ Operator Product or Service Location Build PR Around the Owner/Operator The owner/operator and the enterprise itself often become one and the same in the minds of customers Obviously, this strategy holds dangers, such as the death of the owners, but benefits usually exceed risks Build PR Around Location Some restaurants and bed and breakfasts are almost impossible to find Normally, this would be viewed as the kiss of death for a hospitality firm Hundreds of owners/operators of these enterprises have turned their lemon into lemonade The isolation and obscurity of the enterprises is used as a PR tactic Build PR Around a Product or Service Hospitality enterprises everywhere have built a solid and long-lasting image around a drink, a dessert, a special entree, fireplaces in the guest rooms, and even ducks Unique service also serves as a PR focal point

Dos of Crisis Management An important area of public relations is crisis management Not all publicity is good Managers must realize that things do go wrong A crisis management program will reduce the negative effects of these events (See also Slide 9)

Don’ts of Crisis Management

Sales Promotions Set Sales Promotion Objectives Select Sales Promotion Tools Develop Sales Promotion Program Pretest and Implement the Plan Evaluate the Results Sales promotion consists of short-term incentives to encourage the purchase or sale of a product or service Sales promotion includes a variety of promotional tools designed to stimulate earlier or stronger market response In using sales promotions, a company must set objectives, select the right tools, develop the best program, pretest and implement it, and evaluate the results Setting Sales Promotion Objectives Sales promotion objectives vary widely Consumer promotions can increase short-term sales or they can be used to help build long-term market share Sales promotions should be consumer franchise building; that is, they should promote the product’s positioning and include a sales message Selecting Sales Promotion Tools Many tools can be used to accomplish sales promotion objectives The promotion planner should consider the type of market, the sales promotion objectives, the competition, and the costs and effectiveness of each tool (See Slide 11) Finding Creative Ideas The Internet makes it possible to see what sales promotion activities other companies are doing If they are outside your market area, it is a good chance you can adapt the ideas to fit your needs Consulting companies also give some ideas online as a way to attract potential clients Developing the Sales Promotion Program The third step in developing a sales promotion is to define the full sales promotion program First, they must decide on the size of the incentive The marketer must then decide how to promote and distribute the promotion program Finally, the marketer has to decide on the sales-promotion budget Pretesting and Implementing the Plan Whenever possible, sales promotion tools should be pretested to determine if they are appropriate and of the right incentive size Evaluating the Results Even though result evaluation is important, many companies fail to evaluate their sales promotion programs Many evaluation methods are available, the most common of which is sales comparisons before, during, and after a promotion

Consumer Promotion Tools Samples Coupons Premiums Patronage Rewards Point-of-Purchase (POP) Displays Contests The main consumer promotion tools include samples, coupons, premiums, patronage rewards, point-of-purchase displays, contests, sweepstakes, and games Samples Offers of a trial amount of a product Some samples are free For others, the company charges a small amount to offset its cost Coupons Certificates that offer buyers savings when they purchase specified products Overcouponing should be avoided because it lowers the price so the coupon no longer offers a competitive advantage Premiums Goods offered either free or at low cost as an incentive to buy a product Patronage rewards Cash or other awards for regular use of a company’s products or services Point-of-purchase (POP) promotions displays and demonstrations that take place at the point of purchase or sale POP may be used: To disseminate information about the company’s products or services To sell additional products and services, thus adding to gross revenue Contests A contest calls for consumers to submit an entry to be judged by a panel Sweepstakes A sweepstakes calls for consumers to submit their names for a drawing Games A game presents consumers with something every time they buy bingo numbers or missing letters that may or may not help them win a prize Sweepstakes Games

Key Terms Contests, sweepstakes, and games Give consumers a chance to win something, such as cash or a trip. Corporate communications This activity covers internal and external communications and promotes understanding of an organization. Counseling Involves advising management about public issues and company positions and image. Coupons Certificates that offer buyers savings when they purchase specified products. Lobbying Dealing with legislators and government officials to promote or defeat legislation and regulation. Patronage rewards Cash or other awards for regular use of a company’s products or services. Point-of-purchase (POP) promotions Includes displays and demonstrations that take place at the time of sale. Premiums Goods offered either free or at low cost as an incentive to buy a product.

Key Terms (cont.) Press relations Placing newsworthy information into the news media to attract attention. Press release Information released to the media about certain new products or services. Product publicity Various efforts to publicize specific products. Public relations The process by which a positive image and customer preference is created through third- party endorsement. Sales promotion Consists of short- term incentives to encourage the purchase or sale of a product or service. Samples Offers of a trial amount of a product.