Copyright © 2001, Prentice Hall, Inc. CHAPTER 19

2Copyright ©2001 Prentice Hall, Inc. Why has dealing with consumers and investors become so important for public relations? Consumers & Investors FOR STARTERS: Advertising“Noise” Competition SavvyConsumers KnowledgeableInvestors

3Copyright ©2001 Prentice Hall, Inc. Tyco Toys, Inc. n Toy Fair Breakfast n Media Day at Sesame Place Theme Park n Elmo sent to Rosie O’Donnell n 15,000 media mentions Source of Elmo character: [accessed 6/16/2000]

4Copyright ©2001 Prentice Hall, Inc. Consumer Movement History Let’s Discuss 1872 – Criminal Fraud Statute 1900s – Muckrakers  The Jungle  Food and Drug Act  Food, Drug, and Cosmetic Act 1887 – Interstate Commerce Commission

5Copyright ©2001 Prentice Hall, Inc. JFK’s Consumer Bill of Rights Right to Choose Right to Safety Right to Safety Right to Be Informed Right to Be Informed Right to Be Heard

6Copyright ©2001 Prentice Hall, Inc. What does each of the following federal agencies do? Federal Consumer Agencies QUICK QUIZ Federal Trade Commission Federal Trade Commission n Regulates television and radio advertising n Covers areas not included in national advertising (general litigation division) n Enforces consumer credit program (fair credit reporting, truth in packaging)

7Copyright ©2001 Prentice Hall, Inc. What does each of the following federal agencies do? Federal Consumer Agencies QUICK QUIZ Justice Department n Enforces consumer protection measures such as the Truth in Lending Act and Product Safety Act n Runs anti-trust division (Microsoft suit)

8Copyright ©2001 Prentice Hall, Inc. What does each of the following federal agencies do? Federal Consumer Agencies QUICK QUIZ Food & Drug Administration n Protects consumers from hazardous items: foods, drugs, cosmetics, therapeutic and radiological devices, food additives, serums, and vaccines

9Copyright ©2001 Prentice Hall, Inc. What does each of the following federal agencies do? Federal Consumer Agencies QUICK QUIZ Office of Consumer Affairs n Publishes literature informing the public of recent developments in consumer affairs n Oversees product safety (seatbelts, strollers, etc.) Consumer Product Safety Commission

10Copyright ©2001 Prentice Hall, Inc. Name some consumer watchdog vehicles or groups. QUICK QUIZ n Consumers Union (publishes Consumer Reports) n The Consumer Federation of America n The Internet

11Copyright ©2001 Prentice Hall, Inc. Business’s Consumer Relations Division Duties Handling Complaints Developing Consumer Programs Evaluating Service Approaches Developing Guidelines to Evaluate Products & Services Developing Field-Training Programs Evaluating Company Effectiveness in Showing Concern for Customers

12Copyright ©2001 Prentice Hall, Inc. Every customer has the following rights: Chrysler Corporation’s “Customer’s Bill of Rights” Grievance Opportunities Satisfaction Quality Long-term Protection Service with a Smile Safe Vehicles

13Copyright ©2001 Prentice Hall, Inc. Consumerist Objectives Let’s Discuss Explain how each would benefit a company: Marketing New Items / Services Marketing New Items / Services Keeping Old Customers Attracting New Customers Reducing Costs Handling Complaints

14Copyright ©2001 Prentice Hall, Inc. n Investigate complaints made against the firm n Provide a central location for customers who seek redress n Monitor difficulties customers have with products n Influence organizations to improve service

15Copyright ©2001 Prentice Hall, Inc. Timely and valuable communications that gain and maintain shareholder support DEFINE:

16Copyright ©2001 Prentice Hall, Inc. What is a company’s CURRENCY ? Its STOCK PRICE

17Copyright ©2001 Prentice Hall, Inc. Any fact that would be important to an investor making an investment decision DEFINE:

18Copyright ©2001 Prentice Hall, Inc. Examples of Material Information: n Proposed mergers or acquisitions n Changed dividend policy n Determination of earnings n Acquisition or loss of significant business contract n Major management changes n Significant change in capital investment plans

19Copyright ©2001 Prentice Hall, Inc. Examples of Material Information: n Purchase or sale of a major asset n Incurring a major debt or selling a significant amount of equity annuities n Pending significant legislation n A major discovery or innovation n Marketing a new product

20Copyright ©2001 Prentice Hall, Inc. OVERVIEW: n Company description n Letter to shareholders n Financial review n Explanation/analysis n Management/marketing discussions n Graphics Annual Reports:

21Copyright ©2001 Prentice Hall, Inc. OVERVIEW: Comparison of current performance with previous year’s quarter performance Quarterly Reports: n In-person meetings n Q&A sessions n Speeches n Stockholder voting Annual Meetings:

22Copyright ©2001 Prentice Hall, Inc. OVERVIEW: Follow-up quarterly reports to answer questions Conference Calls: n In-person meetings n Q&A sessions n Speeches n Stockholder voting Media Contact & Monitoring:

23Copyright ©2001 Prentice Hall, Inc. OVERVIEW: n Homepage / Web site n SEC documents online n FAQs n Links to financial data Internet Investor Relations: