The Dynamic Changing Nature Of Business Environment Marketing Essay

The ever- changing Changing Nature Of Business Environment selling EssayThe dynamic changing nature of line of business environment has necessitated the continuous development and refinement of an judicatureal strategy encompassing its harvest-tide or services, operational activities and closely signifi lavtly the marketing chat scheme. Marketing orientation (the customer oriented business philosophy) has designate customer unavoidably and satisfaction as the ut intimately priority of an disposal. Organisations outright sought to seek a competitive march by establishing superior dent mental picture. harmonise to Asia Market Research (2003), it is due to the proposition that consumers buy not altogether a product (commodity), besides also the image associated with the product, much(prenominal) as power, wealth, sophistication, and or so historicly assignment and association with other users of the sign. A companys in baron to prolong its desired differentiati on or coming upon basic look forations of performance standards, lapses in technical quality, culpable accidents affecting the safety of unmarrieds, poor service electric probable or unethical conduct, etc. cause shun humankindity of its betray which leads to an adverse impact on its chump image.Although, a negative advancement influences consumer purchasing behaviour, an capable reaction to such crisis asshole interdict the negative deformity reputation kept to a minimum. An inadequate reaction may result in much negative ordinaryity, whereby consumers entrust never or hardly ever buy the respective shop article again (Riezebos, 2002). In purchase order to rec everyplace the brand from a colossal damage ca apply by such a crisis and prevent forming further rumour, a reliable, unambiguous and comprehensive kernel should be communicated to the unrestricted. The message should express the organisations concern regarding the crisis and should contain information o n its efforts to recover from that crisis.However, most popular forms of communion in incorporate such as announce, personal selling, direct marketing, sales promotion, etc. ask loosen populars confidence because of their unpointed exploitation and therefore can not be relied on to attain greater attention of the targeted sense of hearing in such a sophisticated brand crisis parley. Moreover, the extent of information supplied through these mediums is not adequate for changing normal convictions. In this context, frequent traffic (PR) is the sole medium which is perceived to be relatively unbiased and effective in establishing direct communication with the mass. During a brand crisis, PR assists an organisation to prove a matter in its own point of view and creates a platform to apology to the reality for any mistake. Apart from that, properly planned PR initiatives extend the ground for communicating with target earshot of an organisation and thus reduce the risk of adverse impact on its brand reputation. This provides the context for an change magnitude importance and emphasis given by brand managers on exploiting the deliberate potential of public dealings to assist in protecting, differentiating and up cultivate watering an organisations brand image.Rationale for the Chosen TopicThere have been a throttle number of queryes carried out into the utilization of public relations in brand image crisis way. Although, some researchers have put emphasis on the military strength of public relations in brand image crisis communications, most of them have considered it as a secondary function in line with other areas of marketing communications. In a lit, Grunig et al. (2002) attempt to establish PR as an independent corporate communication function and claimed its attitudinal transcendence over other areas of marketing communications. Kotler and Armstrong (1996) have also acknowledged the significance of public relations over other commun ications admixture in crisis management by stating that consumers are fin times more(prenominal) same(p)ly to be influenced by editorial coverage than by advertising. (p. 617). However, none of these researchers has attempted to provide broad evidence to support the credibility of PR in brand image crisis management.Therefore, this study is vital to live up to up this substantive research gap. The study will evaluate the significance of PR excites in upholding a brands reputation during image crisis. The research findings will aid the decision making of managers who are responsible for corporate communications, marketing or branding. Besides, this will provide them with the guidance to determine the appropriate actions to be taken when a crisis hits the brand image. Most authoritatively, the study will direct an organisation to allocate PR budget indoors its communications expenditure. Moreover, this will help managers to identify suitable PR programs or proficiencys for dif ferent nature of image crisis. Last but not least, the study will provide implications of best practice among in-house PR practice and hiring a PR consultancy.Statement of the ProblemThe principal intent of this study is to establish that organisations now a day prefer to undertake public relations campaigns than other marketing communications mix whenever a crisis hits their brand image. The motive behind such p fiber might be that, people (i.e. the targeted audience of a PR campaign) perceive the medias and techniques used in a PR campaign to be relatively unbiased source of information than other widely used communications mix such as advertising, sales promotion, personal selling, direct and interactive marketing, etc. So, the information delivered through PR programs is arrogantly authorized by public. Therefore, an organisation can easily achieve its crisis communications objective i.e. restoring the brand image through addressing negative issues in positive manner or apolo gizing to the public if necessary. However, among a manakin of PR programs and techniques, the most persuasive one need to be identified and consequences of both in-house PR practice and hiring a PR consultancy should be addressed.Research QuestionsAnswers to the following questions are desirable in order to accomplish the research destinationIs there any shift in the preference and usage of public relations in brand image crisis communications?If such a shift has taken place, how much increase has there been in unlike organisations public relations budget?Is public relations credible in defending negative furtherance during brand image crisis? To what extent is it effective than other channels of marketing communications in influencing public opinion and restoring a brand?Which specific type of PR program or technique is considered most persuasive for changing consumers cognition? What are the profound reasons for such consideration?Which one does an organisation regard as be st practice for crisis communications? Holding an in-house department for PR practice? Or hiring an extraneous PR consultancy? What dominates its choice of best practice?Research Aims ObjectivesThe significance of the proposed study rest on the following five issuesTo analyse the degree of preference given to PR as a brand image crisis communications function in different organisationsTo determine the level of shift in various organisations PR budgetTo evaluate the credibility of public relations in defending negative publicity during brand image crisis and to compare its effectiveness with other channels of marketing communications in influencing public opinionTo identify the most persuasive PR program or technique among various practices for changing consumers perception.To establish the best practice in the midst of holding an in-house department for PR practice and hiring an external PR consultancyStructure of the DissertationChapter 2Literature ReviewProvides a review of the relevant previous research, literature and assumptions primarily consisting of various models, theories, analysis, organisational practices and practitioners remark regarding public relations, brand image crisis, etc. In a whole, this chapter provides a conceptual framework of the study.Chapter 3MethodologyDiscusses chosen research method to achieve research aims and objectives (i.e. research design, sampling method, data collection procedure, analytical techniques, ethics, reliability, validity and the pattern of presentation of gathered data).Chapter 4Findings, epitome DiscussionPresent the gathered data with relevant analysis. Provides a comparison among the findings and the emerged frame of reference of this study and summaries research findings in glister of research questions.Chapter 5Conclusions RecommendationsIncludes summary, comment, recommendations and implications for organisations, limitations of the study and scope for future research.Chapter 2Literature ReviewThi s chapter provides a critical review of the previous research, literature, assumptions and organisational implications which are relevant to this research. In light of related theoretical models, issues, concepts, analysis, organisational practices and practitioners remark, it presents a conceptual framework of the study. The literature review is divided into seven study sectionsMarketing communications Mix commonplace dealing (PR) soft touch shit Image Crisis Its Impact social function of creation dealing in betray Image Crisis communication theoryEthical Issues in Public RelationsSummaryMarketing communication theory MixMarketing communications mix refers to the various channels used to communicate a promotional message of a companys offerings to the target customers. According to Rowley (2006), an appropriate marketing communications mix is fundamental to achieve the objectives of any given promotion strategy. Lancaster, Massingham and Ashford (2002) states that, the basi c purpose of different communication modes is to communicate with customers in order to persuade them to buy the companys products. Among various modes of marketing communications Kotler and Armstrong (1996) defines five study channels as followingAdvertising Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.Sales forwarding A variety of short-term incentives to encourage haul or purchase of a product or service.Public Relations Publicity A variety of programs designed to promote or protect a companys image or its individual products.Personal change Face -to-face interaction with one or more prospective purchaser for the purpose of making presentations, say questions and procuring orders.Direct Interactive Marketing Use of mail, telephone, fax, e-mail or internet to communicate directly with or solicit response or dialogue from specific customers and prospects.Public Relations (PR)DefinationPublic relations practiti oners and scholars hold different assumptions in terms of defining and describing the purpose and effects of public relations. According to the Chartered make for of Public Relations (2008), Public relations is the discipline which looks after reputation, with the aim of earning understanding and support and influencing opinion and behaviour. It is the planned and sustained effort to establish and maintain goodwill and mutual understanding amid an organisation and its publics. This definition provides an idea that public relations is one of the corporate communication functions that focus on establishing a superior brand image of the organisation or its products or services. Kotler and Armstrong (1996, p.616) defines public relations as a variety of programs designed to promote or protect a companys image or its individual products. According to Grunig (1992), some scholars make out public relations as dissemination of information, resolution of conflict or promotion of understan ding (p.4). He suggests an academic definition for public relations as the management of communication between an organisation and its publics. McElreath (1996) describes public relations as a management function that uses communications to facilitate kind and understanding between an organisation and its publics (p.3). Cutlip et al. (2000) defines PR as the management function that establishes and maintains mutually beneficial relationships between an government and the publics on whom its success or failure depends (p. 6). Again, Stanley (1982) states it as a management function that determines the attitudes and opinions of the organisations publics, identifies its policies with the absorbs of its publics, and formulates and executes a programme of action to earn the understanding and goodwill of its publics (p. 40).However, all these definitions took the organisational point of view in describing public relations function. Johnston and Zawawi (2003) describes PR as the ethical and strategic management of communication and relationships in order to relieve oneself and develop coalitions and policy, identify and manage issues and create and direct messages to achieve sound outcomes within a socially responsible framework (p.6). Jane, Morgan and Summers (2005) provides a definition stating the role of public relations in management Public relation is be as a management function that evaluates public attitudes, identifies the policies and procedures of an organisation with the public interest and executes programs of action (and Communication) to earn public understanding and acceptance (p. 178)Some management educators and professional managers equate communication with techniques such as the writing of reports or letters, interpersonal communication, or publicity and media relations. They eliminate the term Public Relations from their policy and create new titles for the functions such as public affairs, issues management, corporate communications, or ex ternal relations(Grunig, L.A., Grunig, J.E and Dozier, D.M., 2002).Definition of Public in a PR CampaignA public relations campaign must not always be targeted at customers. It can be aimed at any individual or free radical irrespective of age, gender, profession, group, social status, etc. According to Kotler and Armstrong (1996, p.616), A public is any group that has an actual or potential interest in or impact on a companys ability to achieve its objectives. The intended audience for the campaign can be any one from the stakeholder groups. The purpose of public relations campaign is to assist organisations in building relationships with the publics from the several categories of stakeholders (Grunig, L.A., Grunig, J.E and Dozier, D.M., 2002). Lancaster, Massingham and Ashford (2002) describe the following stakeholders as publics targeted at a PR campaignThe CommunityEmployeesThe GovernmentThe Financial CommunityDistributorsConsumersOpinion Leaderselectronic News MediaBrandDefin itionThe predominant concept of the brand can be traced back to product marketing where the role of branding and brand management has been primarily to create differentiation and preference for a product or service in the mind of the customer (Riezebos, 2002). The American Marketing Association defines a brand as a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors (Kotler and Armstrong, 1996, p.418). Branding is an integrated part of Marketing and an essential expertise of a professional marketer is the ability to build, sustain, defend and increase brand image. other definition goes with the customers perspective a product or service, which a customer perceives to have distinctive benefits beyond price and operable performance (Knox et al. 2000).The process of developing a brand is called Branding. According to Randall (2000), Branding is a fundamental strategic process that involves all parts of the firm in its delivery. It is about marketing, but is not confined to the marketing department. The brand must always deliver value, and the value must be defined in consumer terms. Mathieson (2005) describes branding as the means by which an organisation builds a compelling consumer experience that manage the companys offerings from the competition, generates sales and/ or creates an emotional bond with customers. Kapferer (2004, p.38) symbolizes the term brand to six levels of meaningAttributes A brand brings to mind certain attributes. Mercedes suggests high-priced, well-built, well-engineered, durable, high-prestige automobiles.Benefits Attributes must be translated into functional and emotional benefits. The attribute durable could translate into the functional benefit I wont have to buy another car for several years. The attribute expensive translates into the emotional benefit, The car makes me feel classic and ad mired.Values The brand also says something about the producers values. Mercedes stands for high performance, safety, and prestige. farming The brand may present a certain culture. The Mercedes represents German Culture organised, efficient, high quality.Personality The brand can project a certain personality. Mercedes may suggest a no-nonsense boss (person), a reigning lion (animal) or an austere palace (object).User The brand suggests the kind of consumer who buys or uses the product. We would expect to see a 55 year-old top executive behind the wheel of a Mercedes, not a 20-year old secretary. look 2.2 Burnett Model of Brand Dimensions Source Randall, Geoffrey (2000), Branding A Practical Guide to preparedness Your Strategy, 2nd rev edn, Kogan Page Ltd, London, p. 7DifferencesEssencePersonality/ ImageSourceWhat is it?What is to for?What does it do?How is it break-dance?How is it different?What does the company stand for?What is the aim?How do peoplefeel about it?Do they like / r espect it?FunctionsBrand IdentityKapferer (2004) presents a comprehensive study of brands and proposes the idea of brand identity. He indicates the most important parts of brands that make up the whole name, logo, design, packaging, etc. which he describes individually as brand identity. Schultz and Bailey (2000) describe brand identity as the outward manifestation, name and visual appearance of the brand that distinguish customers identification and perception of a product or services.Brand ImageThe term brand image depicts the perception of the brand in the mind of the consumers. According to ESOMAR (2006), The total impression created in the mind of a potential consumer by a brand and all its functional and emotional associations. The total image can be seen as the sum of several images such as the product, user, occasion, service and personality images. Customers hold a set of brand beliefs which makes a brand stand alone to other. The set of beliefs about a brand make up the br and image (Kotler and Armstrong, 1996, p.206). Yadin (2002) defines brand image as perception of market of the brand identity. However, Mooij (2005) suggests that the brand image is not necessarily the same as the brand characteristics the marketer uses to build the brand identity. He points out that many global brands that desire a consistent brand identity and hope this will result in a consistent brand image end up with different brand image across cultures. According to Rugimbana and Nwankwo (2003), a companys history, style and dynamism are often the determining factors in creation of a brand image. Kotler and Armstrong (1996) again claim that consumers brand image vary with their experiences as filtered by effects of selectiveBrand IdentitySenderMessagesReceiverSignals transmittedProductsPeoplePlacesCommunicationBrand Image otherwise sources of InspirationMemoryOpportunismIdealismCompetition and Noiseperception, selective deformation and selective retention.Figure2.3 How Brand Identity Characterize Brand Image by Kapferer, J.-N. (2004) Source Kapferer, J.-N. (2004), Strategic Brand Management, Kogan Page, London, p.98Brand Image Crisis Its ImpactAs stated in the first chapter, a companys inability to maintain its desired differentiation or meeting basic expectations of performance standards, lapses in technical quality, culpable accidents affecting the safety of individuals, poor service potential or unethical conduct cause negative publicity of its brand which leads to an adverse impact on its brand image. Such a crisis can even unmake the most recognized brands. Millar and Heath (2003) describes several incidents which can tarnish the brand image both human-made and natural, such as tampering with a product, discovery of criminal legal action, unwanted or hostile takeover, loss of an important customer, environmental accidents, etc. Due to the modernization and increased speed of information dissemination and reception, Millar and Heath (2003) state s that, intelligence information of a crisis can spread so quickly that it can potentially paralyze the top management before they can effectively control the crisis situation. Negative publicity can slow down the fix function of the organisation.Riezebos (2002), states through the publicity the norms and values and the operating procedure of the organisation are brought under word (p.239). He divides the factors that influence the extent to which a brand can be confronted with negative publicity into troika areas market, product and brand related factors. According to Riezebos (2002) when there is fierceness of competition in the market, an incident can and will be more quickly used to wage a negative publicity by competitors. Again a product related crisis can occur when products are not capable of maintaining standards or affect the consumer. Brand related crisis can be negative brand perception or experience. various Natures of Crisis that Affect Brand ImageCrowthers (2007), Baines and Egan (2004) and Aaker (1996) suggest some frequent crisis that organisations usually undergo and which affects its brandsGovernment probeProduct recallEpidemic of food poisoning caused by companies productsControversial law suit direction of discrimination establish on race, sexual preference or genderBig disruption in serviceLapses in performance standardsSerious injury to someone within or outside of the organizationPoor technical qualityStakeholders ProtestWorkers Strikeunethical conductPhysical violence between co-workersdiscovery of criminal activityInsider trading greaseSafety Hazard manipulation of Illegal ingredients or meansPlummeting stock priceSexual harassment caseDramatic downsizing causing significant job loss in a geographic regionChemical spillRadiation news leakA major competitor has a huge crisis, throwing attention on your companyCaught in a lieFalse advertising accusationCelebrity spokesperson embroiled in personal scandalClosing of a facilityRole of Public Relations in Brand Image Crisis CommunicationsPotential Significance Credibility of PRDefending Bad Reputation The most important role of a PR campaign is to counteract negative publicity surrounding the organisation and its brands (Haig, 2003). Communicating positive information about the organisation through press release, newsletters, press kits, etc. are perceived to be unbiased by the public and thus prevent bad reputation. Jane, Morgan and Summers (2005) defines role of public relations in crisis management as programs of action (and Communication) to earn public understanding and acceptance (p. 178)Considerable Steps in Management of Brand Image CrisisHubbard (2006) suggestes five steps for properly managing a crisis through PRAddressing the public without delay following the discovery of the crisisMaintaining honesty since the community is keener to forgive and forget an honest fault than a calculated lieThe organisation facing crisis ought to be informative since the press as well as the community will generate their own assumptions if sufficient communication does not take place resulting rumours can cause considerably more damage to the organisation than the reality.Showing concern and care for people because public will be more tolerant if they realize that the organisation cares about the victims of the crisis.Maintaining two-way relationships in order to be informed of the status of public opinion.Shift in the Practice of PR in Brand Image Crisis CommunicationsIn recent years efforts to control corporate crisis, or crisis management has matured as a public relations function and grown into a specialty area (Millar and Heath, 2003). The underlying reasons behind this development include the appreciation of electronic media as primary source of news, the increasing speed of the media to play information, improved database management systems, increased number of special interest groups and efficiency of media. The following figure shows entireness FMCG executives of ten leading firms emphasis given to various communications mix as a crisis communication function.Here, + = increase, - = decrease , = No Change NC = No CommentsFigure 2.6 Perception of Change in Marketing Communications in terms of Emphasis (1980-89) source Kitchen, P.J. (1993), Public Relations A Rational for its Development Usage within UK FMCG Firms, European Journal of Marketing, Volume 27(7), p. 59The figure shows that six of ten companies emphasis on advertising in crisis communication declined, three showed increase and one remained unchanged. The companies which demonstrated movement away from advertising gave reason to increased apostrophize of advertisement. Again nine out of ten firms indicated decrease in personal selling showing reason to concentration of grocery trade leading to centralization of buying activity by multiples. However, nine companies stated increased emphasis on PR and most of these appreciated the effectiveness of PR a nd blamed the increased advertisement cost behind such shift.Increase in Organisations PR Budget ExpenditureThere is a significant increase in organisations PR budget in recent years. A study by Paley (2006) revealed that, total PR expenditure of UK organisations in 1991 was only 5 billion which increased to 16 billion in 2005 which shows 11 billion increase in 14 years whereas advertisement expenditure increased 8 billion. Moreover, point here to be noted that, yeasty public relations can affect public awareness at a fraction of cost of advertising (Kotler and Armstrong, 1996). The company does not require compensating for the space or time taken in the media. It compensates only for the team or individual who write and pass the story or organise any occasion.Communications MixApproximate Expenditure (in billions)1991199520002005Advertising14172022Sales Promotion58.51616Public Relations491719 marketing7111617Direct Marketing581211Table 2.2 Approximate Estimate of Communications M ix Expenditure in UK source Paley, Norton (2006), The Managers Guide to war-ridden Marketing Strategies, Thorogood, London (N.B. Industry Estimates has wide variations)PR Other Areas of Marketing CommunicationsThere has been a lot of debate regarding the relationship between public relations and other areas marketing communications mix. Academics, scholars, practitioners or managers present different views in comparing PR and other marketing functions. Many of the arguments are based on the matter of outlining the relevant roles of the two functions. From the marketing point of view, the primary function of a public relations campaign is publicity (Kotler, P. and Armstrong, G., 1996). According to Shimp and Delozier (1986), Public relations provides tactical support for marketing communications. However, this theory contradicts with PR practitioners and academics perception who describes the role of public relations is to manage the relationships between an organisation and those strategically important constituencies (can be any type of stakeholder) within its environment (Cutlip et al., 1994).After a careful study Kotler and Mindak (1978) suggested five models to demonstrate the relationship between an organisations public relations and other areas of marketing communicationsseparate but equal functionsseparate but overlapping functionsmarketing as the dominant functionpublic relations as the dominant functionpublic relations and marketing as the same function.Kotler and Mindak (1978) claimed that any integrity model can not demonstrate the relationship between these two. However, they claimed that there is a broader relation between two of these functions i.e. to uphold the brand image. But, Grunig and Hunt (1984) strongly disagree to accept this as relationship. According to them this is upright similarity of outcomes not functionsMarketing/PRImage AssessmentMedia StrategyCorporate Advertising birth MarketingDirect MailBrandingSponsorshipsPromotionsPub lic RelationsPublicationsEventsLobbyingCommunity relationsMedia Relations mixer InvestmentCrisis CommunicationsIssues ManagementMarketingMarket AssessmentCustomer SegmentationCustomer RelationsProduct DevelopmentClient ServicingTelemarketingSalesPont of Sales PromotionAdvertisingFigure 2.7 Relation between Marketing Public Relations Source Johnston, Jane and Zawawi, Clara (2003), Public Relations, 2nd edn, Allen Unwin, Australia, p.132.5.6 PR Vs Other Areas of Marketing CommunicationsSource Article Filter online (Cited 12 April 2008) Available from A theory of Grunig, J.E and Grunig, L.A. (1992, p.357) tried to distinguish PR from marketing functions claiming that marketing and public relations serve different functions and that public relations can not be excellent if it is subjugated to marketing function. The authors acknowledge the signif