You just finished reading a great newspaper story about a local restaurant even though you know the company has experienced several lawsuits and many customer complaints. The news story makes the restaurant sound like a great corporate citizen and the best place to eat in town. Sometimes a company gets “free” publicity such as news stories or reviews about its products and services in the mass media, even though the organization has no control over the content of the stories and might not even know about their publication. How did a restaurant with so many complaints manage to get such a great story written about it? How did it get good coverage when it might not be deserved? Perhaps the restaurant used part of its promotion budget to pay for public relations efforts to generate positive stories and positive publicity.
Public relations (PR) includes information that an organization wants its public (customers, employees, stakeholders, general public) to know. PR involves creating a positive image for a company, an offering, or a person via publicity. PR has become more important in recent years because there are now so many media outlets people pay attention to, including YouTube, social networking sites, and blogs. It’s pretty easy for anyone to say anything about a company in public forum. Indeed, publicity is a double-edged sword; it can result in negative news, such as a poor review of a movie, restaurant, or car, or positive news. Organizations work hard to get favorable news stories, so while publicity sounds free, building relationships with journalists does cost money. Just like advertising (see Chapter 11 "Advertising, Integrated Marketing Communications, and the Changing Media Landscape" for discussion), public relations and sales promotions are critical components of the promotion budget for many firms.
Organizations also use sales promotions to generate positive customer perceptions and sales. Sales promotions are promotional activities companies do in addition to advertising, public relations, and personal selling in order to sell a product. Issuing coupons, running contests and games, and offering rebates and mail-in offers are examples of sales promotions. In this chapter, we examine the public relations and sales promotion tools that organizations use and how they contribute to a company’s success.