Marketing-Oriented Public Relations and Word-of-Mouth Management

1. CHAPTER18 Marketing-Oriented Public Relations and Word-of-Mouth Management © 2010 South-Western, a part of Cengage LearningAll rights reserved.

2. Chapter ObjectivesAfter reading this chapter you should be able to: • Appreciate the nature and role of marketing public relations (MPR). • Discern the differences between proactive and reactive MPR. • Comprehend the types of commercial rumors and how to control them. • Appreciate the importance of word-of-mouth (WOM) influence. • Understand the role of marketing public relations in creating favorable WOM and building brand buzz. © 2010 South-Western, a part of Cengage Learning. All rights reserved. 18–2

3. Public Relations and Integrated Marcom • General Public Relations (PR) • Is an organizational activity involved with fostering goodwill between a firm and all of its various publics • Employees, suppliers, stockholders, governments, the public, labor groups, citizen action groups, and consumers • Marketing Public Relations (MPR) • Involves an organization’s interactions with actual or prospective customers • Performs an increasingly important marcom function for both B2C and B2B firms • Are more credible and less expensive in comparison with advertisements © 2010 South-Western, a part of Cengage Learning. All rights reserved.

4. MPR versus Advertising • PR (or MPR) in Integrated Marcom • Has been the subject of much debate • Has traditionally been specialized and limited • Has credibility that can be used to introduce new products using little advertising • Works best for capturing the attention of the media when introducing new and innovative products • Drawbacks to MPR • Not all products can rely on publicity • Free publicity lasts only as long as the product is newsworthy © 2010 South-Western, a part of Cengage Learning. All rights reserved.

5. Marketing-Oriented Public Relations (MPR) • Proactive MPR • Is a tool for communicating a brand’s merits • Is used in conjunction with other marcom tools such as advertising and sales promotions • Is dictated by a firm’s marketing objectives • Is offensively oriented and opportunity seeking • Reactive MPR • Is the conduct of public relations in response to outside influences • Provides a quick response to repair firm’s reputation, prevent market erosion, and regain lost sales © 2010 South-Western, a part of Cengage Learning. All rights reserved.

6. Forms of Proactive MPR © 2010 South-Western, a part of Cengage Learning. All rights reserved.

7. Reactive MPR and Crisis Management • Reactive MPR • Addresses factors in a product’s defects and failures • Provides responses to unanticipated market events • Crisis Management • Provides quick and positive responses to negative publicity to reassure consumers and lessen the damage following negative publicity © 2010 South-Western, a part of Cengage Learning. All rights reserved.

8. The Special Case of Rumors and Urban Legends Types of Rumors CommercialRumors ConspiracyRumors ContaminationRumors © 2010 South-Western, a part of Cengage Learning. All rights reserved.

9. What Is the Best Way to Handle a Rumor? • Antirumor Campaign Activities: • Deciding on the specific points in the rumor that need to be refuted • Emphasizing that the conspiracy or contamination rumor is untrue and unfair • Picking appropriate media and vehicles for delivering the antirumor message • Selecting a credible spokesperson © 2010 South-Western, a part of Cengage Learning. All rights reserved.

10. Word-of-Mouth Influence • Word-of-Mouth (WOM) • Is both complex and difficult for brand managers to attempt to control • Factors Affecting WOM’s Influence • Tie strength of interpersonal relationships of persons in B2C and/or B2B social networks • How well marketing communicators use advertising and “buzz” efforts to stimulate positive WOM • The amount of prestige accorded by others to opinion leaders and markets mavens who act as informers, persuaders, and confirmers © 2010 South-Western, a part of Cengage Learning. All rights reserved.

11. Preventing Negative WOM • Manufacturers • Providing detailed warranty and complaint-procedure information on labels or in package inserts • Retailers • Employees with positive attitudes • Store signs and inserts in monthly billings • Offer toll-free numbers and e-mail addresses © 2010 South-Western, a part of Cengage Learning. All rights reserved.

12. Creating Buzz • Buzz Creation • Is the systematic and organized effort to encourage people to talk favorably about a particular brand—either over the fence or over the Internet—and to recommend its usage to others who are part of their social network • Proactive Efforts • Guerrilla marketing • Viral marketing • Diffusion marketing • Street marketing © 2010 South-Western, a part of Cengage Learning. All rights reserved.

13. Generating Buzz Is Akin to Creating an Epidemic Rules for Reaching the Buzz Tipping Point Law of the Few Stickiness Factor Power of Context © 2010 South-Western, a part of Cengage Learning. All rights reserved.

14. Igniting Explosive Self-Generating Demand Select and Seed the Vanguard Design Unique or Visible Product RationSupply Principles of an Explosive Self-GeneratingDemand (ESGD) Structure Nurture the Grass Roots Tap the Powerof Lists Use CelebrityIcons © 2010 South-Western, a part of Cengage Learning. All rights reserved.