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Public Relations, Regulations and Sponsorship Programs13•Public relations

–Role of public relations–Social responsibility

•Regulating marketing communication

–Federal Trade Commission–Industry regulations

•Sponsorship marketing

Chapter Overview

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Sponsorships and Causes

• What do you think about the WWF and the companies that sponsor it?

• Should companies be involved in sponsoring sporting events, rodeos and music events?

• Should companies contribute or participate in social causes such as the American Cancer Society?

• Would you switch brands based on causes the company or brand supports?

• How do you feel about the naming of sports stadiums by companies?

13Discussion Slide

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• Monitor internal and external publics.• Provide positive information to each

public that reinforces the IMC plan.• React quickly to any shift by any of the

publics from the desired position.

F I G U R E 1 3 . 1

Public Relations Functions

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• Employees• Unions• Management• Shareholders• Channel

members• Customers

• Media• Local community• Financial community• Special-interest

groups• Government

F I G U R E 1 3 . 2

Stakeholders of Public Relations

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Employees need to be aware of what is being said in advertisements and on the Internet.

Motorola’s Web site

Http://www.motorola.com

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Public Relations Events

• Altruistic activities• Cause-related marketing• Benefits of supporting causes

• Additional customers• Increased profits• Goodwill• Better relations with governmental

agencies• Green marketing

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Cause-Related Marketing

• Support of a social cause through financial transactions with the firm’s customers.

• Cause-related marketing studies:• 83% of consumers have a more positive image of

companies that support causes the customer cares about.

• Most Americans believe companies should have a positive impact on environment and community.

• 76% willing to switch to a brand that supports a cause they believe in if price and quality perceived equal.

• National vs local causes• Impact greater if the firm can utilize its products

in the social cause.

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YWCA Web site: http://www.ywca.org

• Improve public schools (52%)• Dropout prevention (34%)• Scholarships (28%)• Cleanup environment (27%)• Community health education (25%)

F I G U R E 1 3 . 3

Causes Consumers Prefer

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McDonald’s reminded the public of its support for the Olympics with a series of advertisements.

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• Corporate newsletters• Internal communications• Media news releases• Stockholder correspondence• Annual reports• Special events

F I G U R E 1 3 . 6

Public Relations Tools

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Regulating Marketing Communications

• Unfair and deceptive marketing practices• Lanham Act (1947)

• An advertisement or communication is deceptive or misleading if:• A substantial number of people or “typical

person” is left with false impression or misrepresentation.

• The misrepresentation induces people or the “typical person” to make a purchase.

• Deception vs puffery

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• Federal Trade Commission (FTC)• Food & Drug Administration (FDA)• Federal Communications Commission (FCC)• US Postal Service (USPS)• Bureau of Alcohol, Tobacco and Firearms

(BATF)

F I G U R E 1 3 . 7

Governmental Regulatory Agencies

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Federal Trade Commission(FTC)

• Created in 1914 by passage of Federal Trade Commission Act.

• Original intent was to enforce anti-trust laws.• FTC authority expanded in 1938 with Wheeler-Lea

Amendment.• Given power to stop unfair and deceptive

advertising practices.• Granted FTC access to courts to enforce their

decisions.

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How an FTC investigation begins

• Consumers• Businesses• Congress• Media

Complaints can be lodged by any of the following

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FTC Actions

• Consent order• Administrative complaint• Cease and desist order• Full commission hearing• Appeal to U.S. Court of

Appeals• Corrective advertising order• Trade regulation ruling

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FTC Criteria

• Is the typical person misled by the marketing communication?

• Does the marketing communication lead the typical person to make a purchase or pursue some other type of activity?

• Is the claim mere puffery or does it have to be substantiated?

• Is the claim substantiated by competent or reliable evidence?

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To substantiate its claim that Kleenex is softer the company conducted touch tests involving consumers.

Substantiating that Kleenex is “made with 24% more cottony, soft fiber,” as the ad claims, would require some type of lab test.

Click image to enlarge.

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• Better Business Bureau• National Advertising Division

(NAD)• National Advertising Review

Board (NARB)

F I G U R E 1 3 . 8Industry Regulation

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Sponsorship Marketing Objectives

• Enhance company image.• Increase firm visibility.• Differentiate a company or brand.• Showcase specific goods or

services.• Develop a closer relationship with

current and prospective customers.

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Event Marketing and SponsorshipsUnited States

Source: “Event Marketing/Sponsorships,” Public Relations Society of America

Sports Marketing$3.84 billion

65%Entertainment Tours$650 million (11%)

Festivals & Fairs$558 million (9%)

Causes$535 million (9%)

Arts & Cultural Events$354 million (6%)

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Event Marketing and SponsorshipsCanada

Source: “How Big is the Canadian Sponsorship Pie?” The Sponsorship Report (Http://www.sponsorship.ca/p-issues-howbig.html)

Sports (45%)

Cultural Events (20%)

Education (10%)

Health (10%)

Humanitarian (10%)Environment (2.5%)

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What is the likelihood that a fan will buy a sponsor’s product?

• NASCAR 72%• Tennis 52%• Golf 47%• NBA 38%• NFL 36%

Source: “Event Marketing/Sponsorships,” Public Relations Society of America (Http://www.prsa.org/ppc/68022.html)

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INTEGRATED LEARNING EXPERIENCESTOP

• Performance Research• Http://www.performanceresearch.com

• IEG Sponsorship• Http://www.sponsorship.com

• BDS Sponsorships, Ltd. (Europe)• Http://www.sponsorship.co.uk

Firms specializing in helping businesses maximize their sponsorship investments.

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Sponsoring Individuals

• Name recognition 68%• Current popularity 56%• Overall image 53%• Character 51%

Source: “Event Marketing/Sponsorships,” Public Relations Society of America

What attributes do sponsors look for in endorsing an individual such as Tiger Woods?

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To Maximize Event Marketing

• Determine objective.• Match event with customers,

vendors and employees.• Cross-promote event.• Include company in all event

advertising and brochures.• Track results.• Evaluate the investment following

the event.

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Event Marketing