Public Relations (PR) – The management of how others see and feel about a person, brand, or company
The term public relations is straightforward to understand if the meaning of the words is made clear.
Public = The general public (consumers, stakeholders)
Relations = Relationships between two groups or entities (in this context, businesses)
Public Relations = Relationships between businesses and the general public
It is important for companies to build solid, beneficial relationships with their customers and target market. This not only helps to keep your customers loyal but also attracts new ones. Many companies outsource their public relations to a specialised company that focuses on improving the image of brands and companies in the eyes of the public. For many large publicly traded companies, public relations is essential, as any event that damages their image can affect shareholder confidence leading to a fall in share prices and therefore the value of the company. Public relations is different from marketing due to the fact that it focuses on the overall image and reputation of a company or brand. Marketing is focused on driving sales by promoting specific products.
A very notable example of a public relations disaster that had very negative effects on a company is the following:
Gerald Ratner built an extremely successful chain of jewellers until he made a speech at a conference which became a legendary public relations disaster for his company, which nearly became worthless. Here’s part of the speech:
“We also do cut-glass sherry decanters complete with six glasses on a silver-plated tray that your butler can serve you drinks on, all for £4.95. People say, “How can you sell this for such a low price?” I say because it’s total crap.”
A very positive example of public relations was Maxwell House which sells coffee in supermarkets. They drew people’s attention to the importance of home and family. They built 100 houses for 100 people for 100 days. They donated $2 million and got many volunteers to help build them. Maxwell House coffee sales went up in America by 2.4%.
How people perceive the company is very important and public relationships should be managed.