Public Relations and Its Relationship to Business Objectives (VCE SSCE Business Management): Revision Notes

Public Relations and Its Relationship to Business Objectives

What is public relations?

Public relations (PR) is a vital function for any business. It involves building and maintaining a positive image with various groups that the business needs to connect with. Businesses that develop effective PR strategies often see increased public exposure at relatively low cost.

Public relations can be defined in several ways:

• The practice of promoting goodwill among the public to present a favourable image
• A focus on the image that the business portrays to the public
• A deliberate, planned and sustained effort to establish relationships between a business and its public (Chartered Institute of Public Relations)

How public relations differs from marketing

While PR shares some communication techniques with marketing, it serves a different purpose. Both aim to increase the business's reputation and recognition, but PR is usually not product-specific. Instead, PR is a long-term investment in building the company's overall reputation and goodwill. It may also include strategies prepared in advance to manage potential crises.

Goals of public relations

Effective public relations strategies typically aim to achieve five main objectives:

1. Developing relationships with the community – Building connections with local communities and stakeholders
2. Providing information to the public – Keeping stakeholders informed about business activities and developments
3. Managing issues and crises – Handling problems and negative situations effectively
4. Gaining free publicity – Securing media coverage without paying for advertising
5. Promoting the business – Enhancing the business's profile and reputation

Linking public relations to business objectives

For any business to succeed, it needs clear strategic objectives. These typically include goals such as increased market share, growth, and diversification of products and customer base. A well-planned PR strategy supports these objectives by increasing public recognition and building positive perceptions of the business and its brand.

How PR campaigns contribute to business objectives

Well-planned public relations campaigns can help achieve business objectives through:

• Increasing the customer base – Attracting new customers through positive reputation
• Increasing demand – Building interest in products or services
• Gaining a competitive edge – Differentiating the business from competitors
• Enhancing credibility – Building trust and authority in the market
• Creating goodwill – Fostering positive feelings within the community

To be successful, businesses must clearly understand who their 'public' is. The saying "image is everything" holds true – a carefully created and maintained image is crucial for success. PR aims to present positive information and reduce negative perceptions through various strategies that align with the business's overall goals.

Setting public relations objectives

When developing PR objectives, businesses should ensure they meet six key criteria:

1. Clear – Easy to understand and unambiguous
2. Realistic – Achievable with available resources
3. Forward-looking – Focused on future outcomes
4. Actionable – Can be implemented through specific steps
5. Communicated – Shared with relevant stakeholders
6. Agreed – Accepted by key decision-makers

Understanding 'the public'

The 'public' varies from one business to another. A large retail store will have a different public compared to a small cabinet-making business. Therefore, PR strategies must be targeted at the correct groups using the most appropriate methods, aligned with business objectives.

Businesses need to maintain positive relationships with their public, as changes in laws or regulations can affect these groups and impact the business's operations.

Internal and external stakeholders

The public can be divided into two categories:

Internal public:

• Employees
• Shareholders
• Management

External public:

• Local community
• Suppliers
• Competitors
• Customers
• All tiers of government (federal, state, local)

Benefits of public relations

PR offers several advantages over traditional advertising:

• Cost effectiveness – Often cheaper than paid advertising campaigns
• Longevity – PR coverage typically has a longer-lasting impact
• Greater audience reach – Can reach wider audiences through media coverage
• Credibility – Editorial coverage is often seen as more trustworthy than advertising

Types of public relations

Businesses need to maintain several types of PR to build and maintain their reputation effectively:

Media relations

Media relations involves building relationships with journalists and media professionals to spread information about the business's policies, plans, and practices. This includes:

• Holding media conferences
• Writing press/media releases to generate positive coverage
• Reaching target audiences through media channels

Investor relations

This focuses on communication between corporate management and investors, including:

• Government authorities
• Shareholders
• The financial community

The main focus is ensuring investors receive accurate accounts of financial affairs through proper disclosure. Investor relations must be integrated with legal and accounting departments and comply with regulatory, financial, and legal requirements.

Government relations

This branch of PR focuses on how businesses communicate with various government branches, dealing with:

• Regulatory issues
• Legislative matters
• Engagement with policymakers
• Lobbying efforts

Community relations

Building positive local community relationships is essential for any business. Community relations involves:

• Establishing mutually beneficial relationships with local communities
• Demonstrating civic responsibility
• Appearing socially conscious and credible

When businesses actively engage with their communities and accept civic responsibilities, they enhance their reputation and credibility.

Customer relations

Customer relations refers to how a business manages interactions with existing, past, and potential customers. The focus is on:

• Improving the customer experience
• Providing answers to short-term issues
• Creating long-term solutions for major problems
• Boosting customer acquisition, satisfaction, and loyalty

As part of a wider PR strategy, effective customer relations can significantly improve business performance.

Marketing communications

Marketing communications encompasses various methods and tools used to communicate with customers, including:

• Public relations activities
• Advertising
• Branding and packaging
• Direct marketing
• Sales presentations
• Online promotions

The focus is on positioning and building a brand to create and sustain demand for the company's products.

Crisis management and public relations

Businesses must have PR strategies in place to handle both planned and unplanned crisis situations. Ideally, businesses should never face unexpected crises because they should have:

• Policies to prevent crises
• Action plans ready to implement if problems arise
• Clear communication protocols
• Designated spokespersons

Exam technique

When answering questions about public relations:

For 'explain' questions:

• Define PR clearly
• Show the connection to business objectives
• Use specific examples where possible

For 'analyse' questions:

• Examine how PR strategies contribute to specific objectives
• Consider costs versus benefits
• Evaluate effectiveness for different types of businesses

For 'evaluate' questions:

• Assess the overall effectiveness of PR strategies
• Consider both advantages and limitations
• Make judgements based on evidence
• Link to business context and objectives