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Basic Principal of Corporate PR
y Corporate public relations seeks to project the image
and identity of the organisation. y Based the facts and figures as well as on the subjective impressions and feelings, image itself is a duct of public mind. y In order to project the identity of the organisation, the PR needs to know both - facts that people know as well as the impressions that they carry about the organisation. y Therefore Corporate PR manages the reputation of the organisation.
Few essential guidelines of corporate PR
Corporate public relations is a shared responsibility and therefore must be truthful and believable. corporate public relations programme is an investment in the Image building of the organisation.
2) As a 'caring entity' and a 'good citizen', PR believes that
3) PR is never open and responsive to public concern. 4) PR recognise that one's own view is subjective and
never influences the organisation to take corporate convictions for reality.
Finally PR maintains excellent communication relationships both at the corporate and at the unit levels with the internal as well as the external publics. Corporate Communication is a faith and a commitment which cannot be compromised under any circumstances. Corporate PR always believes in the institution of a long range image and identity and therefore never subscribes to any crash communication plan.5) In terms of corporate communication PR thinks of sharing with the community the values which it upholds and for which it wants to be known. 6) 7) 8) .
. 'customer. y This is also applicable to business.CORPORA TE IMAGE: y According to Philip Kotler." Corporate Image is the set of beliefs ideas and impression. "Image is the set of beliefs. the company.e. a person i. shareholder and employee holds regarding and object i.e. ideas and impression. a person holds regarding an object.
The attitude and actions of the people will be as per the Company's Image in their minds. .y There are different Images which people may have formed about a particular Company. Favourable Image gives positive response whereas unfavourable Image gives negative response. Such Images may be favourable or unfavourable. These may be a ³good company³ or ³Consumer friendly company" etc.
Factor affecting Corporate Image or Elements of Corporate Image Building. Sales policies and sales promotion techniques used. . Discounts. credit facilities and after sales services offered. Press relations of the company including Press Publicity. 2) Attractiveness and safety of the product. 1) Quality and Pricing of the products. Advertising and Ad Campaigns of the company and the logo used. 3) Dealer relationship and the attitude of dealers 4) 5) 6) 7) towards the company.
Product Modification and Introduction of new products through R & D activities.8) Discharging of Social responsibilities. 12) Social audit programme of the company. rural development and ecology balance. . Consumer protection and Welfare. 11) Contribution of the company in regards to development of sports. 9) Consumer service. 10) Product line.
.13) Attitude towards female and handicapped employees. 14) Financial position of the company management practice and Socio-economic objective of the company.
2) To introduce business growth through expansion and diversification. . 5) To Secure Co-operation from different social groups for business growth and prosperity.Positive Image building is needed for the following purpose 1) To promote sales and thereby earn more profit. 4) To effectively face adverse business environment. 3) To develop brand loyalty among consumers.
. 7) To Secure Public support and sympathy when the company is facing serious difficulties regarding production and Marketing activities or when company is facing serious financial crisis.6) To Secure Support from Investors for raising capital for business growth.
5) Increase in Sales and Profit.Benefits of Positive/Good/Favourable Image 1) Recognition as Consumer-friendly enterprise. 3) Social recognition. 6) Image building has publicity and promotional value . 2) Social Support and Co-operation. 4) Prestigious Position.
satisfaction and welfare is MUST. Introduce pollution control measures. Education and Cultural activities. Important Measures for Positive Image Building 1) For Positive Image Building. Support Sports. Attention should be given to female and handicapped manpower. Fair treatment should be given to all social groups and be made an integral part of the philosophy of the company. due attention should 2) 3) 4) 5) be given to consumer protection.. .
6) Maintain high level of efficiency and productivity. 7) Financial support should be given at the time of natural calamities. . 8) Maintain Ethical Climate in the organisation and openess in the policies and operations of the company.
Corporate communication is the process that translates an identity into an image. . It is the reception of the message which goes to create the intended image. y In brief corporate image refers to the image that a company has acquired with the public whereas corporate identity refers to the image a company strives to achieve. in order to build a reputation with its publics.CORPORA TE IDENTITY y An organisation transmits messages to the publics on a sustained basis.
y Here. the corporate body must communicate short-term goals. The mission is the glue that holds the company together. If the objectives and mission of the organisation have to be accomplished. This mission should be the framework for business and all its activities. long range objectives and even the total mission of the organisation. .y In this context every company needs a mission. the PR and its communication strategies come into focus.
. It may lead to a breakdown in coordination and elements in an organisation.y Inadequate communications results in an ambiguous corporate image.
forms.including annual reports and house journals. Company publications .well maintained office production units. Company packaging -labels and tags. Company assets . . cards etc. Advertising and promotion.divisions and subsidiaries. The logo factor . cars and outlets.PR ROLE IN IMAGE AND IDENTITY 1) 2) 3) 4) 5) 6) 7) 8) Name of the organisation . Company stationery .symbols in use. Company signs .at public places offices and production units. letterheads.
y When crisis strikes. . PR in its proactive role should try to carry conviction with the management that safety and welfare of the employees and community is the responsibility of the management.THE PR ROLE IN ACCIDENTS AND TRAGEDIES y Serious tragedies such as the Bhopal Gas tragedy have occurred as a result of managements failure to adhere to the norms of safety.
. y Companies use their logo in their advertisement for easy identification. trademark or design". y There are many logos which we observe in our daily life.THE LOGO y Logo means a single piece of type comprising a word or words or a name. y Larsen and Toubro company has a simple logo in the form of LT. address.
y Therefore. y It is a visual identity which translates into a corporate identity.THE IMPORTANCE OF LOGO y The logo of an organisation is the essence of its personality and its identity to the world. y The organisations pour time and money to develop a powerful logo as a logo evinces visual interest to such an extent that it is able to grab attention at just a single glance . the task of creating a logo requires understanding of long-term perspectives and a multitude of views.
the interlinking of logos and brands is something every marketer strives for.LOGO AND CONSUMER y Whether it is in print or' on electronic media. each passing ad or message fight hard for a share in the consumer's mind and instant attention. y A powerful logo will definitely have a greater impact. When it comes to catching the consumer's eye. .
y They matter more to the organisation although no PR and management can ignore any public. y These are special public who are quite sizeable in number and form dominant groups in the domain of financial public relations. y It is essential for the existence of the organisation itself to have effective communication with all of them. .Financial PR y Communicating with the financial public is known as financial public relations.
trade journals and other publications who create interest in economics and finance. 5) The financial and economic press in particular which includes number of newspapers. stock brokers and a variety of key players individual or institution in the global money market. customers. .Who are financial public 1) The registered shareholders. 4) The audience in the market scenario comprising of politicians. 3) The direct financial community consisting of banks and financial institutions. employees and the general public on specific occasion. 2) The investing community including potential shareholders.
backed by good performance it can give a boost to the share price. creating investors awareness. If the campaign is. opportunities to deliver correct messages to those involved in the evaluation of the financial performance of an organisation.ROLE OF FINANCIAL PR 1) One of the most important considerations for any organisation is to look after the interest of its shareholders. The PR has to assist the company in achieving the corporate objectives. 2) Effective communication plays and important role in 3) PR communication in an effective form can provide the .
the interest of business as a whole. PR must be well versed with business finance.4) In the ever growing and fast changing financial services. Due to financial illiteracy many PR persons has been ruined. PR has to adopt the management of change in -the context of the challenges and opportunities and different PR tools and methods. 4) In the professional interest of PR and also in. .
y Any PR person involved in financial communication should possess complete knowledge of the accountancy concept and language. 3) Gross profit and net profit. 2) Return on capital employed and return on shareholders capital. . Some of the important terms are: 1) Financial statement and its structure.
5) Cost concepts. 11) Operating concepts.4) Taxation issues. debt and equity. 8) Market capitalisation. 7) Investment and Dividend. 10) Plans and budgets. 9) Profitability index. . 6) Working capital and liquidity.
It is like withdrawal of essential inputs towards development of the organisation. The following are a few examples of mutual co-operation and learning at both the levels. a) b) .FINANCE INTERFACE y PR and finance have a lot in common and each one can learn quite a few lessons from eacr other. 1) The finance department has to know and understand about PR as an essential input of the organisation. In the first instance PR expenditure is not a cost but an investment and it should be given priority. Even during financial crisis cutting PR costs is not efficient and practical cost management. PR is indeed not something free.PUBLIC RELATION .
2. It is necessary to draw up a budget in consultation with the finance department though it may not cost a fortune. PR people have to learn atleast the basic rules of finance and managerial control systems if they have to be seen as responsible professionals. 3. y In short finance and PR should have the same goals and same purpose .
. y Key element in any financial PR Programme will be aimed at the financial community.PR TOOLS IN FINANCIAL COMMUNICATION y PR employs a variety of tools and methods to promote business development for the purpose of financial communication. economic and political environment. but at the same time the business and its communication must gain the acceptance of the government and the general public in the present social.
2) Media Relations.y The following are the PR tools in financial communication: 1) The Press. 5) Annual Report and 6) Annual General Meeting. . 4) Press Conference. 3) Press Release.
y The press play a very important role as a means of communication by the companies to various categories of investors and financial public. y The press includes local. regional and national publications as well as financial and economic press. marketing publications and even publications of general interest. y In addition to this there are a number of trade journals. . y The press activity helps the shareholders and potential investors to maintain a record and understand the performance of the company on the financial front.
3) The company spokesperson should have thorough knowledge of finance.How to tackle press No PR should ever run short of time as far as press relations is concerned. 2) It is the duty of the PR to ensure that spokesperson from the company even at the highest level is approachable and accessible. technical and other economic aspects. 1) . 4) Provide the right kind of information to the journalist whether financial or general. There cannot be a compromise in this. This will enable them to fulfill their assigned roles which is a key part of any communication programme.
.MEDIA RESEARCH y An essential requirement for the success of any business enterprise is an effective media relations programme. y PR has to make a judicious selection of journals newspapers and electronic media. Billboards and hoardings also form a part of it for gaining the support of the investors and also for boosting the image of the company.
Things to be kept in mind while selecting media y Reach: How far does the projected media information provide a picture of the real situation? y Attention: Innovative steps through electronic media are restricted but they are instant. But in press the possibilities are endless. each with its own advantage. . might carry a lasting impression on the mind but press advertisement have a better longevity. Hence both must coexist. y Durability: T.V.
can flash the bare essentials which are just not enough whereas press can easily pack in much more detailed information which the financial readers constantly need .V. y Information: T.y Audience: Electronic media has the attraction of bringing newer breed of people to in fold whereas press can attract serious readers on a sustained basis.
y The media persons are well aware of this and have to serve their audience by collecting and disseminating news and views in a sustained manner. shareholders and a vast group of financial public is always on a look out for factual and accurate news and so financial communication cannot just be a two line message. y A detailed financial releases are a useful tool of communication with both press and public relations professionals for this purpose.PRESS RELEASE y One of the traditional method of handing out information is press releases. . y It is a very useful tool with the PR professionals: The investors.
PRESS CONFERENCE y A traditional method of giving information by direct use of face-to-face communication technique are press conferences. . y Such methods have been found to be distinctly useful when an important event or development is to be announced or when the annual accounts and reports are to be published.
2) The very purpose of a press conference is aimed at projecting the corporate entity and its financial objectives to key the target audiences.y A few points are to be considered while organising press conferences specially for financial public relations. Therefore preparing the corporate image for launching a financial campaign is a direct PR task. Since such press meetings will evoke intelligent questions and there must not be any scope for faltering reply. . 1) Adequate advance preparation and presence of the highest management group is the essence of success for a well organised press conference.
3) In many cases in order to avoid controversies a lot of temporaries prefer to throw the conference venue open to as many media persons as possible. 5) The comparative merits and limitations of a press conference must be carefully assessed or otherwise be content with mailing a financial press release which can also be newsworthy. . 4) It is very important that the press conference be addressed by the senior most executive of the company No media person would like to spend their valuable time with someone who is not a legitimate newsmaker.
y It is mandatory on the part of the management to present audited accounts of the company before the shareholders at the annual general meeting.ANNUAL REPORT y In order to introduce the company to the financial public as well as to financial collaborators an annual report is the most essential and first-hand communication. .
2) Report of the Board of Directors. .y The annual reports consists of the following: 1) Chairman's speech. . 4) Profit and Loss Account 5) Auditor's Report. 3) Balance Sheet.
to admit difficulties and explain the steps to overcome them. The PR role in the preparation and production of the annual report could be as follows: 1) The company secretary together with the finance wing of the company prepares the draft annual report. . 3) The annual report can be used effectively as a tool of PR communication.y Annual report is an essential input of financial public relations. 2) PR plays a constructive role by emphasizing the need to be free and frank.
5) A complete circulation list for annual report dispatch is to be prepared by PR department. This a golden opportunity to be in contact with the financial press and concerned financial public. It should be published mainly in those which specializes in financial matters.4) One way to win over mass attention is to publish the chairman's statement in selected journals and newspapers. .
y Though PR is not directly involved still he can perform well from the background .ANNUAL GENERAL MEETING y AGM is an important PR occasion when important financial statements including audited accounts are put up before the shareholders. The chief executive gives details of the company's performance during the last one year and explains the company's plans and strategies for future development.
Financial PR covers much more than just dealing with a few financial journalists. 3) The PR can project the organisation to the outside world as a dynamic entity alive towards the welfare of the community at large by making the chairman's speech reach a much wide audience.y In relation to AGM the tasks of PR with adequate management support are as under 1) As far as financial public relations is concerned PR activity must not be restricted to media relations alone. . 4) Presentations is another effective way of attracting shareholders attraction to the company's achievements. 2) PR can demonstrate its effective role in many other finance related activities including AGM.
5) In order to make his role noticeable in AGM matters. He has to develop keen business acumen and be a part of the business group which handles investors relations programmes.TV .Radio interviews. . 6) A well-planned PR programme will cover media relations. press conferences and follow-up or post meeting exercises. news releases. Press . the PR must have good access to the Chief Executive and senior management persons.
y Among all the investors the shareholders hold the most important position in this complex market scenario.COMMUNICATlNG WITH THE INVESTORS y The investors have multiplied in numbers individually as well as institutionally with the large growth of money market. . y Other than individual investors or shareholders there are foreign collaborators and national and international financial institutions.
y A share is an instrument representing the true worth of the company. y The judgement of the public in respect of a company will depend on the flow of accurate information about the developments and financial performance of the company. y The value of share gets affected by the market forces of demand and supply as well as by the goodwill enjoyed by the company. .
relations are in a much better shape both in good as well as bad times. .y It has been seen that those companies who are in constant touch with the shareholders and maintain good .V. y In addition to this the shareholders will be influenced by the financial reports and comments of the press. and radio. y Hence communication with the shareholders needs to be an on growing process in order to gain their everlasting loyalty and credibility. T.
. y This calls for special skills and aptitude.y The PR professionals can play an active role in creating investors awareness. y Today management believe that relations with the entire capital market should be handled in a professional way and on a continuing basis. Here comes the important role of PR in financial relations for any business organisation.
.ELECTRONIC MEDIA y Whenever there are chances to appear on television or in radio talks. or a success story. the opportunity should be used to the best of the advantage. y The PR and the top management have to be well prepared though the occasion may be a general one like take-over bid. y They have to make an impressive and realistic projection about the company's actual worth into the world of finance.
y Today financial advertising is a specialist field more than
just Jargons involved in selling products like shares and debentures. y In the by gone days only brokers and institutional buyers were the target groups but as on date there are millions of individuals making personal investment decisions with little or no influence of the brokers. y The Indian middle class having a little more fund has found a way to play its additional money and time in the burgeoning money market. y India is now having one of the world's largest stock markets with a roster of more than 10 million stockholders.
y Today financial advertising is indeed a big business. y In any financial advertising plan the importance of
PR and media has increased in manifold. y Now the market is fiercely competitive and also become unreliable, hence investment in property and valuables are an easy alternatives. y Individual investors have become overcautious and they display extreme heterogeneity. y Some of them appreciate qualitative information while some of them have an eye for serious financial data.
y A conservative investor would normally prefer a debt
instrument like a bond or a debenture with assured returns but a young speculative investor would be ready to take risk and would gladly hazard his money on a dazzling issue.
y A drastically over-subscribed issue could burden the company with high cost in refunding the extra money. y Advertising and PR objectives are more finely cut.y The roleof PR in overall financial communication will be contingent upon its own capabilities and also on the management appreciation of its functional efficiency. . and at the same time an entirely new target audiences have to be chalked out for each issue.
At the same time it is true that no one is being stopped from separate corporate image campaigns.SEBI GUIDELINES y The Securities Exchange Board of India (SEBI) has put y y y y down certain restrictions on the issue ads for shares and debentures and mutual funds. No models. no fluff. must not influence the investor. In the interest of the investor protection. . SEBI feels that financial advertising. video display etc. no wacky visuals. The advertising people term it as a sudden attack on "creative" element of advertising. no smart headlines or no unsubstantiated claims.
y Hence.y SEBI has separated the issue ads and the corporate ads. This has brought bifocal advertising into center point of financial advertising. one campaigns paints the larger image of the company and another provides well manipulated hard-core financial data. . y As a result of this many companies prefer to award corporate accounts to mainline advertising agencies and the issue accounts to specialist financial agencies.
In the Indian context PR has to be fully conversant with the guidelines issued by Advertising Standards Council of India. 3) PR has to review results against financial advertising goals on a regular basis and initiate corrective actions next time. . 2) Use of corporate or brand personalities in issue advertising is unacceptable to SEB!.PR FUNCTION IN FINANCIAL ADVERTISING 1) PR function and PR persons must adhere to decent and truthful norms while handling pre-issue corporate campaigns.
Media planning is an essential part of overall PR planning. media relations and media specialisation are specific and important areas which require more imagination on the part of PR persons handling financial communication. Media research. He has to evaluate and recommend the advertising policy of the company to the top level management. PR person has to become market-minded to tackle financial advertising. Further he has to decide whether the advertising campaign will be best handled through an' advertising agency. 5) 6) .4) The role of PR as a media planner particularly in the field of financial advertising is specialised and very important in the entire advertising process.
So in financial advertising he has to produce the .7) Careful evaluation of the available facts would go a long way in arriving at a right decision. . PR can play its role as an influencing factor in investment decisions.right advertisement campaign at the right time for the right segment at the right cost rather than at the lowest possible cost. People buy financial products when they feel confident and find the offer trustworthy. 8) Investors are not all experts in money management.
friendly or unfriendly. PR has to define and play its role.SPECIAL SITUATIONS y A few special events require specific attention and appropriate involvement of PR persons in defining PR objectives in relation to financial public relations. Some of the key issues of the campaign are 1) Acquisitions: It may be agreed or disputed. implementing corporate and financial public relations programme. . monitoring share price movements and organising new shareholder profile. PR will initiate public relations aspects of launching. _ 2) Flotation: It is a means by which a company comes into share market.
environment and human interest areas. sports.y Privatisation: Through the flotation of shares on the stock market transfer of public-sector owned business to private sector. y Sponsorship: Community responsibility through support for arts. .
5) Investors relations and 6) Financial public relations . 3) (Community relations. 2) Employee relations.CORPORATE PR y While planning for corporate goals and strategies in special situations PR must give adequate importance and attention to 1) Customer relations. 4) Government relations.
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