Copyright Copyright © 2001, Prentice Hall, Inc.© 2001, Prentice Hall, Inc.

CHAPTER 19CHAPTER 19

2Copyright ©2001 Prentice Hall, Inc.

Why has dealing with consumers and Why has dealing with consumers and investors become so important for public investors become so important for public relations?relations?

Consumers & InvestorsConsumers & InvestorsFOR STARTERS:FOR STARTERS:

Advertising

Advertising

““Noise”Noise”

CompetitionCompetition

SavvySavvyConsumers

ConsumersKnowledgeableKnowledgeable

InvestorsInvestors

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Tyco Toys, Inc.Tyco Toys, Inc.

Toy Fair BreakfastToy Fair Breakfast Media Day at Sesame Place Media Day at Sesame Place

Theme ParkTheme Park Elmo sent to Rosie O’DonnellElmo sent to Rosie O’Donnell 15,000 media mentions 15,000 media mentions

Source of Elmo character: http://www.geocities.com/~chicky-ma-ma/elmo.htm [accessed 6/16/2000]Source of Elmo character: http://www.geocities.com/~chicky-ma-ma/elmo.htm [accessed 6/16/2000]

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Consumer Movement HistoryConsumer Movement HistoryLet’s DiscussLet’s Discuss

1872 – Criminal Fraud Statute

1900s – Muckrakers The Jungle Food and Drug Act Food, Drug, and Cosmetic Act

1887 – Interstate Commerce Commission

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JFK’s Consumer Bill of RightsJFK’s Consumer Bill of Rights

Right to ChooseRight to Choose

Right toSafety

Right toSafety Right to Be

InformedRight to BeInformed

Right to Be HeardRight to Be Heard

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What does each of the following federal What does each of the following federal agencies do?agencies do?

Federal Consumer AgenciesFederal Consumer AgenciesQUICK QUIZQUICK QUIZ

Federal TradeCommission

Federal TradeCommission

Regulates television and radio advertisingRegulates television and radio advertising Covers areas not included in national Covers areas not included in national

advertising (general litigation division)advertising (general litigation division) Enforces consumer credit program (fair credit Enforces consumer credit program (fair credit

reporting, truth in packaging)reporting, truth in packaging)

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What does each of the following federal What does each of the following federal agencies do?agencies do?

Federal Consumer AgenciesFederal Consumer AgenciesQUICK QUIZQUICK QUIZ

Justice Department

Justice Department

Enforces consumer protection measures such Enforces consumer protection measures such as the Truth in Lending Act and Product as the Truth in Lending Act and Product Safety ActSafety Act

Runs anti-trust division (Microsoft suit)Runs anti-trust division (Microsoft suit)

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What does each of the following federal What does each of the following federal agencies do?agencies do?

Federal Consumer AgenciesFederal Consumer AgenciesQUICK QUIZQUICK QUIZ

Food & Drug AdministrationFood & Drug

Administration

Protects consumers from hazardous items: Protects consumers from hazardous items: foods, drugs, cosmetics, therapeutic and foods, drugs, cosmetics, therapeutic and radiological devices, food additives, serums, radiological devices, food additives, serums, and vaccinesand vaccines

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What does each of the following federal What does each of the following federal agencies do?agencies do?

Federal Consumer AgenciesFederal Consumer AgenciesQUICK QUIZQUICK QUIZ

Office of Consumer

Affairs

Office of Consumer

Affairs

Publishes literature informing the public of recent Publishes literature informing the public of recent developments in consumer affairsdevelopments in consumer affairs

Oversees product safety (seatbelts, strollers, etc.)Oversees product safety (seatbelts, strollers, etc.)

Consumer Product Safety Commission

Consumer Product Safety Commission

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Name some consumer watchdog Name some consumer watchdog vehicles or groups.vehicles or groups.

QUICK QUIZQUICK QUIZ

Consumers Union Consumers Union (publishes (publishes Consumer ReportsConsumer Reports))

The Consumer Federation of The Consumer Federation of AmericaAmerica

The InternetThe Internet

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Business’s Consumer RelationsBusiness’s Consumer RelationsDivision DutiesDivision Duties

Handling ComplaintsHandling Complaints

Developing Consumer Programs

Developing Consumer Programs

Evaluating Service Approaches

Evaluating Service Approaches

Developing Guidelines to Evaluate Products &

Services

Developing Guidelines to Evaluate Products &

Services

Developing Field-Training Programs

Developing Field-Training Programs

Evaluating Company Effectiveness in Showing Concern for Customers

Evaluating Company Effectiveness in Showing Concern for Customers

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Every customer has the following rights:Every customer has the following rights:

Chrysler Corporation’sChrysler Corporation’s“Customer’s Bill of Rights”“Customer’s Bill of Rights”

Grievance Opportunities

Satisfaction

Quality Long-term Protection Service with

a Smile

Safe Vehicles

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Consumerist ObjectivesConsumerist ObjectivesLet’s DiscussLet’s Discuss

Explain how each would benefit a company:Explain how each would benefit a company:

Marketing NewItems / ServicesMarketing NewItems / Services

Keeping Old Customers

Keeping Old Customers

Attracting New Customers

Attracting New Customers

Reducing CostsReducing Costs Handling ComplaintsHandling Complaints

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Investigate complaints Investigate complaints made against the firmmade against the firm

Provide a central Provide a central location for customers location for customers who seek redresswho seek redress

Monitor difficulties Monitor difficulties customers have with customers have with productsproducts

Influence organizations to improve serviceInfluence organizations to improve service

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Timely and valuable Timely and valuable communications that communications that gain and maintain gain and maintain shareholder supportshareholder support

DEFINE:DEFINE:

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What is a company’s What is a company’s

CURRENCYCURRENCY??

Its Its STOCK PRICESTOCK PRICE

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Any fact that would be Any fact that would be important to an important to an investor making an investor making an investment decisioninvestment decision

DEFINE:DEFINE:

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Examples of Examples of Material InformationMaterial Information:: Proposed mergers or acquisitionsProposed mergers or acquisitions Changed dividend policyChanged dividend policy Determination of earningsDetermination of earnings Acquisition or loss of significant business Acquisition or loss of significant business

contractcontract Major management changesMajor management changes Significant change in capital investment Significant change in capital investment

plansplans

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Examples of Examples of Material InformationMaterial Information:: Purchase or sale of a major assetPurchase or sale of a major asset

Incurring a major debt or selling a Incurring a major debt or selling a significant amount of equity annuitiessignificant amount of equity annuities

Pending significant legislationPending significant legislation

A major discovery or innovationA major discovery or innovation

Marketing a new productMarketing a new product

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OVERVIEW:OVERVIEW:

Company descriptionCompany description

Letter to shareholdersLetter to shareholders

Financial reviewFinancial review

Explanation/analysisExplanation/analysis

Management/marketing discussionsManagement/marketing discussions

GraphicsGraphics

Annual Reports:Annual Reports:

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OVERVIEW:OVERVIEW:

Comparison of current Comparison of current performance with performance with previous year’s quarter previous year’s quarter performanceperformance

Quarterly Reports:Quarterly Reports:

In-person meetingsIn-person meetings

Q&A sessionsQ&A sessions

SpeechesSpeeches

Stockholder votingStockholder voting

Annual Meetings:Annual Meetings:

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OVERVIEW:OVERVIEW:

Follow-up quarterly Follow-up quarterly reports to answer reports to answer questionsquestions

Conference Calls:Conference Calls:

In-person meetingsIn-person meetings Q&A sessionsQ&A sessions SpeechesSpeeches Stockholder votingStockholder voting

Media Contact Media Contact & Monitoring:& Monitoring:

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OVERVIEW:OVERVIEW:

Homepage / Web siteHomepage / Web site

SEC documents onlineSEC documents online

FAQsFAQs

Links to financial dataLinks to financial data

Internet Investor Relations:Internet Investor Relations: