In a highly competitive global business environment, it is no longer enough to rely on traditional methods of manufacturing and marketing products. This is the Information Age where information regarding a particular company, whether true or not, can easily drive up or drive down sales. This means that the business war is no longer about the quality of the product and the ability of the sales department to sell it to a target market; it is also about the control of the flow of information that is coming from the company and from the customers (Sherwin & Avia, 2000). The best way to deal with these radical changes is to create a website that will become a portal to the outside world – able to increase sales as well as control the impact of information with regards to the company.
Our company is a furniture-making enterprise. It has been a global business for a decade now, but since the past two years, sales have been lethargic. The current global financial crisis is not helping improve the situation, but the main reason for weak sales is the failure of our website to connect with consumers. Moreover, the strategy of the company to build factories in China, as well as the outsourcing of raw materials from developing countries, was criticized as adding to the environmental and human rights problems in the region. These reports and criticisms that are rampant on the Internet are without basis.
But we could not react to these insinuations because we do not have the capacity to deal with forums and various message boards used by customers and critics alike to voice out their concerns as well as their biased opinions. This has prompted many to conclude that:
- Technology is just expanding too fast, and we cannot keep up;
- Too much information available, and there is no way to process it completely; and
- Super-connectivity is creating something never before seen or heard (Small, 2000).
Years later, the same analysis can be said of current technologies. What has exacerbated the problem from the point of view of public relations is the increasing capability of consumers and the general public to access and upload information to the Internet. In order to establish order in the midst of chaos, this company must upgrade its website. More importantly, the solution to all these problems is the creation of a website that has a dual function.
It will be a website where one can do online shopping, and at the same time, it must also be a place where customers, critics, and e-journalists can go to in order to get information as well as a voice out their ideas regarding the company (Small, 2000). In other words, the website is not only focused on generating revenue for the company; it also serves to function as a Public Relations tool that can help the company weather a public relations scandal as well as promote goodwill to customers and other stakeholders.
Website
There is no need to elaborate upon the importance of a website. A global company like ours needs a highly functional website as badly as a person will need food and water to survive. In the Information Age, companies no longer rely on showrooms, partnerships with business establishments, telemarketers, and door-to-door salesmen to sell products. This is because the most advanced and most cost-efficient way to do business is through online shopping (Small, 2000). Online shopping is easy to appreciate. A customer will save time, money, and effort by simply sitting back and, through a few clicks of the computer mouse, will be able to purchase a product without leaving the comfort of home.
TV shopping provided the seed for this idea, but it was Amazon.com and eBay that revolutionized online shopping. These two giant companies proved to the world that online shopping could be efficient and, most of all, safe. For busy housewives who would rather spend time with their families, online shopping is an irresistible means of acquiring their household needs.
But in order for our company to venture into online shopping, the site must be upgraded, and considerable investment is needed to handle increased traffic as well as to ensure security in online transactions. Aside from that, this company must ensure that the content of the website is updated in order to portray a more positive image to stakeholders (McGovern & Norton, 2002). This is so important, especially for investors who may judge the company through its website.
This company must hire an IT specialist to help guide in creating a website that is easy to navigate. The goal is not to confuse the customer but potential lead buyers to complete an online purchase. The transaction required to complete online shopping must not be complicated and yet able to ensure smooth communication so that both parties will get everything that they want from the transaction.
In the case of the customer, the company must deliver the correct product on time and make customers feel that they are getting more than their money’s worth. On the side of the company, the website must be able to gather all necessary information, e.g., credit card details, delivery address, as well as other information that will lead to customized service. The customer may require a red chair to go with a yellow table – these minor details must not be overlooked as this can contribute to the long-term success of the company.
Models
The best model that this company should follow is that of IKEA, a Swedish-based furniture-making enterprise. IKEA started from humble beginnings in an obscure part of Sweden, and due to the guidance of its visionary leader, the company was able to achieve international success. IKEA has hundreds of stores in 36 countries, including Denmark, Germany, Spain, France, Finland, Canada, the U.S., Australia, and the UK (IKEA, 2009).
But the more impressive fact is that IKEA is present in countries like China, Russia, and Saudi Arabia. This means that IKEA is not only mindful about producing quality and affordable products but succeeded in achieving economies of scale. It must be pointed out that our company is already a global entity and there is no excuse as to why it could not improve its performance. We have all the resources needed to be as successful as IKEA. We only have to fine-tune some tools and strategies in order to break away from the competition.
There is one more feature of IKEA that must be highlighted here, and it is the fact that it uses the forces of globalization to achieve economies of scale. This means that IKEA was able to create a business with a global reach and thus also able to use its resources more efficiently. Aside from that, IKEA was one of the first to utilize what is now knows as “business process outsourcing,” such as the utilization of low production costs in countries like China and Poland. But these strategies are a double-edged sword; while it allowed IKEA to become a multibillion-euro home furnishing retailer, earning 19.6 billion in 2007, it also created problems for the company (Perez, 2007).
This is due to the fact that IKEA has factories in China as well as the simple fact that it is a global company with hundreds of stores in key cities all over the world. There are many issues here, like the sustainable practices of the company as well as the labor practices used by the company in places like China and Poland. For these problems, IKEA utilized PR principles to stem the tide of criticism and protect the image of the company.
Public Relations
Aside from strengthening the IT infrastructure of the company and create a highly effective website, our organization must take heed of a trend which is the marriage of Information Technology and Public Relations principles. It is therefore imperative to understand the significance of Public Relations (PR). The use of PR is nothing new (Harrison, 2000). Ever since man invented the printing press, there was already the realization that the public can be influenced by the kind of information that they have access to.
Those who may not agree with this view only need to study the background history of many revolutions and political upheavals in Europe before the turn of the 20th century, as well as the revolutionary fervor felt in former colonies in Asia and Africa. They will find the role of propagandists, publicists, and writers in mobilizing people to clamor for independence and change. These people have mastered the art of communication to the level that they can sway the opinions of the masses (see Chalke & Associates, 2000). Thus, political leaders and, even more so, dictators, are well aware of the power of the mass media, and whoever controls the printing press and the airwaves can control the people.
Decades ago, there was a revolution in the field of communication. It is simply called the Internet, and yet today, in the 21st century, the revolution is far from over. In fact, significant changes are being made on a regular basis. Computer programmers, as well as various users of the Internet, are continuously finding ways to increase the impact of the World-Wide-Web. It is no longer a system used to exchange electronic mail. Gone are the days when the Internet is only good for displaying government and non-government websites. It is also no longer limited to websites promoting various types of businesses that are offering all kinds of products and services.
With regards to PR, the significant evolution of the Internet is seen in how it can be used by an ordinary person to influence a sizeable portion of the population. The Internet is now a tool that can be used to express opinions that can be as mundane as the person’s favorite recipe to something as important as selecting the country’s top political leader. In the past, it was the media giants such as UK’s BBC that controlled what the public could and could not know about a certain issue. The public can, of course, access information using other means such as personal correspondence or discussing issues in the local town hall meeting, but everyone knows that this type of information dissemination will not make a dent in the greater scheme of things.
This time around, a single opinion voiced out in e-forums and different types of messaging boards can be accessed by hundreds or even thousands of people. It can create a snowballing effect where one comment can start a chain-reaction of events that will lead to major upheavals in marketing and policymaking. This is truly revolutionary because, in human history, it is governments or well-funded organizations that can cause considerable changes and not someone who is merely blogging in the comfort of his home.
This newly discovered freedom has attracted young and old as well as concerned citizens who used to be powerless against political and economic forces. This has tremendous implications; this time around, the ordinary consumer has found a medium wherein he can voice out his concerns as well as his complaints – it is something that a business organization must be wary of.
For our company, we will create a website that is not only a portal for online shopping but also a place where the company PR requirements can be fulfilled. This website will contain two major parts. The first part is an electronic catalog where customers can view images and pertinent information about a particular product that, in turn, will assist them in their shopping needs. The second part of the website deals with PR tasks.
When it comes to PR, the purpose of the website is twofold. The first one is to promote goodwill among customers, and the second is a defense against critics as well as e-journalists who may attempt to create a bad name for the company. In a meeting attended by representatives of over thirty national and regional public relations associations, the following statement was agreed upon:
Public relations practice is the art and social science of analyzing trends, predicting their consequences, counseling an organization’s leadership, and implementing planned programs of action that will serve both the organization’s and the public interest (Warnaby & Moss, 1997).
This would mean surveying the current IT landscape and find out new technologies used by the public and e-journalists when it comes to information dissemination. Our company should understand the potential impact of these technologies, such as social networking sites that can instantly create a community online. Imagine what can happen if one irate customer spreads negative feedback regarding our company.
There is a need to implement strategies and mechanisms that will control the damage. It would be best if we could also establish a system that can help prevent a media blitzkrieg on our company (see Case Study, Collapse of Opal House). At this point, it would be helpful if we could examine a successful model that was able to anticipate changes and adjust its business strategies to adapt to changes in the business environment.
Going back to IKEA, our company will learn much from visiting their website and observe that part of their PR job is to involve the local community. The program is called IKEA BUSINESS: A better life at work. It is actually a marketing ploy where IKEA solicits stories from successful entrepreneurs who were able to restyle their workplace – using IKEA furniture, of course – and increased their profitability due to improved ambiance, and yet they did not have to spend a great deal of money to create change.
It is hitting two birds with one stone because IKEA was able to help the local business community by providing not only affordable quality items but also free tips and advice on how to remodel their workplace and business establishment. This will send a message that IKEA is not only about making money but it is also about serving its customers. This is indeed a very clever strategy because those who will believe in their program will naturally buy IKEA products and not products from the competition.
Working with the community is just one side of public relations; the other aspect deals with the media, and in the 21st century, this should include the work of bloggers and e-journalists (Haig, 2000). Bloggers and e-journalists can be professional or non-professional writers, yet nevertheless, they have the power to influence public opinion. It is the site that Our Company must always be one step ahead of them, and this begins with the ability to supply the necessary information when needed.
For instance, there are online magazines that are hiring non-professionals to become their “digital journalists.” They are not hired as regular staff but encouraged to write articles about their local community, and if they produce quality work and if a significant number of readers subscribe to this particular article, this is the only time that the online magazine pays for the work of the writer. In the past, this company needed only to deal with national newspapers and at worst journalists working for the local paper but today our company must contend with those who have basic computer skills and can write decent prose.
Teenagers and housewives who are connected to the Internet can do untold damage with their forums and blogs. In other words, there are so many bases to cover, and this could not be solved by using traditional methods such as issuing press releases (Bivins, 1999).
On our website, we need to provide a space where we can communicate with the outside world. This is based on the idea that the “…media will persistently seek out information in the public interest,” as well as the fact that we must continually communicate to various interest groups (Macnamara, 2000). So on the Company website, we need to create a link that will guide visitors to a virtual page where they will learn more about current initiatives, such as how we try to comply with environmental laws. More importantly, the visitor will learn how we try to do extra work when it comes to our improving our labor practices. Again, our website will not only focus on online shopping, but it must also be transformed into an effective PR tool.
On our home page, customers can easily spot the message that says, we understand what it means to take care of this planet and being environmentally friendly when it comes to our business processes. This is a demonstration of corporate responsibility, and this is also an example of what experts call the “Two-way Symmetrical Model” of public relations (Grunig, 1999).
By using this model, our company will use communication to “…negotiate with publics, resolve conflict, and promote mutual understanding and respect between the organization and publics” (Grunig, 1999). This is being proactive on two fronts, and it informs the public with regards to the good things that we are doing – when it comes to reducing our company’s environmental impact – at the same time, we are feeding the right kind of information to the media.
Making Money Indirectly
In order to increase exposure, some companies would sponsor an event (Rene, 2000). In this manner, the participants and the media personnel who will attend the said event will help in spreading the news that this particular company is the major sponsor and then, as a result, will get free advertising in newspapers and TV shows (Boyd, 2000). In our case, we can get the best of both worlds by improving on what IKEA had done with their IKEA Business: A better life at work program.
What we can do is that instead of simply inviting the public to contribute free tips on how they were able to restyle their offices and business establishments, we can also sponsor a contest where the winners can avail of free items from our furniture catalog to help improve their office makeover. This is like sponsoring an event but without having to spend a great deal of money just to attract a lot of interest from the public (Matera & Artigue, 2000). In this way, we can make money by saving on sponsorship while at the same time reaching a greater number of people through an ingenious way of involving the community in our business endeavors.
We have to continually improve our online shopping capabilities for this can easily drive up sales. This must be done in conjunction with improving the quality of our products. But even if we will use traditional methods of improving our business model, a bad image can easily deter investors and other stakeholders from partnering with us. This is money down the drain. The company can also increase revenue by improving its image. This can give us a competitive advantage and will help endear the company to our target market. By covering our bases with respect to the PR department, this company can be assured of smooth-sailing operations that cannot be easily deterred by scandals and other forms of negative publicity.
References
Bivins, T. (1999). Handbook for Public Relations Writing: The Essentials of Style and Format. Chapter 6: News Releases and Backgrounders. 4th ed. USA: NTC BusinessBooks.
Chalke and Associates. PRIA 2000 Award Winning Campaign. The Australian Road Rules, South Australia. “Collapse of OPAL House” The Rowland Company (QLD).
Digital Journal (2009). “Get Paid to Work as a Digital Journalist.” Web.
Grunig, J. (1999). “The Importance of the Four Models of Public Relations.” Web.
Haig, M. (2000). E-PR. Kogan Page Limited. “Crisis e-PR’ pp. 130-138.
Harrison, K. (2000). Strategic Public Relations – A Practical Guide to Success. 2nd ed. Vineyard Publishing Ltd. Chapter 6: Effective Consulting IKEA. “IKEA United Kingdom.” Web.
Macnamara, J. (2000). Public Relations Handbook, Information Australia Chapter 4: Communicating with the Media.
Matera, F. & Artigue, R. (2000). Public Relations: Campaigns and Techniques. Allyn & Bacon, Chapter 12: “The Special Event Campaign.”
McGovern, G. & Norton, R. (2002). Content Critical. Pearson Education. Chapter 12: “The Five-Stage Publishing Strategy Approach.”
Perez, S. (2007). “IKEA expects to report revenue increase.” Web.
Rene, H. (2000). Marketing Public Relations. Iowa State University Press. Chapter 12: “How and When to Sponsor Existing Events.”
Sherwin, G. & Avila, E. (2000). Connecting Online: Creating a Successful Image on the Internet. The Oasis Press Oregon, Chapter 3: “Internet Benefits and Shortcomings”.
Small, P. (2000). The Entrepreneurial Web. Pearson Education, Chapter 15: “The Optimum Strategy.”
Warnaby, G. & Moss, D. (1997). “The Role of Public Relations in Organisations.” Public Relations: Principles and Practice. Thompson Business Press.