Teaching international public relations in the international marketing course: an organizing framework.

ABSTRACT

While some international marketing textbooks today devote at least a few pages to the public relations function of multinational firms, coverage remains limited and unstructured. To date, there has been no organizing framework to facilitate the classroom discussion of international public relations' strategies by objective. This paper presents a framework that analyzes the practices of international PR practitioners and sets forth recommendations regarding additional strategies that may prove useful or appropriate within the framework. The proposed framework organizes international public relations activities based on their potential usefulness under the conditions of market entry, maintenance (once the company has entered the market), crisis management, and government PR. The organizing framework should prove useful for those teaching international public relations, particularly as part of an international marketing course.

INTRODUCTION

Public relations developed more or less simultaneously in Europe and the United States during the 19th century (Nessmann, 1995). At that time, the focus of scientific study was primarily limited to how public relations influenced the media and newspaper reporting (Nessmann, 1995). Since then, public relations has expanded exponentially in both theoretical and practical terms to PR as we know it today (Nessmann, 1995).

Today, we identify public relations as so much more than simply influencing the media, and its role is critical to long-term organizational success. Today, public relations is defined as the marketing communications function charged with executing programs to earn understanding and acceptance with the internal and external publics on whom the organization's success or failure depends (Czinkota and Ronkainen, 1996; Cutlip, Center, and Broom, 1985; see also Grunig and Hunt, 1984). Furthermore, today's PR professionals are concerned with internal and external publics that extend beyond national boundaries. PR professionals with international responsibility are called on to simultaneously create trust and harmony, build consensus and understanding, articulate and influence public opinion, anticipate conflicts, and resolve disputes (Nessmann, 1995) in and across a variety of cultural settings. International PR practitioners "must do more than choose the appropriate gift for visiting customers, they must speak to them in their own languages, take part in international business discussions, and intimately understand the global, cultural context and socio-economic negotiations (Walmsley, 1998).

Most international marketing textbooks today devote at least a few pages to the public relations function of multinational firms. Often, the coverage is limited to a select few anecdotes about public relations disasters and few, if any, textbooks provide any sort of organizational framework for the various PR activities. As such, little guidance is provided to the international marketing professor in terms of content or structure. The purpose of this paper is to develop a framework for examining the practices of international PR professionals and to set forth recommendations regarding additional activities that may be useful or appropriate within the framework. The paper is presented in six sections. First, the organizing framework is briefly described. In the next three sections, international PR practices associated with (1) market entry, (2) maintenance (including public relations setbacks), and (3) government PR are identified. Each section includes examples of public relations activities in use, as well as suggestions for additional PR activities. Next, some general guidelines to practitioners regarding implementation of public relations activities are noted. The intention here is to provide students with a link between theory and application. Finally, trends affecting the future of international public relations are identified.

FRAMEWORK FOR ORGANIZING INTERNATIONAL PUBLIC RELATIONS' ACTIVITIES

International marketing textbooks generally cover the various methods of market entry (e.g. exporting, licensing, joint venture, and foreign direct investment), as well as the marketing mix strategies (product, price, promotion and distribution) used by an organization following market entry. A coherent discussion of public relations activities may reasonably be organized in much the same way. That is, one can examine the public relations activities appropriate to each method of market entry, as well as those activities appropriate for maintaining a positive corporate presence once the company has entered the foreign market.

There are at least seventy separate PR tactics currently in use (Harris 1998). Several activities helpful for achieving international PR objectives are presented (following the discussion) in Table I, within the organizing framework. The table includes the anecdotal examples identified in the existing literature, as well as those PR strategies presented as suggestions.

MARKET ENTRY

The four methods of market entry (exporting, licensing/franchising, joint venture, and foreign direct investment) can be considered as lying along a continuum from less integrated to more integrated strategies. Less integrated strategies are characterized as involving discrete transactions, a lesser commitment of assets, low risk/low profit potential, and low control. More integrated strategies are characterized as involving relational transactions, a greater commitment of assets, high risk/high profit potential, and high control. Public relations, as a marketing communication activity, gains in strategic importance to the extent that the method of market entry becomes more integrated. Foreign direct investment is at the most integrated end of the continuum; therefore, we begin the market entry section of this paper by looking at foreign direct investment.

Foreign Direct Investment

Conflicts typically arise when a firm enters a new country by acquiring a local company or investing in manufacturing (Johansson, 1997). When foreign companies become heavy investors in local businesses, local firms as well as consumers become alarmed (Johansson, 1997). Even though the economic justifications of these and other FDI entries are usually sound, and the host countries also benefit, the companies' PR departments have to work hard to establish a good local citizen image among stakeholders (Johansson, 1997). These stakeholders may include local governments, the general business community, and members of the trade. To minimize resistance by governing agencies, companies may compile local statistics about the number of locals employed, the local content of products, and the tax contribution made to the local municipality--and publish this information (Johansson, 1997). The intention is to quantify the economic impact of the business on the community. An example comes from IKEA, the Swedish furniture retailer, who has been required to fund studies to prove that entry into markets won't hurt local businesses (Sims 2005). IKEA says that the studies typically cost about $25,000 per potential store and that decisions take nearly a year (Sims 2005).

To further facilitate market entry into the local business community, the country manager may be required to involve the local business and surrounding community in the business plan (see Gornitsky, 1997). For example, companies may involve community members in planning, appoint groups to monitor development projects, appoint local specialists to an advisory board, and/or meet with special interest groups to provide updates on progress. As a result, such companies may be able to deter or resolve potential controversies, forge closer relationships with stakeholders, reduce opposition, and gain greater "buy-in" (Wasserstrom and Reider, 1998).

With members of the trade, Wal-Mart adopts an open-door approach. For example, when the Bentonville, Arkansas based retailer was interested in entering the British market via an acquisition, British retailers and manufacturers were eager for insights into how Wal-Mart runs its businesses. Ex-Wal-Mart executives met with representatives of top British chains as well as consumer goods companies to explain how Wal-Mart deals with suppliers, controls costs, and relates to consumers (Nannery, 1998).

Businesses looking for international expansion into developing countries often face a different situation. For example, oil and gas companies operating in Latin America, Africa and Asia have been called upon by communities in remote regions to provide basic education, health care, and other services (that normally fall within the domain of regional or national governments) in exchange for right-of-way access for seismic exploration (Wasserstrom and Reider, 1998). Prior to the early 1990s, community demands were comparatively straightforward; the crew chief merely had to negotiate small cash payments with community leaders in order to gain right-of-way access (Wasserstrom and Reider, 1998). Over time, political associations called "federations" emerged to win legal title to native lands (Wasserstrom and Reider, 1998). The federations looked to foreign companies (which generally operate under contracts with local governments) to provide a variety of essential services (Wasserstrom and Reider, 1998). Companies that refused to negotiate with local villagers or provide community benefits faced significant delays or had their exploration projects interrupted (Wasserstrom and Reider, 1998). A consensus among country managers is emerging that good long-term relationships are necessary for companies that hope to operate in the foreign market for a number of years (Gornitsky, 1997; Wasserstrom and Reider, 1998). The result is a win-win situation that translates to bottom-line benefits for the company (Gornitsky, 1997). Although helping nearby communities is recognized as the "right" thing to do (Gornitsky, 1997; Wasserstrom and Reider, 1998), some ways of helping are proving more sound than others. Companies need to help communities help themselves, rather than just help the communities (Wasserstrom and Reidel, 1998). Hewlett Packard Company's donation of computers to the University of Prague (Schroeder and Kapstein, 1991) is an example of helping communities. Another example is the one-hour promotional film produced by a British TV production company for the Seychelles government in exchange for being granted the privilege of hosting the Miss World Pageant in Seychelles, Africa (Anonymous, 1998). Seychelles, which relies heavily on tourism for hard currency, wanted to use the promotional video to attract more visitors to the islands.

Helping communities directly encourages long-term dependency and endlessly growing wish-lists (Wasserstrom and Reidel, 1998). Helping communities help themselves places the emphasis on training rather than giveaways, on providing seed capital for new businesses, and on creating employment opportunities outside the company's operations (Wasserstrom and Reidel, 1998). For example, as part of its long term strategy for growth in Latin America, IBM invested millions of dollars in an initiative to bring the latest technology to local schools (Czinkota and Ronkainen, 1996). Rather than donating computers, IBM provided the needed instruction and technological support (Czinkota and Ronkainen, 1996).

Additional Recommendations

The primary objectives of public relations for foreign direct investment are to establish a positive corporate image and to minimize resistance from the government, the community, and the trade. Toward promoting a positive corporate image, the company should seek corporate image assistance, as well as advice about cultural norms and expectations. To minimize resistance, the company can hold meetings with local officials to keep them informed and solicit input, and seek ways to identify with the local community. In some developing economies, it may be necessary to help develop the infrastructure for transportation of supplies or product distribution prior to establishing a foreign operation. As a result of these PR strategies that may be used during FDI market entry, companies may be able to deter or resolve potential controversies, forge closer relationships with stakeholders, reduce opposition, and gain greater "buy-in."

Joint Venture

In an international joint venture, a domestic firm buys part of a foreign company or joins with a foreign company to create a new entity with a particular objective in mind. Many joint ventures either fail or fall victim to a takeover by one of the partners. Each partner benefits from the skills, capabilities, and resources of the other. Often, the domestic company benefits from (and relies on) the foreign partner's local knowledge and contacts.

The primary role of public relations in the formation of a joint venture is to develop a solid corporate reputation that will attract joint venture partners (Eidson and Master, 2000) and maintain a positive image throughout the formation of the joint venture. Any faux pas could quickly turn into a public relations disaster.

When conducting research and negotiations with potential foreign partners, companies must take care not to offend anyone along the way, particularly those companies that are eventually rejected (Melvin, 1995). For example, if a company rejects a well-connected Chinese partner at a late stage, the company may find that it has alienated not only a potential partner, but also powerful players within the industry (Melvin, 1995). Further, the company's chances of entering the market may be damaged if the disappointed partner has some political influence over future ventures in the area (Tsang, 1995). PR representatives can be invaluable in advising negotiating personnel regarding cultural practices and expectations. Once an agreement is reached, the PR representative can assist in developing a corporate identity for the joint venture that is distinct from the identity of either partner and is relevant to the marketplace (Ackerman 1994).

Additional Recommendations

While it is important to develop a positive image to attract joint venture partners and to maintain a positive image throughout partnership negotiations, it is also important that the company be accepted by the local community and government as a new partner in the business community. A company seeking a joint venture may anticipate being able to depend on its partner for foreign contacts and acceptance. However, the high incidence of joint venture failures suggests that the company should seek relationships on its own prior to the selection of a joint venture partner. The partnership may eventually be discontinued for any number of reasons. If the company wishes to continue doing business in the foreign market, the company may acquire its partner or set up its own operations. In any event, it behooves the company not to be a stranger to the local business community or the local government. PR strategies that may be useful in this regard include meeting with trade and local officials to start building relationships that are independent of the joint venture, advising personnel about cultural norms and expectations to promote a positive image, and to localize the company image in an effort to reduce the "foreignness" of the company.

Licensing/Franchising

Many companies adopt a less integrated approach to market entry. Rather than entering a market via foreign direct investment, companies may instead expand internationally by licensing or franchising. Licensing is a legal process whereby a licensor agrees to let another firm use its manufacturing process or intellectual properties in exchange for royalties and fees. Franchising is a form of licensing that has grown rapidly in recent years. The main advantage of franchising over licensing is that it allows greater control over business operations.

Public relations can play a dual role when it comes to licensing/franchising. According to Jim Amos, who in recent years sold master licenses covering 24 countries for I Can't Believe It's Not Yogurt, "Public relations not only generates qualified prospects, it provides credibility for expansion into a given country" (Hayes, 1993). Mike Minihane, who awarded 14 master licenses in nine months for Los Angeles-based Futurekids, says 25 percent of his leads are generated by public relations (Hayes, 1993). Credibility for expansion into a country comes from articles that appear about the franchise in trade magazines or newspapers; "investors pay more attention to the editorial copy than to a paid advertisement," Amos says (Hayes, 1993). One article in a Canadian publication resulted in more than 300 telephone inquiries (Hayes, 1993). Once a master license has been awarded, a company may decide to get on the trade show circuit to recruit franchisees (Hayes, 1993).

Additional Recommendations

Under licensing or franchising, an individual or company in the foreign market produces and markets the product or service. The revenues accrued to the licensor/franchisor grow in proportion to the number of licensees/franchisees successfully recruited. Therefore, the focus of public relations is primarily on recruiting. A second concern is to make sure that the company's ways of doing business are acceptable to the foreign market. Once again, advice regarding cultural norms and expectations is critical. A third concern is to promote the success of the licensee or franchisee by building demand for the brand. Offering public seminars and providing an Internet home page to present information about the company and its opportunities may attract licensees/franchisees, as well as increase public awareness and favorable opinion. Using celebrity spokespersons may help build demand for the brand, as well as attract potential licensees/franchisees.

Exporting

When a company decides to enter the global market, exporting is the most common method of market entry. Exporting is selling domestically produced products in another country. The most common intermediary is the export merchant, who is usually treated like a domestic customer by the domestic producer. The buyer assumes all risks and sells internationally for it's own account; the domestic firm is involved only to the extent that its products are purchased in foreign markets (Lamb, Hair, and McDaniel, 1994). Therefore, the role of public relations for exporters is more limited than with the other market entry strategies. The main objective for public relations using an export strategy is to build selective demand for the brand to support the sales efforts of intermediaries. Companies may use publicity or appear at trade shows to build selective demand.

MAINTENANCE

Once a company enters a foreign market, public relations activities are directed at maintaining a positive corporate image for the company and its products. According to Briggs (1998), maintaining the reputation of an organization ultimately may be the most important function of public relations. Maintenance activities generally focus on corporate citizenship, corporate image, brand awareness, and issue management.

Corporate Citizenship

A significant part of public relations activity is portraying multinational corporations as good citizens of their host countries (Czinkota and Ronkainen, 1996). Corporate citizenship is important to employees, customers, and communities. As Czinkota and Ronkainen (1996) explain, employees don't want to work for companies that have no social conscience, customers don't want to do business with companies that pollute the environment or are notorious for shoddy products and practices, and communities don't welcome companies that aren't good corporate citizens. A recent Roper survey found that 92 percent of the respondents felt that it was important for marketers to seek out ways to become good corporate citizens (Krol, 1996). Consumers are particularly interested in those who get involved in environmental, educational and health issues (Krol 1996).

Good corporate citizenship can involve a variety of activities. Some companies exhibit good corporate citizenship by funding special projects. For example, the Heinz foundation contributed $50,000 toward the construction of a hospital at the Kutama mission and helped to fund the construction and operation of a medical clinic in Zimbabwe. IBM funds projects worldwide and promotes employee volunteerism (Czinkota and Ronkainen 1996). In Thailand, IBM provided equipment and personnel to universities and donated money to the nation's wildlife fund and environmental protection agency (Czinkota and Ronkainen 1996). To Wal-Mart, corporate citizenship means sponsoring local sports events, donating to or sponsoring local charity events, building schools, and befriending government officials by inviting them to visit the company's Bentonville, Arkansas headquarters (Nannery, 1998; Wonacott, 2000). McDonald's sponsors schools, sports clubs, and children's hospitals (Block, 1999). According to McDonald's managing director in Yugoslavia, such activities integrate the company into the community and afford them protection against potential anti-American sentiment (Block 1999).

Some companies find it beneficial to communicate to stakeholders initiatives the company is taking. Unilever publishes a yearly progress report on its global environmental and social initiatives. For example, they reported that 90% of the energy used in its Indian Tea factory came from renewable resources, up from 14% the year prior.

In many countries, increased privatization and government cutbacks in social services offer numerous opportunities for companies to make substantive contributions to solving various global, regional, and local problems (Czinkota and Ronkainen 1996). Conservative governments in Europe are welcoming private sector programs to provide job training for inner city youth, to meet the needs of immigrants, and to solve massive pollution problems (Czinkota and Ronkainen 1996).

Building Corporate Image

In addition to assisting with community needs, multinational corporations can build corporate image through cause-related marketing. Cause-related marketing first came into prominence in the 1980's when many companies were flush with cash and looking for a novel way to promote themselves as socially responsible corporate citizens (Mihaly, 1997). Most people regard cause-related marketing as tying the sale of a product to a cause, with a portion of the proceeds going to the cause (Fellman, 1999; Mihaly, 1997). However, many companies have gone beyond such tactics by tapping into issues important to the target market and developing special programs to either raise awareness for the cause or respond directly to the nature of the cause. For example, New York Based Avon Products, Inc. has been a recognized leader in causerelated marketing with programs aimed at raising awareness of breast cancer, a problem afflicting its target audience of women (Fellman, 1999). The Body Shop, a women's apparel retailer, launched a major outreach campaign to increase awareness of HIV and AIDS among women, the fastest growing group affected by the disease (Miller, 1993). Liz Claiborne has called attention to domestic violence (Miller, 1993).

Bristol-Meyers and Estee Lauder have taken cause-related marketing a step farther. BristolMyers is spending about $18 million in Botswana to build a Harvard Universityassociated AIDS research laboratory and to pay for clinical trials (Walldholz, 2000). Estee Lauder Co. formed The Breast Cancer Foundation to fund research into the causes and treatment of breast cancer (Miller, 1993). As explained by a senior marketing executive for Liz Claiborne, "because most of our products are sold to women, it seems only right to help women with some of the very pressing issues in their lives" (Miller, 1993).

Quantitative research conducted in the United States and in the UK in 1996 and 1997 demonstrated that the reaction of consumers to cause-related marketing was far more positive than businesses had anticipated (McNeill and Mirfin, 1998). For example, 86% of UK consumers agreed that they would have a more positive image of a company that was involved in cause related marketing (McNeil and Mirfin, 1998). A similarly high number asserted that, if price and quality were equal, they would be more likely to buy a product associated with a cause or charity (McNeil and Mirfin, 1998). A similar study by Chaney and Colli (2001) found that 15 percent of New Zealand customers had been induced to purchase a cause-related marketing product even though it was not their usual brand, and 10 percent of purchasers claimed to have increased the quantity of the product they bought as a result of the promoted charity link. Studies conducted in Australia by Cavill + Co. (1997, 2001) report that more than half of the Australian population (54%) are prepared to switch brands for one that supports a good cause providing quality and price are equal. The results from these studies are notably in line with US research, suggesting that cause related marketing can translate successfully across the Atlantic (McNeil and Mirfin, 1998) and is perceived as more favorable by consumers than commercial sponsorship activities (d'Astous and Bitz, 1995).

In addition to cause-related marketing, companies can build corporate image using several other more traditional PR strategies. These may include appearances at trade shows, media appearances, having a corporate presence on the Internet, sponsoring seminars, and having a celebrity spokesperson. Making an effort to adapt to cultural norms can also help build corporate image. For example, the typical gathering of Wal-Mart employees at US stores each morning to recite a company cheer is designed to build team spirit (McCartney 2006). This activity is very much in keeping with social norms in the United States. However, German workers find these activities offensive and arrogant (McCartney 2006). If Wal-Mart were to insist that German stores implement these team-building strategies, the company would risk alienating its employees and make the firm vulnerable to negative publicity. In keeping with strategies designed to develop a positive image in the countries in which it operates, Wal-Mart adapted to cultural norms of Germany. The cheer is optional and some stores choose not to participate (McCartney 2006). Adapting to the German culture could advance the image of the company in Germany.

Building Brand Awareness

While maintaining the reputation of a corporation may be the most important public relations objective, PR efforts may be directed toward other goals such as building brand awareness in the global marketplace. In fact, Briggs (1998) argues that the two are virtually synonymous. Maintaining the corporate image of a company equates to "managing brand equity, the difference between an organization's fixed asset value and its worth in the marketplace. Often five or 10 times greater, or even more, than the cash assets, brand equity is the bottom line. It is a company's most important asset. It is measurable. It is what board, CEO, and shareholders care most about" (Briggs, 1998).

Some of the PR strategies that may be used to build brand image include special events designed to generate publicity, using celebrity spokespersons, and sports and special event sponsorships. One example of public relations efforts used to generate brand awareness through publicity is the famous chess game rematch of 1997 between Russian chess-master, Gary Kaparov, and IBM's computer named "Deep Blue" (Ziegler, 1997). IBM estimates that the match generated about $100 million in favorable earned media.

According to Pepsi-Cola, efforts to build brand awareness can have added benefits. For example, Pepsi, a minor player in Japan, wanted to become recognized as a major international brand (Onkvisit and Shaw, 1997). The company tied its promotional campaign to Michael Jackson's thirteen concerts in Japan (Onkvisit and Shaw, 1997). The publicity generated resulted in improved employee morale as well as a 100 percent increase in summer sales (Onkvisit and Shaw, 1997).

Heineken has been particularly active in sponsoring sports and other special events in building brand image. In the past, Heineken sponsored such sporting events as the US and Australian Opens and the Davis Cup (Dorsey 2000). More recently, Heineken has moved from sponsoring events to organizing them. The company created the Shanghai Open, China's first international tennis tournament, as well as the regatta off the island of St. Maarten (Dorsey 2000). Heineken also organizes special events. In the Netherlands, Heineken introduced "Heineken Night Life, a music and film event featuring big name performers (Dorsey 2000). It also organized a Heinken Night of the Proms music event in the Netherlands and an annual Jammin pop festival (Dorsey 2000). Heineken organizes hundreds of locally tailored music events in bars, cafes and pubs in France (Dorsey 2000). Heineken's international marketing manager wants consumers to say "Only Heineken can give me this memorable experience" (Dorsey 2000).

Building brand or corporate image may be particularly challenging to corporate entities organized as joint ventures. PR communications become more complex since the partners must reach agreement on key messages and news content (Shore, 1997). Such agreement may be particularly challenging in countries such as China, where knowledge of how to promote corporate image is rare (Anonymous, 1995). Finally, the planning and approval cycles of the partners may differ, creating delays (Shore, 1997).

Issue Management

With the diversity of issues that are important to any multinational company, developing an early-warning system for tracking public issues that can negatively affect corporate image is crucial (Mackiewicz, 1993). The goal of an issue management plan is to identify potential problems before they develop so that the company has an opportunity to shape, rather than merely react to, public opinion and decision-making. Petroleos De Venezuela, SA, which operates in Europe and the U.S. (where it is the sole owner of CITGO), adopted the issues management process in 1991 and has since helped shape public policy decisions in such areas as export taxation and environmental regulations (Mackiewicz, 1993).

Additional Recommendations

For companies already established in foreign markets, an ongoing image campaign may include sending newsletters to employees, customers, suppliers, and other stakeholders. Newsletters, as well as press releases sent to the media, can emphasize the company's involvement in the community, support of charitable causes, environmental practices, infrastructure developments, awards sponsorships, and prize contributions. To build corporate and brand awareness, the company can participate in trade shows, sponsor seminars, make appearances on radio or television shows, use local celebrity media spokespersons, and establish a presence on the Internet. With regard to issue management, the company should meet regularly with special interest groups and have a crisis communication plan in place.

Furthermore, many companies (like many of the oil companies) are using role-play to simulate a crisis situation, complete with reporters, families of the injured, the company spokesperson, etc. "For years, Southwest Airlines diligently studied other companies' processes for handling disasters and practiced crisis-management using role play drills" (Griffin 2000). Role-play exercises should be conducted at least annually to maintain an effective and ready crisis management team.

PUBLIC RELATIONS SETBACKS AND CRISIS MANAGEMENT

Despite the best of intentions, not all public relations efforts work out as intended. When Reebok agreed to officially sponsor a month-long 1994 World Cup soccer tournament, the teams of two of Reebok's four big-name stars (Columbia and Argentina) unexpectedly lost early in the tournament (Power, 1994). The company, expressing empathy with Columbian and Argentine soccer fans, reacted by running an ad on Cable News Network's weekly highlights program with the slogan: "Soccer is not a matter of life and death (Power, 1994). It's much more important than that". Unfortunately, the company had to cancel the ad after angry fans murdered Columbia's Andres Escobar (Power 1994). To make matters worse, Reebok drew further negative attention when the evidence seized in the O.J. Simpson murder case included Simpson's white Reeboks (Power, 1994).

A crisis can occur with little warning, anywhere, anytime (Darling 1994). When a crisis strikes, a company often finds itself thrust into the spotlight (Keegan 1999). What defines a crisis in international business depends on a number of variables: the nature of the event; how many people, if any, need emergency care; the importance of the issue to foreign and US governments; the impact on other firms (including suppliers or distributors) and industries; who and how many individuals, inside or outside the organization, need to be informed, and how accessible those people are; how much interaction with the media is necessary and what the media choose to emphasize; how much the organization needs to assert control and demonstrate that it is capable of responding; and how quickly the firm is actually able to respond (Darling, 1994).

The source of public relations crises can be primarily external or primarily internal. External crises are those associated with occurrences in the firm's political, legal, economic, or socio-cultural environment that draw negative attention to the organization. For example, one day after the 78-day air war against Yugoslavia broke out, McDonald's restaurants were vandalized by angry mobs (Block, 1999). McDonald's Corp. was forced to close its 15 restaurants in Yugoslavia for about three weeks (Block, 1999). "McDonald's is a global symbol of western pop culture, Yankee knowhow, and American corporate cunning. But prominence on the world stage can be a lightening rod for trouble, and the company is often exposed to outbursts of anti-American sentiment and a myriad of political grievances" (Block, 1999, B1). External public relations crises may also occur when celebrity spokespersons for a company receive negative publicity. Kobe Bryant lost millions in endorsement deals with McDonalds, Sprite, and Nutella after he was charged with sexual assault (Levenson 2005). Similarly, O.J. Simpson's relationship with Hertz ended in late 1992 when reports of domestic abuse surfaced (http://en.wikipedia.org/wiki/The_Hertz_Corporation).

Internal crises are those associated with occurrences thought to be under the control of the organization. For example, oil giant Shell came under fire from environmentalists over the proposed dumping of the oil platform Brent Spar at sea and the effects of its projects in Nigeria (Wilkinson, 1999). Fast food company McDonalds had to contend with the media after bringing a libel action against two individuals who had made allegations about the fast food chain in campaign leaflets (Wilkinson, 1999). IBM's high profile sponsorship of the Summer Olympics in Atlanta turned into a public relations disaster when its scoring system spewed out the wrong results for reporters (Ziegler, 1997). Coca-Cola was blamed when a batch of bad carbon dioxide was used by one of its plants and chemicals used in another factory apparently got into some cans (Schmidt, 1999). According to Hamish Pringle, former vice chairman of Saatchi & Saatchi, "The problem that these companies are facing is that information about their activities is becoming ever more widely available. If you go back ten to 20 years, it was hard to see what companies were doing. Now the media has made them much more transparent" (Wilkinson, 1999).

Complicating Factors

One of the many complicating factors in international public relations is that consumers in one market may react to marketing strategies employed in another market (Czinkota and Ronkainen, 1996). The question is raised whether multinational companies should be held to the same standards of ethics and taste as they are in their home country (Parker-Pope, 1996). Does it make a difference if images that are offensive in one culture are benign in the market where the ads are shown (ParkerPope, 1996)? For example, the Interfaith Center in Corporate Responsibility urged ColgatePalmolive to stop marketing Darkie toothpaste in Asia because of the term's offensiveness in other parts of the world (Czinkota and Ronkainen, 1996). Colgate responded by redoing the package and changing the brand name to Darlie.

When Ford Motor in Europe decided to modify its U.K. ad campaign to run in Poland, it used computer graphics to super-impose white faces on photos of its Black, Indian, and South Pakistani workers (Strassel, 1996). The picture surfaced when a handful of the workers who had posed for the original photo saw a reprint of the new company brochure (Strassel, 1996).

Anheuser Busch faced a similar situation when it used American Indians to sell Budweiser beer in Britain. While the ads were popular in Britain, Indian advocacy groups said the campaign was insensitive to the problem of alcoholism among American Indians. The ad was part of a campaign airing only in Britain and British consumers were unaware of negative stereotypes of Indians and alcohol (Parker-Pope, 1996).

As often as not, questionable ads airing in foreign markets boomerang back to the advertiser's home market (Parker-Pope, 1996). That's when advertising in foreign markets suddenly becomes a critical public relations issue for the multinational at large.

Mishandling Negative Publicity

When negative publicity is mishandled, the situation faced by the corporation can deteriorate quickly. For example, the adverse publicity generated by powdered milk formula as a breast-milk substitute marketed in less developed countries by Nestle became a publicity nightmare that engaged the company in a long and costly conflict (Onkvisit and Shaw, 1997), not to mention a six year boycott of Nestle's products (Czinkota and Ronkainen, 1996). Church groups and consumer groups accused Nestle of promoting the product to those who could least afford it or were unable to use it properly (Onkvisit and Shaw, 1997). Nestle added fuel to the fire when it ran an antiboycott ad in the Oxford Independent, a student newspaper at Oxford Brooks University (Wilkinson, 1999). The Advertising Standards Authority found three claims made in the ad to be unsupported and warned Nestle not to repeat the three claims (Wilkinson, 1999).

Perrier mishandled negative publicity by responding with inaccurate information. In 1990, Perrier was forced to recall 160 million bottles of is sparkling water after traces of benzene contamination were found (Magiera, 1994). Perrier botched its communications efforts in the early days following the crisis by claiming that a technician had contaminated a tank during routine cleaning (Magiera, 1994). Ultimately, Perrier executives were forced to admit that the company's water contains benzene when it comes out of the ground; the chemical has to be removed by filtration (Magiera, 1994).

Nike and other marketers have received a great deal of negative publicity regarding alleged sweatshop conditions in factories run by subcontractors (Keegan, 1999). Nike's public relations team has not done an effective job counteracting the criticism by effectively communicating the positive economic impact Nike has had on the nations where its sneakers are manufactured (Keegan, 1999).

It took seven days for Coca-Cola to respond to press reports of children and adults in Belgium and Northern France becoming ill after drinking Coca-Cola products (Schmidt, 1999). Coke misread consumers' level of concern when the reports first surfaced (Schmidt, 1999). While Coke focused on denying that its product was responsible for the illnesses, the media filled the information vacuum with speculation and accusations from other sources (Schmidt, 1999). Before Coke had the chance to selectively recall products that may have been part of the affected shipments, governments throughout Northern Europe were banning and recalling Coke soft drinks or, in some countries, all Coke products (Schmidt, 1999).

Ignoring adverse publicity gives the impression of arrogance, and it wastes critical time that could be used to solve the problem (Onkvisit and Shaw, 1997). A 'no comment' response conveys the impression of uncooperativeness and implies guilt (Onkvisit and Shaw, 1997). In the absence of formal comment, people assume it's worse than it is (Schmidt, 1999). The best response is to be forthright and direct, reassuring the public, and providing the media with accurate information (Keegan, 1999). The first response must be to express concern for the situation. The public's perception must be that the company cares about those affected by the crisis. For example, McDonalds in Yugoslavia reached out to its local customers during the air war against Yugoslavia by redesigning the McDonald's logo to add a sajkaca (a Serbian cap symbolizing cultural heritage) to the golden arches, reintroducing the McCountry pork (the most Serbian of meats) burger to the menu, and handing out free burgers at anti-NATO rallies (Block, 1999).

When the source of the crisis is internal, the company must be willing to take responsibility and to implement change measures to prevent the situation from worsening or the crisis from occurring again in the future. This may involve, for example, the immediate recall of suspect products, the closure of sweatshop factories, or the cancellation of offensive advertising.

Finally, the company needs to remedy the situation by providing restitution to those affected. Following reports of illness in Belgium and France resulting from drinking Coca-Cola, the company ultimately set up a consumer hotline and offered to pay all medical bills (Schmidt, 1999). When Ford Motor of Europe superimposed white faces over photos of the Black, Indian, and South Pakistani workers who posed for its ads, Ford ended up apologizing, awarding each of the workers the equivalent of $2,318 in compensation (Strassel, 1996), and pulling the ads (ParkerPope, 1996).

Albritton and Manheim (1985) argue that when the publicity is particularly negative, there may be a benefit to reducing visibility for a period of time (a cooling off period). Then, a gradual increase in the percent of positive exposure may produce incremental shifts in attitude in a generally positive direction (Albritton and Manheim, 1985). In general, all decisions regarding the handling of a crisis situation should be made based on the public good, rather than on cost (Onkvisit and Shaw, 1997).

Additional Recommendations

When a crisis occurs, the primary public relations objectives are to have a crisis communications plan in place and to be responsive. The company can be responsive through press releases to the media, holding press conferences, establishing media and consumer hotlines, making television and radio appearances, and holding meetings with special interest groups.

PUBLIC RELATIONS IN THE GOVERNMENT SECTOR

While much of the discussion of international public relations tends to focus on the corporate sector, governments are increasingly becoming aware of the importance of public image, particularly as trade barriers continue to fall. The PR activities undertaken by foreign governments vary widely. Many national governments have been criticized for their lack of communications with the public and the media, as well as for inept handling of crisis situations. Taguchi (1995) discusses the mishandling of the Kobe earthquake crisis by the Japanese government. She suggests that "the government's non-practice of public relations caused a second, avoidable disaster for Japan's relationships with the international community and with its own citizenry" (Taguchi 1995, p.31). First, the central government failed to order troops to rescue more than 1,000 trapped survivors until four hours after news of the incident (Taguchi 1995). Second, the government failed to respond quickly to international relief offers (Taguchi 1995). "People worldwide were outraged since this was against universal human values" (Taguchi 1995, p.33). Third, the government did not advise residents where to find water, medical care, or other assistance (Taguchi 1995). Fourth, there was no communication between relevant agencies. Fifth, the Prime Minister appeared to be unaware of the earthquake even three hours after it occurred (Taguchi 1995). Two and a half days later, when he visited the site, he was shocked to learn of the scale of destruction (Taguchi 1995). Despite the fact that significant earthquakes had hit Japan thee times in the three months prior, the government had no crisis plan in place (Taguchi 1995).

Japan's lack of public relations is not limited to crisis management. Japan's image suffered miserably during the Gulf War as a result of its failure to communicate.

"Despite contributing $US13 billion, more than any non-Arab country, Japan's effort was partly seen as "too little, too late" in the U.S. It is interesting to note that Americans had a much better impression of Germany, whose contribution was smaller than Japan ... The simple fact is that during the Gulf Crisis, Germany practiced good PR, and Japan did not." (Taguchi 1995, p.33)

Fortunately, the trend toward awareness and advancement of government public relations is notable. A number of third world countries have hired US public relations firms to directly lobby with the US government, prepare press kits and similar materials, counsel embassy personnel regarding how to phrase discussions of such topics as terrorism or human rights, organize field trips for the press, conduct meetings and programs highlighting economic or other resources of the client country, establish personal contact between client-government officials and influential US officials or journalists, and provide advice as to specific policies that could favorably affect the image of the client government (Cooney, 1979; Davis, 1977; Tedlow and Quelch, 1981).

China, in particular, has had a "tremendous international image problem" (Brauchli 1996, A1). Wanting to ensure that the U.S. doesn't endanger business ties, Boeing Co., General Motors Corp. and other multinationals formed an unconventional alliance called the China Normalization Initiative to help Beijing moderate its image through better public relations (Brauchli, 1996).

Additional Recommendations

Governments are increasingly concerned with public image. Often, the public relations tactics are directed at explaining or clarifying the government's position on key issues. To this end, suitable public relations tactics include meetings with special interest groups, making information available via an Internet home page, having public officials make TV and radio appearances, holding press conferences, and establishing media hotlines. When a government implements a new initiative, a special event may be useful to earn public support.

General Guidelines Regarding Implementation

In reviewing the experiences of some companies' public relations efforts, a few lessons can be learned. First, as mentioned previously, companies need to help communities help themselves, rather than just help the communities (Wasserstrom and Reidel, 1998). Helping communities (by providing giveaways) directly fosters long-term dependency and endlessly growing wish lists (Wasserstrom and Reidel, 1998). Whatever impact the company wishes to have should be self-sustaining once the funding is withdrawn or redirected.

Second, companies looking to assist in solving community or national problems would be wise to seek input from the community and the government. When Bristol-Myers set up its program to fund medical research and AIDS education, the company did not reach out in the beginning to members of the community or to the very top people in government (Waldholz, 2000). As it turned out, members of the community were more concerned about protecting the unaffected and providing prenatal care for young and infected pregnant women than for money to conduct expensive research or for testing new drug combinations (Waldholz, 2000). Government officials that were not consulted felt slighted, and even suspicious of the company's motives (Waldholz, 2000). Third, although companies want to be able to publicize the positive impact they are having on a community or a cause as a result of their public relations efforts, they should be careful not to overdo the fanfare. Local citizens may be offended by a company's efforts to publicize its projects (see Waldholz, 2000). The net effect may be to hurt, rather than help, the company's image and relationships with its publics.

Fourth, companies must be sensitive to cultural differences worldwide and assess the impact that a given strategy implemented in one country might have on consumers and organizations in other countries. In this age of global travel and electronic communication, negative consumer reactions can originate anywhere and be disseminated everywhere.

Finally, companies should recognize that no matter how much care they take in implementing their public relations strategies, things can (and sometimes do) still go wrong. The company must have a crisis management system in place before a crisis occurs. The system must include for example, a list of whom in the corporation needs to be informed, established relations with the media, and a global public relations team ready to advise regarding cultural nuances. Most importantly, a response that reflects sensitivity and empathy to those affected by the crisis must be made in a timely fashion.

TRENDS AFFECTING INTERNATIONAL PUBLIC RELATIONS

The emergence of the Internet presents a whole new set of challenges for multinationals (as well as foreign governments). Based in part on the power of the Internet, some suggest that we are seeing the dawn of the "transparent corporation" (Pinkham, 1998). "For example, look at the furor that is being raised over working conditions in U.S. owned manufacturing plants located in third world countries. There was a time when contractors in a plant in eastern Asia were unearthed by the parent company and--ideally--were promptly corrected. Now we live in a world where news about violations of law or even violations of good moral behavior are disseminated worldwide sometimes before the company knows about it" (Pinkham, 1998). There are now an estimated 349 million Internet users worldwide, and that number is projected to grow to 766 million by the year 2005 (Lawrence 2000).

Computer chip-maker Intel experienced the power of the Internet when it failed to acknowledge a technical defect in the company's flagship Pentium chip (Keegan and Green, 1997). The college professor who discovered the flaw posted his complaint on the Internet and word spread quickly, not only about the flaw, but about Intel's lack of response (Keegan and Green, 1997). Only after weeks of negative publicity did Intel announce that new Pentium chips would be available to anyone who requested them (Keegan and Green, 1997).

Companies that are unresponsive to consumer and public concerns may find themselves the target of an Internet consumer complaint forum. These company-specific complaint sites are established by individuals (or groups) who are not affiliated with the target company (HarrisonWalker and Erdem, 2000). The typical motive is to use the site as a weapon against a company that is otherwise untouchable.

On the positive side, people who work in public relations have a greater ability to send information out over the Internet at warp speed (Pinkham, 1998). Research services can be contacted round the clock; the media can be contacted in an instant; and a grass roots campaign to enlist the support of shareholders, customers, employees, retirees, or suppliers can be up and running almost overnight (Pinkham, 1998). An interesting new development world-wide is the emergence of online press rooms. From this area on a corporate web site, companies can deliver any type of news to the press, making it easy for journalists to obtain information about the company, while simultaneously serving as a channel for information requests to the company (Naude, Froneman, and Atwood 2004). Seventy percent of journalists list company websites as the first place they look when researching a breaking story or a feature (Anonymous 2002).

An analysis of 120 corporate websites from Denmark, France, Germany, Norway, Singapore, Spain the United Kingdom, and the United States underscored the importance of webbased media centers for meeting journalists' demands for information and achieving organizational objectives (Alfonso and Miguel 2006). While 87% of the web sites analyzed had specific links on their homepages targeting customers, a full 78% had hyperlinks to media-specific pages (Alfonso and Miguel 2006). Ninety-two percent of large companies had online press rooms (Alfonso and Miguel 2006). The content in these press rooms may include press releases, backgrounders and biographies, historical information, financial data , press clips, and photo/video/audio archives that journalists can download (Alfonso and Miguel 2006).

It's not just companies that spread the news about companies. Consumers can prove to be quite helpful in generating positive publicity for a company or a brand. With growing interactive technologies, consumers can initiate interest in a brand by engaging in a variety of online communications including email, online bulletin boards, blogs, and web sites (Vranica and Terhune 2006). This kind of consumer-led activity, referred to as consumer-generated media ("CGM"), is said to be growing at 30% per year (Vranica and Terhune 2006). To leverage CGM to the marketer's advantage, someone in the company needs to be in charge of monitoring and disseminating relevant information (Vranica and Terhune 2006). An excellent example of CGM occurred in the summer of 2006 when over 800 amateur videos flooded the Internet showing an experiment dropping quarter-sized Mentos candies into bottles of Diet Coke (Vranica and Terhune 2006). The combination resulted in a geyser of soda that shoots as high as 20 feet in the air (Vranica and Terhune 2006). The popularity of the videos (see www.EepyBird.com) is free publicity for Mentos. Mentos estimates the value of the free publicity at over $10 million (Vranica and Terhune 2006). The company is considering a marketing deal with the two men who had the most elaborate video using 101 two-liter bottles of Diet Coke and 523 Mentos to create a dancing fountain like at the Bellagio Hotel in Las Vegas (Vranica and Terhune 2006).

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L. Jean Harrison-Walker, The University of Houston-Clear Lake

Table 1: Public Relations Strategies

PR Strategies                            Market  Entry

                                 Foreign     Joint     Licensing/
                                 Direct      Venture   Franchising
                                 Investment

Create employment                    x
opportunities outside company
Involve community members            x
in planning
Appoint groups to monitor            x
development projects
Provide seed capital for new         x
businesses
Establish local advisory board       x
Set meetings with the trade          x
Set meetings with local              x          x
officials
Advise personnel about               x          x           x
cultural norms and
expectations
Image consulting                     x          x           x
Localize the company image           x          x           x
News release                                                x
Trade shows
Internet home page                                          x
TV/radio appearances                                        x
Develop essential services for       x
foreign market
Providing training/tech              x
support to external entities
Develop infrastructure               x
Meet with special interest           x
groups
Measure/report economic              x
impact of the firm on
community
Solve local environmental
problems
Donate products to local
institutions
Issue management
Fund research
Fund special projects
Donate to charities
Employee volunteerism
Sports and event sponsorships
Cause-related marketing
Contribution of prizes
Awards sponsorship
Newsletters
Host government officials at
corporate headquarters
Celebrity media spokesperson
Special events
Seminars and symposia
Lobbying
Crisis communication plan
Consumer hotline
Maintain low profile
Media hotline
Press Conference
Field trips for the press
Report on initiatives

PR Strategies                                Main-     Crisis    Govern-
                                             tenance   Manage-   ment
                                 Exporting             ment

Create employment
opportunities outside company
Involve community members
in planning
Appoint groups to monitor
development projects
Provide seed capital for new
businesses
Establish local advisory board
Set meetings with the trade
Set meetings with local
officials
Advise personnel about                                              x
cultural norms and
expectations
Image consulting                                                    x
Localize the company image           x                              x
News release                         x          x         x         x
Trade shows                                     x         x         x
Internet home page                              x         x         x
TV/radio appearances                            x         x         x
Develop essential services for                  x
foreign market
Providing training/tech              x
support to external entities
Develop infrastructure               x          x
Meet with special interest                      x         x
groups
Measure/report economic
impact of the firm on
community
Solve local environmental                       x
problems
Donate products to local                        x
institutions
Issue management                                x
Fund research                                   x
Fund special projects                           x
Donate to charities                             x
Employee volunteerism                           x
Sports and event sponsorships                   x
Cause-related marketing                         x
Contribution of prizes                          x
Awards sponsorship                              x
Newsletters                                     x
Host government officials at                    x
corporate headquarters
Celebrity media spokesperson                    x
Special events                       x          x
Seminars and symposia                           x
Lobbying                                        x         x
Crisis communication plan                       x         x
Consumer hotline                                x
Maintain low profile                                      x
Media hotline                                             x         x
Press Conference                                          x         x
Field trips for the press                                           x
Report on initiatives                         x         x

Key: x = examples from existing literature;
x = additional tactics recommended