Month: December 2015

What is a definition of publicity?  This is one — the lavish opening of a new Star Wars film.  Disney is known for its show business skill, and it put it to work for the grand opening of a film that cost it $4.3 billion to make — if you count the purchase of Lucasfilm into the production cost.  Disney expects to make $2 billion of that back with just this film.  The economics of Hollywood are boggling.  The publicity for the film had been going on for months leading to the premiere.  Disney left no opportunity on the table to make sure that Star Wars fans are panting to see the movie.  Disney’s public relations is the film itself — does it equal or better previous Star Wars features? Initial whispers are that it does.  That means the fan frenzy that Disney has whipped up will be satiated and primed for more.  What else could a movie studio want?

How do you regain your credibility once you have lost it?  It is harder than one might think, particularly if you were in the public’s eye as CEO of a standout company.  This is the tough task that the CEO of Theranos has taken on.  She was the toast of the media until stories appeared that claimed her technology for blood testing doesn’t work well, or in some cases, at all.  Since then, she has been under siege.  Her task is to prove her blood testing units do what they are supposed to achieve and at the low price point claimed for them.  This is the only way she can re-establish her vision for her company.  The extravagant claims before the negative publicity set the company up for failure, which is what occurred.  now she needs a humbler approach based on results.  That might be impossible to reach and her multibillion valuation of the company could dissipate instantly.  A CEO in this kind of crisis earns her pay, but then she should not have allowed it to blow up in the first place.  Realistic claims based on facts from the beginning would have served her well.

SAP, the German software company is doing well by doing good.  It is hiring 650 workers suffering from autism to become specialist technicians. It turns out that people with the brain malady are exceedingly logical and attentive to detail.  This is just the kind of worker SAP needs to debug software among other things.  The company wins by taking on a group that hitherto was considered unemployable and by gaining important skill sets.  One suspects that the company also is paying less for an autistic technician than for a software engineer.  If the company’s experiment proves successful, it will set a standard for other software companies to follow and the mentally handicapped will find themselves in demand.  Smart PR is good business.

A restaurateur’s nightmare is poisoning people who eat his food.  Even worse is the inability to find out what caused it.  Add to that a failure of the logistics chain that delivers ingredients to make sure foodstuffs are not contaminated.  All three crises are underway at the restaurant chain, Chipotle.  It can’t get a break.  The poison is E. coli bacteria that somehow has worked its way into its food from the West Coast to the East.  A headache for the chain is its dedication to using fresh, locally sourced, organic ingredients, so it can’t go to one or two suppliers and trace the contamination to its roots.  It is dealing with dozens if not hundreds.  This has compromised the firm’s strategy and marketing appeal.  There is little for the company to do now than to work as quickly as it can to pinpoint the source or sources of the bacteria and to get the restaurants operating again.  Almost certainly, Chipotle will have to modify policies and procedures to prevent future outbreaks and this might compromise its marketing message, but better that than a collapse of the entire business.

Just as liberalization laws are passing to allow people to smoke marijuana, scientific studies are indicating that some types might be harmful to the brain.  They are cannabis crossbred to produce higher levels of THC, the chemical that causes euphoric effects.  However, science is a step behind the law.  There is no clear link yet between THC and mental health. This raises an interesting dilemma.  Are we repeating the history of cigarettes in which science did not catch up with marketing of tobacco for decades, and when it did, it took decades more to reduce smoking.  From a PR perspective, it makes more sense to complete the scientific studies before opening the door further to smoking cannabis.  The public should know what it is getting into rather than manufacturing another health crisis. However, it looks now like society is ready to repeat past mistakes with another crisis in the making.

Consumers fall for illusions regularly.  They know better but the perception that they are getting a good deal, for example, is stronger than the actual value of the offering.  Consider outlet stores.  There is no way they can offer discount prices on excess merchandise from mainline emporiums.  For one, there isn’t that much of it.  Secondly, there are too many discount outlets.  In fact, discounters offer cheaper merchandise whose value is reflected in the price, but shoppers come anyway.  It might be that consumers are not fooled at all by the discount store label and are price-sensitive.  If so, both the retailer and buyer accept the perception that the shopper is getting a good deal when they know they aren’t.  Humans are far from fully rational creatures.

It’s a PR and marketing gaffe to have authorities seize your product because it is deemed unsafe.  But that is what happened in the UK to the makers of hoverboards.  Fifteen thousand were impounded for various electrical and other problems.  That is pretty much all of the inventory for the holiday sales season.  The inevitable question arises.  What were they thinking?  Surely, the manufacturers knew of the safety questions.  Did they plan to overwhelm the authorities and thereby get some through? Did they ignore warnings? Did they stand behind their product as safe and dared the authorities to take action.  Whatever it was, they are in a bind now.  The hoverboard has been effectively excluded from the UK for failing to meet European safety standards.

This is an example of innovative PR that if successful will change the way we travel.  The idea that cars can race by themselves without a driver at speeds approaching 200 mph is revolutionary.  As the article points out, racing will entail passing, strategy and pit stops.  If the vehicles can do all of those things without human intervention, it is a small step to transplanting the technology to the street.  Formula racing already is integrated with sensor technology and engineers gauge hundreds of metrics during competitions.  Replacing the driver is a logical next step but a huge one.  Drivers keep their cars on the edge while circling a track and know where the danger spots are.  A robo-car might not have the same intelligence and could spin out or wreck.  Still, it will be useful and groundbreaking if a field of driverless cars were to line up on a grid and compete.  It will prove that self-driving cars are ready for everyday use.

Sometimes a company must publicly disavow use or abuse of its product.  Here is a case.  SAP, the software company, stated that its software wasn’t the cause of problems that  forced DHL,the German mail and courier company, to take a huge write-off.  SAP supplied its software to a contractor who was tasked with installing it.  The contractor ran into problems and the system has been delayed.  The media had already fingered SAP as a party to the problems, and thus it was forced to clarify its position.  It is an uncomfortable position.  SAP almost certainly wants to remain a supplier to the contractor, but it needs to protect itself against a worse public relations fall-out should the entire project collapse.  There will almost certainly be lawsuits and SAP needs to sidestep those as well.  The best it can do is to divorce itself from a messy situation.

Uber, the much criticized ride-sharing service, has formed a safety board with notable names on it.  The question one asks is whether this is spin or a serious attempt by the company to insure security for passengers.  Uber hasn’t made much of an effort since its founding to play by the rules.  It barges into towns and has squads of lobbyists to fend off complaints.  It seems to believe that it would rather be forgiven than ask for permission.  Thus far, its strategy has worked, but it has built enormous opposition to its tactics.  The safety board looks like a band-aid in light of its past behavior and only time will tell if the company is serious.