The crisis of needs: reflections concerning the public relations

Posted by Peter Ivanov on March 11, 2009 under Articles/Cases/Analytics/Advices | Read the First Comment

Nowadays, we observe the changing business style which is connected with modification of finance and economics right side. Credit boom has reached to the end. An era of immeasurable consumption is coming to the end. A globalization was hit beneath its dignity. During the last 5 – 10 years those countries developed faster that earned more investments inside. The proportion was quite simple – the more money was brought in the country, faster the economy indicators had grown up. Moreover, its dynamics often defined by fast development of single branches. In case of Ireland it was IT sphere, with Slovak – automobile industry, with Ukraine – finance and real estate on the first place. Although, we should understand that Ukrainian agriculture sector was dying during past few years. As a result of such investment policy those countries become addicted from financial injections directly into single branches. But starting from the end of 2008 there is not money to invest. All the facts mentioned above were influenced the consumer behavior in Ukraine. Big foreign (mostly European) banks had come and offered people good credit conditions for purchasing luxury things – real estate, cars and so on. On the other hand domestic Ukrainian banks did the same in order to compete well. As a result we observed an insurance boom along with galloping development of services. From now on in Ukraine were opened Maseratti, Bentley salons, a lot of fashion boutiques. By the way, during the last few months most of them had gone bankrupt. People freely borrowed big money and often couldn’t figure out how they will return it during 25 years (!). The development of consumer services led to decreasing the unemployment rate because grand supermarkets needed more promoters and consultants in order to sale goods they didn’t possess (were taken as product loans) and was produced abroad. Amazingly, people borrowed money from banks in order to buy goods that had been taken by retail as product loan from producers and distributors! We had borrowed money for purchasing another loan! Earlier described conditions made public relations less mentioned than advertising. Main task of the salesman was to deliver information about the product or service faster and memorably to the eyes and ears. Increased consumers number made the task of marketing specialists easier, although everyone could possess its own even tiny piece of market cake. Future markets situation will force business to find another more sophisticated approaches towards the promotion of its goods and services. This may call changing the requirements to the results of advertising and PR activities. I am not an ad specialist, so I won’t speak for those people. Although, public relations is going to change a lot especially concerning quality of services. Firstly, I should assume that future of PR in Ukraine is in hands of small agencies and internal PR branches. Why so? Simple because during the crisis and post crisis times business success will depend on its flexibility and opportunity to rebuilt quickly. In that case it is much easier to call PR manager at the important meeting from the neighbor room than gather team of external specialists for implementing already made decision. PR specialist has to be in the center of decision-making process. Another important issue is a PR promoting efficiency. Clearly, public relations will not directly increase selling. Speaking about financial sector trust is playing the primary role. Trust – is public opinion. Public opinion is an object PR activity. At the same time, public relations will help business to remain or grow a market share. The more you advertise expensive goods during credit boom the more will grow the number of cheap mass products buyers (an example of Chinese cars in Ukraine). Although, such brands as Jack Daniels and Victoria’s Secret will remain its stable audience. But now, in conditions when the common weal is falling, the number of luxury segment goods judges is decreasing and those brands are still possess great loyalty share of the past clients. They can save target audience only using PR and perpetual reminding about all the best qualities of luxury goods with the help of columns by celebrities in glamorous magazines. An audience of such brands will never cheat on idols. Even students during economic crisis and total lack of money will be collecting money to buy super Logitech gamepad, not cheaper Genius. The brand awareness as well as trust can be built only using PR instruments.