Marketing and Business Strategy

Dealing with the Press -4

Use top management. At most companies, top management pays attention to press coverage only when the coverage is negative or when the competition receives a lot of positive coverage. I believe top managers should play a more active role in press relations-and marketing in general.

At most companies, especially small, technology-based companies, the personality and culture of the company can be traced to the management team. As the company grows, and marketing plans proliferate, that corporate personality often fades. Top managers are then the only ones able to communicate the corporate character and ideals. They are the only ones who can offer a simple, unified view of the total corporation.

If you put layers of people between company management and the journalist, the journalist will never get a true sense of what drives the company. If, on the other hand, top managers would meet on a regular basis with journalists, financial analysts, and employees, everyone would benefit. Each group would come away with a better understanding of the other’s positions. There would be less likelihood of misunderstanding and distrust and surprise. It’s a job that no public-relations agency can do without top management’s help.

Putting It All Together
Several years ago, a well-known industrialist told me that all business success is based on two things: building relationships and patience.

Nowhere is this more true than in market positioning. None of the market-positioning activities-using word of mouth, developing the infrastructure, forming strategic relationships, selling to the right customers, dealing with the press-will guarantee success by itself. And none of them will bring success overnight. It takes a long time to establish contacts and build relationships.

But taken together, and given enough time, these elements are almost certain to work. They will bring recognition and credibility to a company and its products. It might take a while, but it’s worth the wait.

Dealing with the Press -3
Develop long-term relationships. Developing good relationships with the press takes time. Press relations is a process not an event. Pressing the media for an immediate article will rarely succeed. Most major business stories take months, even years, to evolve. Companies must be patient.

Companies should view press relations as a continuing investment. It will pay off with time. Once you establish good relationships with the media, you will be able to present new products more effectively. Moreover, you will be able to participate in broader articles about industry trends, and you will become less susceptible to speculative stories. Journalists will seek your side of the story before going to press.

Look beyond products. In new industries, the press typically focuses on products. The stories are generally naive and superficial. Most of the coverage comes from the trade press. But as an industry matures, so does press coverage. Journalists learn, question, dig into the “news behind the news.” The business and general-news media become increasingly interested. Companies must deal with the business and general-news media differently than they deal with the trade press. There should be much less emphasis on product performance and characteristics. Seasoned journalists know a technological advantage is short-lived.

Companies should explain how they fit in the present and future business environments. When products are discussed, they should be placed in a broader context, such as “The Office of the Future” or “The Factory of the Future.” The press is fascinated by glimpses of what lies ahead.

Be honest about bad news. When bad news strikes, it’s not worth fighting the press over it. As a politician once told me: “Never pick a fight with someone who buys his ink by the barrel.” Being honest scores points with the press. In negative situations, a company’s character and style will greatly influence how the press perceives and writes about the company.

It almost never makes sense to hide bad news. It is best to get the bad news out, so it’s over and done with. If you try to hide the news, it will fester and go on forever. Three Mile Island is a classic example. The Nuclear Regulatory Commission withheld information, and public confidence sank lower and lower. On the other hand, Johnson & Johnson was very open with journalists during the Tylenol scare, and Tylenol has since regained its credibility in the market.

Dealing with the Press -2

Get the infrastructure ready. Most journalists practice what I call “he said, you said” journalism. Rather than present their own analysis, they simply quote what other people say. And who is it they quote? Most often, they quote members of the industry infrastructure-financial analysts, consultants, distributors, early customers. The infrastructure serves as a type of filtering mechanism, helping journalists separate fact from fiction.

Companies should take advantage of this filtering mechanism. They should educate and win over members of the infrastructure before going to the press. If a company tries to go to The New York Times or The Wall Street Journal without first developing the infrastructure, it could run into big problems. Reporters will go to members of the infrastructure, and the company might not be happy with what the people in the infrastructure say. Clearly, what people in the infrastructure say about you matters a great deal.

Meet with journalists one on one. Many companies build their press strategies around press releases and press conferences. But these are not the most effective ways to communicate a message. National magazines get thousands of press releases every week. It’s tough to get heard through all the noise. Many press releases are thrown out without being read.

Nor are press conferences very effective. There are two problems. First, journalists are reluctant to ask their best questions at a press conference, because they don’t want to tip off the competition. Second, different parts of the media have different interests. Byte magazine wants to hear about nanoseconds and megaflops. The newsmagazines want the broad trends and social implications. It’s impossible to satisfy everybody. There’s a lot of information, but not much good communication. A press conference is a nice spectacle, but the press loses out-and so does the company.

Instead, companies should meet members of the press individually. A one-on-one meeting takes more time, but it makes more of an impression on the journalist and it delivers the message more efficiently. Messages can be tailored for the audience: one for the trade magazines, another for the business magazines, a third for the general-interest press. Once again, the 90/10 rule applies: 10 percent of the press influences the other 90 percent. So select the most influential members of the press and meet with them.

Educate the media. Press relations should be seen as an education process. Fast-moving industries are becoming more diverse, fragmented, complex, and difficult to understand. At the same time, there is more information available about every facet of every industry. For most journalists, these industries are becoming more and more confusing.

Companies need to help journalists create order out of the chaos, so journalists can present a cogent description of emerging trends and technologies. Rather than simply pitching ideas to the press, public relations people must be willing to spend time and educate the press. Companies should treat journalists as well as they treat their major customers. It’s not enough to hold a new product up to a press conference of 600 people and say: “Here it is.”

Dealing with the Press -1

Successful press relations requires time, planning, and constant reinforcement. It rests with an understanding of how journalists work and how information is communicated. I have put together a set of guidelines that can be useful in developing an effective public-relations strategy :

Understand the journalist’s role. Journalists value their role as independent observers. They resent companies that try to blatantly influence them or co-opt them. They do not want to be viewed as an extension of the company’s promotional efforts. The notion that a story is free advertising is degrading to the journalist and to journalism.

Companies must present information without trying to manipulate. Manipulation can be counterproductive. Litronix, which sold light-emitting diodes in the early 1970s, learned this lesson the hard way. The company saw its sales starting to turn downward, and it decided an article in Business Week would help revive the business. Sure enough, Business Week was interested in an article. But the headline read: “Burnout of a Star.”

Don’t go to the press too early. Obviously, no one wants negative press coverage before a product is even introduced. But positive coverage can be almost as bad. A favorable article while the product is still in development might build expectations that are difficult to meet. If problems crop up and slow the development cycle, as so often happens, the whole world will know.

Synapse Computer ran into this problem. Synapse had impressive credentials. Started by a group of engineers from Data General, the company planned to build “fault-tolerant” computers that would never break down. They had an excellent chance to succeed in the market. But they had the itch to tell the world they were great before they actually were. Even while still working in the back of a candle factory, they began running ads and talking to the press. Expectations rose. Then, Synapse’s computers ran into technical problems at the beta sites. Nothing that abnormal, just typical beta-site problems. But Synapse was very visible now. Journalists were watching Synapse, and they reported on the company’s problems. Synapse’s credibility sank like a rock. Whether or not it solved the technical problems, Synapse faced an uphill struggle.

Don’t “imprint” the wrong image. When a baby chick is born, it looks around for its mother. If the first thing it sees is a human, it assumes the human is its mother, and its mind will never be changed. This process is called “imprinting.” Customers often act the same way. When a startup company introduces its first product, customers will form an image of the company, and that image is very hard to change. In short: You never have a second chance to make a first impression.

3Com, a small company that develops communication networks for computers, managed to avoid this problem by being patient. The company developed the first personal-computer network compatible with Ethernet, the industry standard for larger computers. But 3Com faced a promotion dilemma. Not all pieces of the network were ready at the same time. It wanted to introduce each piece-the software, the controller, the transceiver-as it was ready, so it could start receiving revenues and gain market experience. But the company didn’t want to be perceived as a component company. It wanted to be seen as a full-systems supplier. With our advice, 3Com waited until all pieces were in place, then began communicating its message to analysts and journalists. The strategy worked : The company is now firmly positioned as a systems supplier.

I put this section last because it should come last. Too many companies think press relations come first. They want to make a splash in the press even before they position their products. They think that a good article in Business Week or Fortune or The Wall Street Journal can create their markets and solve their problems. They believe a strong media campaign can make up for deficiencies in product quality, customer relations, and other basic marketing skills.

These ideas are totally backward. Press relations cannot change reality. Press relations do not create what you are; they reflect what you are. Press relations cannot take the place of a broad-based marketing strategy. Companies must first position themselves and establish themselves in the marketplace. Then, and only then, should they worry about getting press coverage.

Now that I have deflated the importance of press relations, I should emphasize the flip side: When handled properly, press relations can be a valuable part of a company’s marketing strategy. Indeed, a company is unlikely to succeed without good press relations. A company can lose in the press and still win in the market in the short term, but that can’t happen in the long term.

Press relations do not have to be all “fluff.” They are serious business. Once a product is positioned, press coverage can help reinforce and broaden the credibility that the product and company have already gained. The press can ease customer fears and make customers feel more secure about new technologies. In new and fast-growing industries, journalists can play the role of evangelists. They can preach the new technology.

Advertising can perform many of the same functions. But press relations is usually more effective and credible. Articles in the media are perceived as more objective than advertisements. If a company can win favorable press coverage, its message is more likely to be absorbed and believed.

Press relations serve a second purpose: They can provide a company with valuable feedback. Communications is a two-way street. Companies can learn a great deal from journalists. Like analysts and other industry observers, journalists serve as a microcosm of the world at large. By talking to the right journalists, a company can learn much about how the world views its products and the company itself. This type of feedback can be invaluable as a company attempts to fine-tune its public image.

If a company has monitored the environment and thought about positioning, it should have no difficulty figuring out what message to deliver to the press. The message should evolve naturally from the positioning process. But it is not always easy to deliver that message in an effective way. Communication seems so simple. Yet, so few companies do it well.

Product positioning is not a one-time operation. It is on going process that never ends. A company president once said: “How can we ever position ourselves in a marketplace that is changing every three months?” He had a good point. Dinamic positioning is a tricky process. The only way to survive in dinamic marketplaces is to keep the positioning process flexible. Companies must be willing to experiment and learn and change. There is no right and no wrong. In fact, the path to success is often filled with failures.

Marketing people like to think they “know” their market. They do analyses of the market, then develop detailed marketing plans as though the outcome is decided deterministically. But in fast-changing industries, companies are often breaking new ground. No one can really “know” the market. The market doesn`t even exist yet. In these industries, almost all new products are experiments. Few leading-edge products are perfectly in tune with the market when they first come out. Instead, they are modified and altered once they meet the market. There`s a lot of give and take.

In some ways, the process is the mirror businesses, companies survey people to find out what they want, then create a product to fill the need. In technology-based industries, the product usually come first. Companies invent things and develop things. Then, they work with the market to see how the product should be used.

From First article about Metaphor product positioning.
Metaphor also targeted its efforts geographically, initially limiting itself to customers in three cities: New York, Chicago, and San Fransisco. The company understood the importance of support and service, and it recognized that it could offer high-quality services only if it limited its geographical reach. Metaphor`s targeting strategies clearly paid off. By late 1984, Metaphor had installed systems at Bank of America, Beatrice, Carnation, and several others company.

Once a company finds the right markets to target, it should keep the same focus as it adds followup products. This advice seems so logical, but many companies ignore it. Company often feel an the urge to expand into new areas where they have little expertise and no established position. Of course, companies must continue to experiment with new ideas. They can not fall into a rut. But they must remember where their positioning strengths lie and take advantage of them.

Digital Research, Inc., is one company that fell into this trap. In the late 1970s, the company became a big success by selling system software for personal computers. Its CP/M operating system emerged as an industry standart and the company`s profit soared.

But Digital Research then expanded into “retail” application software -that is, low-end application software aimed at consumers. The retail software business very different from the expertise were poorlu suited for the new business. Its expansion effort flopped, and the company saw profits drop sharply.