1. (used with a sing. verb) The art or science of establishing and promoting a favorable relationship with the public.

2. (used with a pl. verb) The methods and activities employed to establish and promote a favorable relationship with the public. 3. (used with a sing. or pl. verb) The degree of success obtained in achieving a favorable relationship with the public. Public relations describes the various methods a company uses to disseminate messages about its products, services, or overall image to its customers, employees, stockholders, suppliers, or other interested members of the community. The point of public relations is to make the public think favorably about the company and its offerings. Commonly used tools of public relations include news releases, press conferences, speaking engagements, and community service programs. Read more: http://www.answers.com/topic/publicrelations#ixzz1eVzkZlw3 Goals of Public Relations Some of the main goals of public relations are to create, maintain, and protect the organization's reputation, enhance its prestige, and present a favorable image. Studies have shown that consumers often base their purchase decisions on a company's reputation, so public relations can have a definite impact on sales and revenue. Public relations can be an effective part of a company's overall marketing strategy. In the case of a for-profit company, public relations and marketing should be coordinated to be sure they are working to achieve the same objectives. Another major public relations goal is to create good will for the organization. This involves such functions as employee relations, stockholder and investor relations, media relations, and community relations. Public relations may function to educate certain audiences about many things relevant to the organizationincluding the business in general, new legislation, and how to use a particular productas well as to overcome misconceptions and prejudices. For example, a nonprofit organization may attempt to educate the public regarding a certain point

of view, while trade associations may undertake educational programs regarding particular industries and their products and practices. Steps in a Public Relations Campaign Effective public relations requires a knowledge, based on analysis and understanding, of all the factors that influence public attitudes toward the organization. While a specific public relations project or campaign may be undertaken proactively or reactively (to manage some sort of image crisis), the first basic step in either case involves analysis and research to identify all the relevant factors of the situation. In this first step, the organization gains an understanding of its various constituencies and the key factors that are influencing their perceptions of the organization. In the second step, the organization establishes an overall policy with respect to the campaign. This involves defining goals and desired outcomes, as well as the constraints under which the campaign will operate. It is necessary to establish such policy guidelines in order to evaluate proposed strategies and tactics as well as the overall success of the campaign. In step three, the organization outlines its strategies and tactics. Using its knowledge of the target audiences and its own established policies, the organization develops specific programs to achieve the desired objectives. Finally, step four involves actual communication with the targeted public. The organization then employs specific public relations techniques, such as press conferences or special events, to reach the intended audience. In step five the organization receives feedback from its public. How have they reacted to the public relations campaign? Are there some unexpected developments? In the final step, the organization assesses the program and makes any necessary adjustments. Areas of Public Relations Public relations is a multifaceted activity involving different audiences as well as different types of organizations, all with different goals and

objectives. As a result, there are several specific areas of public relations. PRODUCT PUBLIC RELATIONS. Public relations and marketing work together closely when it comes to promoting a new or existing product or service. Public relations plays an important role in new product introductions by creating awareness, differentiating the product from other similar products, and even changing consumer behavior. Public relations can help introduce new products through staging a variety of special events and handling sensitive situations. For example, when the Prince Matchabelli division of Chesebrough-Pond's USA introduced a new men's cologne, there were twenty-one other men's fragrances being introduced that year. To differentiate its new offering, called Hero, Prince Matchabelli created a National Hero Awards Program honoring authentic male heroes and enlisted the participation of Big Brothers/Big Sisters of America to lend credibility to the program. Similarly, when Coleco introduced its Cabbage Patch Kids dolls, public relations helped increase awareness through licensed tie-in products, trade show exhibits, press parties, and even window displays in Cartier jewelry stores. Public relations is often called on to give existing products and services a boost by creating or renewing visibility. For example, the California Raisins Advisory Board organized a national tour featuring live performances by the California Dancing Raisins to maintain interest in raisins during a summer-long advertising hiatus. The tour generated national and local publicity through media events, advance publicity, trade promotions, and media interviews with performer Ray Charles. Other public relations programs for existing products involve stimulating secondary demandas when Campbell Soup Co. increased overall demand for soup by publishing a recipe bookletor identifying new uses for the product. Public relations can interest the media in familiar products and services in a number of ways, including holding seminars for journalists, staging a special media day, and supplying the media with printed materials ranging from "backgrounders" (in-depth news releases) to booklets and brochures. Changes in existing products offer additional public relations opportunities to focus consumers' attention. An effective public relations campaign can help to properly position a product and overcome negative perceptions on the part of the general public.

EMPLOYEE RELATIONS. Employees are one of the most important audiences a company has, and an ongoing public relations program is necessary to maintain employee good will as well as to uphold the company's image and reputation among its employees. The essence of a good employee relations program is keeping employees informed and providing them with channels of communication to upper levels of management. Bechtel Group, a privately held complex of operating companies, published an annual report for its employees to keep them informed about the company's operations. The company used surveys to determine what information employees considered useful. A range of other communication devices were used, including a monthly tabloid and magazine, a quarterly video magazine, local newsletters, bulletin boards, a call-in telephone service, and "brown bag" lunches where live presentations were made about the company. Suggestion systems are another effective way to improve employee-management communications. Other public relations programs focusing on employees include training them as company public relations representatives; explaining benefits programs to them; offering them educational, volunteer, and citizenship opportunities; and staging special events such as picnics or open houses for them. Other programs can improve performance and increase employee pride and motivation. Public relations can also play a role in recruiting new employees; handling reorganizations, relocations, and mergers; and resolving labor disputes. FINANCIAL RELATIONS. Financial relations involves communicating not only with a company's stockholders, but also with the wider community of financial analysts and potential investors. An effective investor relations plan can increase the value of a company's stock and make it easier to raise additional capital. In some cases special meetings with financial analysts are necessary to overcome adverse publicity, negative perceptions about a company, or investor indifference. Such meetings may take the form of full-day briefings, formal presentations, or luncheon meetings. A tour of a company's facilities may help generate interest among the financial community. Mailings and ongoing communications can help a company achieve visibility among potential investors and financial analysts.

Annual reports and stockholder meetings are the two most important public relations tools for maintaining good investor relations. Some companies hold regional or quarterly meetings in addition to the usual annual meeting. Other companies reach more stockholders by moving the location of their annual meeting from city to city. Annual reports can be complemented by quarterly reports and dividend check inserts. Companies that wish to provide additional communications with stockholders may send them a newsletter or company magazine. Personal letters to new stockholders and a quick response to inquiries insure an additional measure of good will. COMMUNITY RELATIONS. A comprehensive, ongoing community relations program can help virtually any organization achieve visibility as a good community citizen and gain the good will of the community in which it operates. Banks, utilities, radio and television stations, and major retailers are some of the types of organizations most likely to have ongoing programs that might include supporting urban renewal, performing arts programs, social and educational programs, children's programs, community organizations, and construction projects. On a more limited scale, small businesses may achieve community visibility by sponsoring local sports teams or other events. Support may be financial or take the form of employee participation. Organizations have the opportunity to improve good will and demonstrate a commitment to their communities when they open new offices, expand facilities, and open new factories. One company increased community awareness of its presence by converting a vacant building into a permanent meeting place. Another company built its new headquarters in an abandoned high school that it renovated. One of the more sensitive areas of community relations involves plant closings. A well-planned public relations campaign, combined with appropriate actions, can alleviate the tensions that such closings cause. Some elements of such a campaign might include offering special programs to laid-off workers, informing employees directly about proposed closings, and controlling rumors through candid and direct communications to the community and employees. Organizations conduct a variety of special programs to improve community relations, including providing employee volunteers to work on community projects, sponsoring educational and literacy programs,

staging open houses and conducting plant tours, celebrating anniversaries, and mounting special exhibits. Organizations are recognized as good community citizens when they support programs that improve the quality of life in their community, including crime prevention, employment, environmental programs, clean-up and beautification, recycling, and restoration. CRISIS COMMUNICATIONS. Public relations practitioners become heavily involved in crisis communications whenever there is a major accident or natural disaster affecting an organization and its community. Other types of crises involve bankruptcy, product failures, and management wrongdoing. In some cases, crises call for an organization to become involved in helping potential victims; in other cases, the crisis may require rebuilding an organization's image. In any case, experts recommend that business owners prepare a plan in advance to deal with potential crises in an honest and forthright manner. The main objective of such a plan is to provide accurate information quickly in order to reduce uncertainty. After the San Francisco earthquake of 1989, for example, the Bank of America utilized its public relations department to quickly establish communications with customers, the financial community, the media, and offices in 45 countries to assure them the bank was still operating. GOVERNMENT AND POLITICAL RELATIONS. Public relations in the political arena covers a wide range of activities, including staging debates, holding seminars for government leaders, influencing proposed legislation, and testifying before a congressional committee. Political candidates engage in public relations, as do government agencies at the federal, state, and local levels. Trade associations and other types of organizations attempt to block unfavorable legislation and support favorable legislation in a number of ways. The liquor industry in California helped defeat a proposed tax increase by taking charge of the debate early, winning endorsements, recruiting spokespersons, and cultivating grassroots support. A speakers bureau trained some 240 industry volunteers, and key messages were communicated to the public through printed materials and radio and television commercials. PUBLIC RELATIONS IN THE PUBLIC INTEREST.

Organizations attempt to generate good will and position themselves as responsible citizens through a variety of programs conducted in the public interest. Some examples are environmental programs (including water and energy conservation) and antipollution programs. Health and medical programs are sponsored by a wide range of nonprofit organizations, healthcare providers, and other businesses and industries. These range from encouraging other companies to develop AIDS-in-the-workplace policies to the American Cancer Society's Great American Smokeout. Other programs offer political education, leadership and selfimprovement, recreational activities, contests, and safety instruction. CONSUMER EDUCATION. Organizations have undertaken a variety of programs to educate consumers, building good will and helping avoid misunderstandings in the process. Opportunities for educating consumers might include sponsoring television and radio programs, producing manuals and other printed materials, producing materials for classroom use, and releasing the results of surveys. In addition to focusing on specific issues or industries, educational programs may seek to inform consumers about economic matters and business in general. OTHER PUBLIC RELATIONS PROGRAMS. Other types of programs that fall under the umbrella of public relations include corporate identity programs, ranging from name changes and new trademarks to changing a company's overall image. Special events may be held to call attention to an organization and focus the public's good will. These include anniversary celebrations, events related to trade shows, special exhibits, or fairs and festivals. Speakers bureaus and celebrity spokespersons are effective public relations tools for communicating an organization's point of view. Speakers bureaus may be organized by a trade association or an individual company. The face-to-face communication that speakers can deliver is often more effective than messages carried by printed materials, especially when the target audience is small and clearly defined. Public Relations for Small Businesses Like other types of organizations, small businesses can benefit from public relations in terms of their relationships with customers, employees, investors, suppliers, or other interested members of the community. Since small business owners are the most visible

representatives of their own companies, they frequently handle many of the public relations functions themselves. But experts caution small business owners against taking on this responsibility if they are unqualified, or if they are unable to give public relations the attention it deserves. In these cases, entrepreneurs may choose to hire a public relations specialist or contract with an outside agency. In his book Public Relations for the Entrepreneur and the Growing Business, Norman R. Soderberg outlines the main qualifications for public relations professionals. An ideal candidate would be creative and enterprising, possess good communication skills and solid news judgment, have a thorough knowledge of the business, be sincere and considerate in dealing with people, and make a good impression as a representative for the company. Some of the skills required in public relations work include writing and editing, public speaking, graphic arts, public opinion polling, and advertising. The responsibilities of a public relations executive include interpreting public opinion, advising management, generating opportunities to increase public awareness and acceptance, disseminating good publicity, and evaluating the results of campaigns. In order to perform these duties effectively, the public relations professional must know what is going on in the business, which means that he or she requires access to management. "Most companies need to seek outside help from a public relations agency at some point," Chad Kaydo wrote in Sales and Marketing Management. "Even if staff members handle most of your PR efforts, an independent firm can assist with a special project, or give occasional advice." There are a variety of reasons why a small business owner might decide to contract public relations work out to an external agency. For example, company personnel may be inexperienced in handling public relations; the company may be geographically distant from its main audiences; the company may not be able to afford to hire a full-time public relations executive with the needed skills; or the company may want the objective judgment of an outsider. A small business owner can locate reputable public relations firms through the Small Business Administration, the Public Relations Society of America, the trade press for their industry, or the recommendations of fellow business people or local news people. When choosing between several potential agencies, a small business owner should consider those that have experience in the industry, clients in similar industries, financial stability, and a compatible

overall philosophy. Contracting with an outside firm can be costlysome charge their clients a monthly retainer, while others charge straight hourly rates for limited services. While communication is the essence of public relations, an effective public relations campaign is based on action as well as words. Whether it is practiced formally or informally, public relations is an essential function for the survival of any organization. Small business owners cannot afford to neglect public relations. But lavish parties and gifts are not necessaryit is possible to vastly improve a small business's image within its community while also controlling public relations expenditures. Sponsoring a local softball team, speaking at a chamber of commerce meeting, and volunteering at a neighborhood clean-up are among the wide variety of public relations activities readily available to small businesses.

Read more: http://www.answers.com/topic/publicrelations#ixzz1eW0GvvmO

Three years back, Cadbury's found itself in the eye of a storm, when a few instances of worms in its Dairy Milk bars were reported in Maharashtra [ Images ]. In less than two weeks, the company launched a PR campaign for the trade. And three months later, came an ad campaign featuring Big B [ Images ] and a revamped poly-flow packaging. Marketing and communications experts brought together by AICAR and the Subhash Ghoshal Foundation say that Cadbury moved quickly to bear the cost of damage. And thanks to its equity with the consumers, Cadbury's won back consumer confidence, with hit on sales notwithstanding. In October 2003, just a month before Diwali [ Images ], customers in Mumbai [ Images ] complained about finding worms in Cadbury Dairy Milk chocolates. Quick to respond, the Maharashtra Food and Drug

Administration seized the chocolate stocks manufactured at Cadbury's Pune plant. In defense, Cadbury issued a statement that the infestation was not possible at the manufacturing stage and poor storage at the retailers was the most likely cause of the reported case of worms. But the FDA didn't buy that. FDA commisioner, Uttam Khobragade told CNBC-TV18, "It was presumed that worms got into it at the storage level, but then what about the packing - packaging was not proper or airtight, either ways it's a manufacturing defect with unhygienic conditions or improper packaging." That was followed by allegations and counter-allegations between Cadbury and FDA. The heat of negative publicity melted Cadbury's sales by 30 per cent, at a time when it sees a festive spike of 15 per cent. For the first time, Cadbury's advertising went off air for a month and a half after Diwali, following the controversy. Consumers seemed to ignore their chocolate cravings. As a brand under fire, in October itself, Cadbury's launched project 'Vishwas' - a education initiative covering 190,000 retailers in key states. But what the company did in January 2004 is what really helped de-worm the brand. By investing up to Rs 15 crore (Rs 150 million) on imported machinery, Cadbury's revamped the packaging of Dairy Milk. The metallic poly-flow, was costlier by 10-15 per cent, but Cadbury didn't hike the pack price. Bharat Puri, managing director, Cadbury's India [ Images ] says, "While we're talking about a few bars of the 30 million we sell every month - we believe that to be a responsible company, consumers need to have complete faith in roducts. So even if it calls for substantial investment and change, one must not let the consumers confidence erode." Simultaneously, Cadbury's roped in brand ambassador Amitabh Bachchan [ Images ] to do some heavy duty endorsement putting his personal equity on the line for the brand. The company upped ad spends for the Jan-March quarter by over 15 per cent. The recovery began in May 2004, and by June, Cadbury's claimed that consumer confidence was back.

These experts believe that the reason for Cadbury's success was that it took crisis head-on. And the consumers were more forgiving, because the brand enjoyed an emotional equity in India. Santosh Desai, former president, McCann-Erickson says, "The nature of the relationship that Cadbury's has built with the consumer is responsible for latitude the consumers are giving it. "They are seeing it as a lapse, not a breach of trust - this difference is key. What Cadbury's set out to deliver, it goofed up once but it seemed to be very sincere in its intent to get things right." Even so, other experts felt Cadbury's was itself to blame for the worm crisis. Mahnaz Curmally, PR counsel, explains, "Cadbury's had known for a long time that packaging needed change, so in a sense, they waited for something to happen before they made that change and perhaps in hindsight, they could have made that change voluntarily." Cadbury's could be case study of a sweet recovery from a crisis. It continues to lead the Indian chocolate market with over 70 per cent marketshare. However, the experts feel that today's constantly changing environment should keep the company on guard. For more such reports, log on to www.moneycontrol.com Molshree Vaid, Moneycontrol.com

Different Cadbury India's four factories in India churn out close to 8,000 tonnes of chocolate and the company sells a million bars every day. But Bharat Puri, managing director of Cadbury India will never forget the batch of Dairy Milk chocolates numbered 28F311 manufactured last year at the company's plant in Thane, near Mumbai [ Images ]. That was the worm-infested batch that triggered a crisis for the company that had always prided itself on its squeaky clean image. The timing of the controversy couldn't have been worse. Festival season sales (Cadbury sells almost 1,000 tonnes of chocolates during Diwali [ Images ]) plummeted 30 per cent. Until then, in the country's FMCG sector plagued by slow, low single digit topline and bottomline growth, Cadbury was a sweet exception. But its net profit in 2003 dipped 37 per cent to Rs 45.6 crore (Rs 456 million) as compared to a 21 per cent increase the previous year. Now, a year later, Cadbury says that consumers have long forgotten the controversy and are back to their merry chocolate-chomping ways. "Sales are back to the pre-controversy levels. Consumer confidence in the product is back and there has been a steady progression in sales," says Sanjay Purohit, head (marketing) Cadbury India. The company expects to close the year with a high double digit sales growth. According to Purohit, damage contol wasn't easy. Something somewhere had gone wrong but it was important for Cadbury to be seen as a responsible and pro-active company to win back the trust of consumers. It helped that the Maharashtra [ Images ] Food and Drug Administration had given a clean chit to the company's two plants in the state. Cadbury went into overdrive to tell consumers that improper storage of what is essentially a perishable commodity might lead to worm infestation. Last November Bharat Puri, Cadbury's mild-mannered MD, went to media offices around the country meeting reporters, answering mostly hostile queries and patiently explaining the company's stand on the issue.

"Unlike the cola companies which were caught in a controversy just a month earlier and displayed an ostrich-like attitude, Cadbury did not go into denial mode. It accepted that there was a problem, which may not have been of its own making, and made a commitment to the consumer that it would plug all possible safety loopholes," says a Mumbai-based brand consultant. As a result Cadbury improved the packaging and paid more attention to the way its chocolates were stored by nearly 650,000 retailers across the country. In the aftermath of the controversy, the company launched Project Vishwas, a retail education programme under which 190,000 retailers in key states were covered. The programme entailed generating awareness and providing assistance in improving storage quality. "What you see now is the most over-engineered packaging for a Dairy Milk chocolate anywhere in the world. Even our festival packs come with a tamper-proof outer sealing and improved packaging inside," explains Purohit. The new double packaging even for the smallest offering, the 13 gm Rs 5 Cadbury Dairy Milk, had the bar wrapped in aluminium foil and enclosed in a polyflow pack, which was sealed on all sides. The larger Cadbury Dairy Milk packs came in poly-coated aluminium foil, which was heat-sealed and then wrapped in the branded outer package. Both these initiatives are country specific and Cadbury invested nearly Rs 25 crore (Rs 250 million) this year on new machinery for the improved packaging. The company also carried out quality checks at its facilities as well as its carrying and forwarding warehouses and distributor warehouses and found products free of infestation. "Our quality control goes beyond the factory gate to the distributors, but our control over the retail chain does diminish," said Purohit. Besides all the negative publicity, the worms also put paid to Cadbury's plans of becoming a major sourcing hub for British chocolate and beverage giant Cadbury Schweppes.

As part of a global realignment of its supply chain management, finishing touches were being given to a plan that would have seen Cadbury India emerge as a major supplier of chocolates to the Asia-Pacific region and the Middle East. "This controversy, and the adverse publicity it has received in several countries, has set our plans back by several months. The outsourcing model would have resulted in significant revenue generation for Cadbury India," Puri had remarked. Even the parent company, seen globally as a flagbearer of corporate governance, had expressed concern about the problem. To offset the negative impact of the controversy and to re-establish the dominance of Dairy Milk in its category, Cadbury also signed up Bollywood icon Amitabh Bachchan [ Images ] as brand ambassador. With the help of its advertising agency O&M, it created a campaign which aimed for both rational and emotional appeal. One of the ads showed Bachchan visiting a Cadbury plant, inspecting the systems and processes and finally consuming a bar of chocolate to be convinced that there's nothing wrong with the brand. The other ad featured Bachchan and his granddaughter to emphasise that the product was absolutely safe for children. With the new campaign in place, Cadbury stepped up its advertising spend significantly this year to nearly Rs 40 crore (Rs 400 million). With a turnover of Rs 729 crore (Rs 7.29 billion) in 2003, Cadbury has a 70 per cent market share in chocolates and Dairy Milk chocolate has 30 per cent market share, despite competitors like Nestle [ Get Quote ] and Amul. The company bounced back soon after the campaign hit the screens. Between October 2003 and January 2004, Cadbury's value share melted from 73 per cent in to 69.4 per cent. The recovery began in May 2004 when Cadbury's value share went up to 71 per cent. Cadbury's Indian operations are not just the largest in Asia but also the cheapest. In India, Cadbury has the largest market share anywhere in the world and has been the fastest growing FMCG company in the last three years with a compound annual growth rate of 12.5 per cent.

So, despite the bitter moments of the last year, the company is hoping that the future will be much sweeter.

Different 'The worm controversy has pushed our plans back by several months' Q & A/ Bharat Puri Arijit De & Reeba Zachariah / Mumbai October 17, 2003 Cadbury India, the local arm of the British confectionery and beverages giant Cadbury Schweppes, is in the news for all the wrong reasons after the Maharashtra Food and Drugs administration found worms in its products. For the first time in over 50 years in India, its quality is being questioned. In a free-wheeling discussion with Arijit De and Reeba Zachariah, Cadbury India Managing Director Bharat Puri speaks on the controversy, and on what the future holds for Cadbury. Excerpts: What is your view on the issue of worms being found in a sample of Cadbury chocolates by the state Food and Drugs Administration? You must see the entire issue in perspective. We have been in the country for over 50 years and are committed to giving our consumers high quality and safe products. This is the first time such a thing has happened. At all Cadbury plants, every manufacturing process is closely monitored by our technical personnel and a quality assurance team tests the finished goods before they are dispatched for sale. So who are you saying is responsible? After the dispatch of the products from the factory, we have no control over retail conditions. Cadbury chocolates reaches out to over six lakh retailers directly and indirectly. Being a food product, it requires specific care and attention in storage Chocolates are susceptible to infestation if they are stored near grains and

cereals or in unhygienic conditions. We do provide retailers with storage dispensers and visi-coolers to give adequate product protection. We may follow good storage procedures and ask our retailers to follow these procedures, but our retailers or stockists may not. Your parent company, Cadbury Schweppes, is known globally as a flagbearer of corporate governance. What is the reaction at headquarters? What is the importance of the Indian operations in the global scheme of things? India is certainly very important. Indian operations are the largest in Asia, and in no other country does Cadbury enjoy the huge marketshare that it does in India. The parent company is concerned about the entire episode and is in touch with us on the developments. They are helping us come out of the situation. Cadbury India was looking at becoming a global outsourcing hub for Cadbury Schweppes. What sort of an impact will this controversy have on your big plans? This has certainly pushed our plans back by several months now. This development was picked up by the press in several countries and we received adverse publicity. Can you imagine what will happen if we were to start exports from India now? As part of the global realignment of the supply chain management, the plan is to make Cadbury India the major supplier of chocolates to Cadbury Schweppes in the Asia Pacific region and West Asian countries. One of the prime reasons: India is the lowest cost producer in this region. I was in Thailand discussing the outsourcing opportunity from India with other senior Cadbury executives when this controversy broke. It would have resulted in significant revenue generation for Cadbury India. Its now a challenge that the management team here has to overcome. This couldnt have happened at a worse time as this is the beginning of the festive season in India Yes. The next few months are the peak season for us. Our people are undertaking a market research to gauge the impact this controversy has

had on our customers. However, trust me, overall consumers have responded positively and some have also called us saying that they stand by the companys product quality. We have been in India for over 50 years, and the name Cadbury has become generic with chocolates. Lets wait and see what happens in the next few months. So, with outsourcing plans being shelved, festive season sales possibly being hit, and cocoa prices scaling new highs squeezing margins, can we say that the situation really looks grim for Cadbury over the next couple of quarters? You have to look at things in context. All FMCG companies in India have been hit. With a compound annual growth of 12.5 per cent over the last five years, Cadbury India is the fastest growing FMCG company in India today. We are trying to grow the market and hold on to this growth. Margins are certainly under pressure now because of high global cocoa prices. But the good news is that cocoa prices are coming down. Another advantage we have is that 50 per cent of our cocoa requirement is sourced from India. Yes, if cocoa prices do not come down further and quickly, we may have to look at hiking prices. But we are still some time away from such a situation. What are the companys plans on the confectionery business now that the company has got Pfizers confectionery business through a global acquisition? Pfizers confectionery business which has been present through Warner Lambert India, now has its operations integrated with Cadbury India. Through the acquisition, we have acquired well-known brands such as Halls, Clorets and Chiclets. Also, through the Pfizer business we have got critical mass in India. We will be rejuvenating the Halls brand and are working towards it. Then we will relaunch Clorets and later look at Chiclets... theres a lot on our platter now that we have to do.

But your other confectionery brands have not been doing well ... No, we have now withdrawn brands like Gollum and Frutus from the market. We are going low key on Googly as well. Of the other brands, we are concentrating more on Eclairs and Chocki. We are in the process of separating our sales and distribution set up into core business and mass markets. The core business team will look after chocolates and malted drinks, while mass markets would look after the confectionery business. The sales force in the core business would be over 200 and the latter would be 100 employees. What about new product initiatives like Chocki, Delite, vending machines?. There has been a continued thrust in the area of product innovation and an emphasis on the think-global-act-local concept. Our Chocki brand has cornered a 10 per cent share in volume in terms of the chocolate market in just one year. We have introduced Delite, a milk food drink brand, and have recently launched Bites, a snack product. Delite has been able to cross the 1 per cent of the food drinks market. Chocki, the liquid chocolate brand developed in India is now exported to over 10 countries like South Africa, Egypt, Kenya, Sri Lanka and Bangladesh. Brands like Delite and Bites could also be taken to other international markets at some stage. On the hot chocolate vending machines business, we are seeing whether there is critical mass in that category. We have installed over 50 vending machines in Mumbai and Pune. We have got a mixed response from consumers. Hot chocolate is not a substitute either in the afternoon or in the evening. We are still reviewing the business model. In another three months, we may take a decision. Coming back to the worm controversy, what steps is Cadbury taking involving its distribution chain and retail channels?

We have launched a three-step strategic programme involving the distribution chain and retail channels so as to ensure that the product reaching the consumer is of high quality. Called Project Vishwas, the programme entails partnering with retail on a war footing to build awareness amongst retailers about storage requirements for Cadbury products, assistance in improving storage conditions at the retail end and strengthening the packaging of the Cadbury Dairy Milk range. This will be implemented immediately in Maharashtra and will be extended nation-wide thereafter. Over the next two weeks, a team of trained quality control managers along with over 300 sales people will complete a thorough check of over 50,000 outlets across Maharashtra that stock and sell Cadbury products. The teams will conduct visual checks on storage facilities and Cadbury supplied chocolate dispensers, and talk to owners and educate them about the appropriate handling and storage of chocolates. As a precautionary measure, they will also replace questionable stocks immediately, reducing significantly the chances of damaged products reaching the consumer. Also, we will reduce the bulk packaging from 60 bars to 22 bars. Each bulk pack will be shrink-wrapped and this is expected to minimise sale of loose packs to the retail trade.

FUNCTIONS OF PUBLIC RELATIONS DEPARTMENT BASICS OF PR Definitions of PUBLIC RELATIONS:The business of generating goodwill toward an individual, cause, company, or product. The acts of communicating what you are to the public. This is not to be confused with publicity, which is just one of the methods used in communicating the image. Activity, communications, or press coverage that is designed to enhance the prestige or goodwill of a company. Any activities or events that help promote a favorable relationship between a company and its customers and prospects; activities used to influence the press to print stories that promote a favorable image of a company and its products or services. The promotion of a person, company, idea, public body etc. Pictures may be used to assist in this. Communication with various sectors of the public to influence their attitudes and opinions in the interest of promoting a person, product, or idea.

FUNCTIONS OF PUBLIC RELATIONS DEPARTMENT The functions to be performed by a public relations department may vary from organisation toorganisation depending upon the nature and activities of a particular organisation. However,certain standard functions have emerged as common in most balanced departments. They arediscussed below: Policy: Public relations policy is required for every organisation. A policy is a statement of guidelines to be followed in the company. The department has to develop and recommend corporate public relations policies. It has to contribute the public relations view point which helps in the formulation of decision. Its function is not merely to provide the policy mainly to the top management but also to the other sections and divisions. Publicity: Corporate publicity is necessary to interact with the public. The department has to undertake thedevelopment and issuance of announcements of corporate activities to external communicationmedia. It has to handle inquiries from the press. It is a part of the functions of the department todevelop and place promotional and publicity about the company as a whole or any of its units. Product Publicity: Corporate publicity is different from the product publicity. In this, focus is on the products and how to popularize the product. This includes both new products as well as existing ones. It includes the announcement of new products through the editorial channels of the communication

media. The department has to develop and execute the promotional product publicity campaigns. Relations with the Government: Relations with the government cannot be overlooked. In all spheres of activities the governmentinterferes, regulates, controls and supervises. It is necessary to maintain liaison with appropriategovernmental departments. This liaison covers both the local level, state level and national level.Besides, governmental relations include: Report trends in government affecting the company Help in preparing and directing corporate appearances before investigating bodies of legislative hearings. Direct programmes designed to promote the companys point of view in legislative or regulatory matters. Community Relations: Community contacts should be planned. It is the performance and or coordination of corporate good neighbour activities, including compliance with environmental protection standards, fostering equal employment opportunity, cooperating in urban improvement programmes, and developing community understanding of a companys problems and needs. Shareholders relations: Relations with the corporate stock- holders are more important to attract public money. This takes the form of communication between the company and the shareholders in particular and also the investment community in general. It is necessary for the development and acceptance of the company among the investors by broadening the exposure of the companys

policy and financial results in the investment community. This function includes preparation of annual reports, quarterly reports, dividend cheque inserts etc. It has to plan and stage the annual meetings of stockholders and appearances before meetings of security analysis. Promotion Programmes: Public relations promotion programmes should be formulated and implemented. This may broadly cover institutional advertising, public relations literature and special events. Donations: A corporate donation policy should be developed for company contributions. Various aspects involved in this function are processing requests for donations, administering companys foundation, and the conduct of employees solicitations for approved drives. Employee Publications: The public relations department has to prepare and publish employee magazines, newspapers, bulletins, management communication etc Guest relations: The department must undertake guest reception activities. Coordinating activities. Conveying and Interpretation. Advisory function. Instructing by doing. Public relations education programme.

SCOPE OF PUBLIC RELATIONS There has been misconceived opinion about the scope or field of public relations activities. Inlectures and articles published one is apt to gain the impression that public relations concernindustry and commerce only. In such an instance it can only be said that one tends to overlookthe fact that public relations, particularly in this decade, has entered all sectors of public life, notexcluding religion, and that it how has a virtually unlimited field of application. The followingexamples demonstrate the wide field of public relations activities in industry and commerce. In our market economy there are information gaps which cannot be filled by the interaction of supply and demand via prices, costs or wages. This is when public relations activity steps in. It provides information on Planning technical andorganizational developments, inventions and their potential utilization, or it issues at regularintervals company reports which provide a deeper insight into the structure of the corporationthan the public can otherwise obtain. The relations activity is becoming increasingly necessary for the procurement of economicallyessential production factors. It makes it easier for corporations to tap the money-market or tofinance their projects by issuing bonds or shares. It can also help them to find new personnelwhen necessary, and thus level out personnel fluctuation without reducing the desired workingmobility. Finally it is easier for a corporation to acquire land from a community if thecorporation cultivates public relations and endeavors to bring its own interests in harmony withthose of the community. Public relations activity may support marketing. In its various forms it may contribute decisivelyto successful frictionless business activity. The principles of reciprocity underlying publicrelations is for the corporation an

incentive to improve performance, because it helps theCorporation to overcome a difficult situation. Today the public relations profession has enteredeven in to the fields of hospitality, tourism, institutes, in education and to a variety of others.

25 THECADBURY S WORM CONTROVERSY RISE OF THE CONTROVERSY State FDA Commissioner UttamKhobragade said a group of people approached him withchocolates that had worms in them. Sebastian Fernandez had purchased Cadbury Dairy Milkchocolate from a shop at Pick and Pay, Vile Parle. Fernandes discovered that the chocolate(Batch No 28F3I10703) had worms in it. Fernandes complained to the shopkeeper Jitendra Shah who later informed Pravin Marve, vice-president, Andheri Vyapar Manch. Marve then contacted the FDA and gave them the sample.FDA Joint Commissioner Hindurao Salunkhe said Cadbury's Talegaon plant will also be inspected. Bharat Puri, managing director of Cadbury India will never forget the batch of Dairy Milkchocolates numbered 28F311 manufactured last year at the company's plant in Thane, nearMumbai. That was the worm-infested batch that triggered a crisis for the company that had always prided itself on its squeaky clean image

31 The other ad featured Bachhan and his granddaughter to emphasize that the product was absolutely safe for children. Cadbury stepped up its advertising spend significantly that year to nearly Rs 40 crore (Rs 400million). With a turnover of Rs 729 crore (Rs 7.29 billion) in 2003, Cadbury has a 70 per centmarket share in chocolates and Dairy Milk chocolate has 30 per cent market share, despitecompetitors like Nestle and Amul.

32 BENEFITS OF A GOOD PR CAMPAIGN - CADBURYS SINGING SWEETLY AGAIN Cadburys reiterated that all through the 55 years of leadership in India, that it hasr emained synonymous with chocolates and have remained committed to high quality and consumer satisfaction." All is well that ends well. And for Cadburys India, nothing can be sweeter than regaining back the Consumer Confidence. Thanks to quick action taken to recoverthe damage done by the worm controversy like Operaion Vishwas, adopting newpackaging, massive advertising with Mr. Amitabh Bachchan as their brand ambassadorand company's managing director Bharat Puri PR skills in terms of handling of the mediaand press, attending consumer grievances on a personal, level cool headedness & down toearth attitude resulted in Cadburys regained its market share. The survey conducted by the company says that consumers have long forgotten the controversyand are back to their merry chocolate-chomping ways. Sales were back to the pre-controversylevels. Consumer confidence in the product was back and there was a steady progression in sales.The company bounced back soon after the campaign hit the screens. Between October 2003 andJanuary 2004, Cadbury's value share melted from 73 per cent in to 69.4 per cent. The recoverybegan in May 2004 when Cadbury's value share went up to 71 per cent. The company posted ahigh double digit sales growth in that year end. Cadbury's Indian operations are not just the largest in Asia but also the cheapest. In India,Cadbury has the largest market share anywhere in the world and has been the fastest growingFMCG Company in the those last three years with a compound annual growth rate of 12.5 per cent. So, despite the bitter moments of the that year, the company did surpirisingly well in the succeeding year.

33 PRIMARY MARKET RESEARCH AND ANALYSIS A primary market research was conducted on 6th November 2009 at a local Mom and Pop Kirana/ Pan Bidi and Sweets Store in Mumbai with a respondent size of 30 people across variousdemographic and age profile. The 30 respondents who purchased Chocolates / Cadbury / Bars /Candyfrom that outlet were divided into 2 groups. Group 1. 15 of the customers who purchased Cadbury product and Group 2. The other 15 who purchased non Cadbury products like Nestle and Amul Chocolates / Bars / Candy Each of the 30 respondents were asked a single question and their response was noted down. Question asked to the Group 1 Q. Do you remember the Cadbury Worm Issue that took place few years back while purchasing or consuming Cadbury? Ans. Yes or No. All the 15 respondents replied No. Question asked to the Group 2 Q. Is it that you are still skeptical of Worms can be present in Cadbury as happened few years back and thats the reason you are not buying Cadbury product? Ans. Yes or No. All the 15 respondents replied No. Thus a clear cut conclusion can be drawn that consumers have long forgotten the Cadburys Worm Incident and that Incident has no influence in whatsoever form in the buying behavior of consumers

Worms In The Mix ....

Picture this: a quiet night at home, a nice meal, a beautiful glass of wine, some DVD's haphazardly sprawled near the television. Just as Bruce Willis is about to blow up the world there's movement in my periphery. Something is crawling. Something is crawling on me! I look down at the half eaten square of chocolate and a worm is crawling out of its little hidey hole and over my hand. It pauses on its way to turn and look at me and it screeches in its tiny voice "DIE human". I throw the block across the room knocking over my rather nice pinot gris, and then I jump up and down shaking and patting myself as though I had just eaten three squares of chocolate filled with worms...which I had. That's a tad dramatic, but it's what happened...except that the worm never spoke, and I never jumped up and down. I calmly walked into the kitchen to have a better look. I had actually eaten three squares before I even noticed. The reason being that I'm one of those annoying people that only peels back enough foil as required. And it's not as if you cautiously check a block of chocolate because it might have worms! The product was well within its useby, and I can tell you that I purchased it from Coles, that afternoon, and opened it that evening. Coles, by the way, responded to all this in a very positive manner. Their customer service was excellent. There was no marks or signs of entry on the box or the foil. I know this too because I pulled the whole thing out so I could unwrap the foil carefully. Wherever those worms came from, they came from within. Either a moth or some other creature had landed on the block prior to packaging, and had innocently laid their mothy eggs, or their eggs were in

a nut or something, or perhaps it was part of an evil conspiracy to take over the world by an alien species that had a penchant for utilising multinational corporations that have royally pissed off their customer base! Let's set aside the conspiracy theories for the moment and focus on what the real problems are. I'm not really perturbed by the fact that a block of chocolate became infested with both larvae, it's happened before as you'll find out. What really bothered me was the apparent lack of care that Cadbury's displayed when I did them a favour and reported the incident. They told me "Oh it happens all the time" and they would send me out a pamphlet explaining the hows and why's. They offered to replace the block. They made no offer of a refund.They made no attempt at an apology. That's right. The words "we're sorry" never even entered the conversation. As it stands I have not heard back from them, nor have I received any pamphlet nor a replacement of the product I purchased. Now if I was running a business, particularly one in the food and hospitality industry, an industry in which it is critical to maintain proper health and safety standards at ALL times, and a customer came up to me and said "I'm sorry to inform you, but I found a worm in my soup" I am NOT going to tell them to be quiet other wise everyone will want one...am I? No. If I am responsible and care about my customers at the very least I would apologize and do my utmost to restore that customers faith in the product. Is this what Cadbury did with me? No. Did they apologise over a lapse in their lack of manufacturing standards. No. Did they apologise over what may probably be a freak occurrence, offering me my money back. No. Did they make any attempt to ensure that their customer would forget that they ate worms and would purchase their product again. No. Does this sound like a company that cares about its consumer base? No.

I really don't care whether or not I get a replacement block of chocolate...I wanted someone to take some goddamn ownership of the problem and tell me that they were sorry, that they would investigate the issue, that every attempt would be made to ensure that it didn't happen again. I don't think what I wanted was asking too much. However it is not surprising that I didn't get what I wanted, especially when you take into account all the other dodgy things Cadbury have done recently. Firstly: the great WORM incident of October 2003. That's right...this is not new. Cadbury in India experienced an infestation of worms within their range of products, so much so that the FDA had to step in. If you Google "Cadbury worms" you will find a whole host of information. It seems that back in 2003, after the FDA stepped in, and after their sales percentages fell massively, the incident was handled quickly and the response from Cadbury was attentive and on track. But give them credit...they responded, somewhat tardily, and re-gained consumer confidence...or so it would seem. Links for more. But not here. Not in this case. Their response was lacklustre and superfluous. It neither addressed my concerns nor gave me any confidence that the incident was in hand. It did not make me want to be a return customer. The fact that this didn't seem to bother them was even more disturbing...but again not surprising. Secondly: The great recipe change. Cadbury, on a winner for years with their recipe for milk chocolate, gets the bright idea to change it without correctly doing their market research, ultimately pissing off so many of their customers they were forced to revert back to their old recipe from fear of losing too much revenue. Links for more. Thirdly: Cadbury reduces the amount, but keeps the cost the same. This company just doesn't get it! It obviously thinks you're an idiot because a) why would you pay the same amount for significantly less

and b) why would Cadbury think you wouldn't notice that this is an act that treats you with contempt? Links for more. Look at how Cadbury's addresses this change, taken from the FAQ on the Cadbury website: "New size chocolate squares Upon opening the new-look pack, you will see a more contemporary design chocolate square size. The new shape is designed to more evenly spread the taste of chocolate throughout your mouth. In contrast, the smaller squares from the former block tended to concentrate the delivery of chocolate to a smaller area of the mouth. In addition, the wider, flatter shape makes the chocolate easier to break with fewer crumbs." "Fewer crumbs" !!! Isn't the whole point of chocolate an indulgence? So who gives a WORMS arse about crumbs! The worms certainly don't...look at all the pooey crumbs they've made even with the "wider, flatter" shape. Cadbury's is obviously implying that we are messy, clumsy and offish, unable to eat correctly or clean ourselves. It seeks to address this by reducing the volume of the block of chocolate yet charge us the same amount. Or perhaps they reduced the block in order to make room for the WORMS they keep trying to feed us. Either way...it's not on. I guess we could continue to a fourth reason - that being the deadly Melamine call back, again illustrating continuing problems with Cadbury's manufacturing standards - but three consumer complaints, for now, is enough.

Given all these antics, the hand waving that went on in India where they tried to offload the blame onto retailer's storage rather than admitting they were at fault, before the FDA kicked them into gear... the change in recipe that they insisted was not financially motivated, that based on research the consumer preferred Palm Oil, then back flipping due to the number of complaints, proving that the consumer didn't prefer Palm Oil, that their research was poorly conducted, manufactured, or simply wrong....and then the resizing of the good-old-block of chocolate while maintaining the same price, claiming that smaller quantities are better for you and that it was based not on financial reasons, but on less crumbs...what other conclusion can one make other than Cadbury is taking the piss out of the consumer. If you ask me, it looks like they've been feeding us worms for years. They don't care about you the consumer, if they did they would have responded more adequately when I informed them of their new flavour. They wouldn't have tried to rip you off twice by downsizing and using cheaper manufacturing materials. They wouldn't have tried to make your granny cry on her eighty second birthday. Does this sound like someone that's worth your business? The only satisfactory response that I have had out of all this was from the Coles store manager. I went to Coles and reported what had happened and the first thing I got was an apology! Halle-fucking-lujah. At least someone was doing the right thing. The manager actually apologised, took my details, informed me that he would talk to the Cadbury representative on their next return and in the meantime he would check/recall the remaining stock. He even offered me a refund. I declined the refund and thanked him instead for his good customer service. It made all the difference. It's what I should have got from Cadbury.

So to summarize: Cadbury Sux! because they like to make people eat worms in a thinly veiled attempt to further belittle their customer base or perhaps supplant a new dominate species on earth in order to take over the world. That or make all the grannies and small children in the world cry. Given everything we have seen here, I suggest you consider your next purchase of chocolate very carefully...unless of course you want to be played for a sucker...or make your granny eat worms! You don't hate your granny....do you?