2003:137 SHU BACHELOR’S THESIS Product Placement as Communication Tool: Role of the Public Relations Firms A Case Study of Hedberg & Co NIKLAS BERGLUND ERIK SPETS Social Science and Business Administration Programmes INTERNATIONAL BUSINESS AND ECONOMICS PROGRAMME Department of Business Administration and Social Sciences Division of Industrial Marketing Supervisor: Manucher Farhang 2003:137 SHU • ISSN: 1404 – 5508 • ISRN: LTU - SHU - EX - - 03/137 - - SE Acknowledgements We would first of all like to thank our supervisor Mr. Manucher Farhang who has given us guidance along the way. Especially with matters that are specific in writing an academic thesis. We also give our compliments to our respondent Susanne Arkrot at Hedberg & Co, who not only answered our questions, but also explained product placement in a way that is not possible to read in any article or book. Finally, we would also like to thank our supportive families and friends for always being there. Luleå 6th of June, 2003 Niklas Berglund Erik Spets Abstract The world of advertising is becoming more and more competitive, and to get messages through to the intended target audience it is important to try different means of communication. The purpose of this thesis is to gain a better understanding of an alternative mean of communicating messages, namely product placement, and especially public relations firms’ role in this process. The thesis describes issues influencing public relations firms’ recommendation on product placement to clients and also the selection of media to place products in. A case study was conducted at Hedberg & Co, using a qualitative research method. The study shows that product placement is inexpensive compared to traditional means of advertising. Consumers also view product placement with acceptance, mostly because the benefit of product placement is that products or brands is shown in the right context. Sammanfattning Konkurrensen i reklamvärlden blir allt tuffare, och för att få meddelanden fram till den tänkta målgruppen så är det viktigt att prova nya sätt att kommunicera sitt budskap. Syftet med denna uppsats är att försöka förstå ett av dessa alternativa sätt att kommunicera, nämligen produktplacering, och framförallt rollen ett public relations företag spelar i denna process. Uppsatsen beskriver faktorer som public relations företag ser som argument att rekommendera produktplacering till kunder, och dessutom hur de väljer i vilka media de skall placera produkter. En kvalitativ fallstudie av Hedberg & Co genomfördes. Resultatet av studien visar på viktiga faktorer som gör att produktplacering rekommenderas till kunder. Först och främst är det ett kostnadseffektivt sätt att kommunicera ett varumärke eller en produkt, och sedan finns det en ytterligare faktor som är viktig, och det är att produkter kan visas i sitt rätta sammanhang. Produktplacering är ännu så länge även, ett bland konsumenter allmänt accepterat sätt att kommunicera en produkt. TABLE OF CONTENTS 1. INTRODUCTION ................................................................................. 1 1.1 BACKGROUND....................................................................................................................1 1.2 PROBLEM DISCUSSION ......................................................................................................2 1.3 RESEARCH PURPOSE..........................................................................................................3 1.4 RESEARCH QUESTIONS......................................................................................................3 1.5 LIMITATIONS OF THE STUDY.............................................................................................3 2. LITERATURE REVIEW...................................................................... 4 2.1 ISSUES INFLUENCING PUBLIC RELATIONS FIRMS ´ RECOMMENDATION ON PRODUCT PLACEMENT ................................................................................................................................4 2.1.1 BALASUBRAMANIAN’S HYBRID MESSAGE MODEL.................................................................4 2.1.2 CREATING DESIRED BRAND AWARENESS.............................................................................5 2.1.3 COMMUNICATION .............................................................................................................6 2.1.4 PRODUCT PLACEMENT AS A PROMOTION TOOL ..................................................................7 2.2 MEDIA SELECTION............................................................................................................9 2.2.1 SELECTING THE TARGET AUDIENCE ...................................................................................9 2.2.2 SPECIFYING MEDIA OBJECTIVES ......................................................................................10 2.2.3 SELECTING MEDIA CATEGORIES/VEHICLES.......................................................................11 2.2.3.1 Television..................................................................................................................11 2.2.3.2 Magazines..................................................................................................................12 2.2.3.4 Newspapers................................................................................................................12 2.2.3.5 Radio..........................................................................................................................12 2.2.3.6 Cinema.......................................................................................................................12 2.3 A CONCEPTUAL FRAMEWORK........................................................................................12 2.3.1 ISSUES INFLUENCING PUBLIC RELATIONS FIRMS’ RECOMMENDATION ON PRODUCT PLACEMENT....................................................................................................................13 2.3.2 MEDIA SELECTION USED BY PUBLIC RELATIONS FIRMS WHEN PLACING PRODUCTS .............13 3. METHODOLOGY.............................................................................. 15 3.1 RESEARCH PURPOSE........................................................................................................15 3.2 RESEARCH APPROACH....................................................................................................15 3.2.1 DEDUCTIVE VERSUS INDUCTIVE RESEARCH.....................................................................16 3.2.2 QUALITATIVE VERSUS QUANTITATIVE RESEARCH .............................................................16 3.3 RESEARCH STRATEGY.....................................................................................................16 3.4 DATA COLLECTION METHOD ..........................................................................................18 3.5 SAMPLE SELECTION ........................................................................................................19 3.6 DATA ANALYSIS ...............................................................................................................19 3.7 RELIABILITY AND VALIDITY...........................................................................................20 4. EMPIRICAL DATA............................................................................ 21 4.1 COMPANY BACKGROUND ................................................................................................21 4.2 PRODUCT PLACEMENT....................................................................................................22 4.3 MEDIA SELECTION ..........................................................................................................24 5. DATA ANALYSIS............................................................................... 26 5.1 MAIN ISSUES INFLUENCING PUBLIC RELATIONS FIRMS ’ PRODUCT PLACEMENT...........26 5.2 MEDIA SELECTION USED BY PUBLIC RELATIONS FIRMS WHEN PLACING PRODUCTS....27 6. CONCLUSIONS AND IMPLICATIONS ........................................... 28 6.1 HOW CAN THE ISSUES INFLUENCING PUBLIC RELATIONS FIRMS ’ RECOMMENDATION TO CLIENTS ON PRODUCT PLACEMENT BE DESCRIBED?......................................................28 6.2 HOW CAN THE MEDIA SELECTION USED BY PUBLIC RELATIONS FIRMS WHEN PLACING PRODUCTS FOR CLIENTS BE DESCRIBED? .......................................................................29 6.3 IMPLICATIONS FOR MANAGEMENT.................................................................................30 6.4 IMPLICATIONS FOR THEORY...........................................................................................30 6.5 IMPLICATIONS FOR FUTURE RESEARCH.........................................................................30 LIST OF REFERENCES........................................................................... 32 APPENDIX…………................………………………………………………… APPENDIX - INTERVIEW GUIDE…………………………………………………………. LIST OF FIGURES Figure 2.1: Hybrid Messages Creatively Combine Advertising and Publicity Concepts 5 Figure 2.2: Communicating brand identity 6 Figure 2.3: The Communication model 7 Figure 2.4: A Three-Dimensional Construct of Product Placement 8 Figure 2.5: Conceptual frame of reference 14 LIST OF TABLES Table 3.1 Relevant Situations for Different Research Strategies 17 Table 3.2 Six Sources of Evidence: Strengths and Weaknesses 18 1. Introduction In this opening chapter, we will first present a background of the marketing environment facing organizations today, which stresses the fact