Scenario 18-5 An Old Adage States That All Publicity Is Good Publicity

question 51

Multiple Choice

Scenario 18-5
An old adage states that all publicity is good publicity. However, Professors Jonah Berger of the Wharton School, and Alan Sorensen and Scott Rasmussen of Stanford found that there is such a thing as bad publicity. The colleagues studied the relationship between bad publicity and its impact on music albums, books, and movies.In 2010, they published their findings in an article in Marketing Science.After studying cases involving the late Michael Jackson, Russell Crowe, and various authors, the colleagues concluded that negative publicity can increase product sales. Michael Jackson sold more albums after receiving negative media attention, and films starring Russell Crowe received higher rankings following an incident in which he allegedly threw a cell phone at a hotel employee. These high-profile stars actually thrived after receiving substantial amounts of negative publicity. However, in many lower profile cases, negative publicity hurt sales and product reception. The three colleagues conducted an analysis of The New York Times' reviews and book sales and found that negative reviews hurt sales of books by well-established authors, but helped sales of books by relatively unknown authors. After conducting their study, the authors found that conventional wisdom is wrong: not all publicity is good publicity.But they did show that negative publicity can sometimes be positive; it all depends on existing-product awareness.(Ned Smith, "Can Bad Buzz Be Good?" Business News Daily, November 1, 2010)
-(Scenario 18-5) One way to help firms implement a reactive public relations strategy and prepare for possible negative publicity is to

• A)identify any weaknesses in the firm's operations or products that may negatively affect relationships with its constituents.
• B)promote goodwill.
• C)prepare internal communications.
• D)increase corporate advertising efforts.

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A debt or equity security not classified as a held-to-maturity or trading security, which can be sold in the short term for capital gains.

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