CC BY
52
Section 19. Economics and Management
Svets Anastasiia Valeryivna, student, 3rd of 4-year bachelors program, the Faculty of Economics National University of Kyiv-Mohyla Academy, E-mail: [email protected]
HOW FRANCHISING MODEL AFFECTS PUBLIC RELATIONS AND IMAGE OF THE COMPANY'S BRAND UPON THE EXAMPLE OF TUI UKRAINE
Abstract: In the contemporary world of confrontation, the issues correlated with public relations and image of brand became vividly significant, especially when considering large franchisee companies. Undoubtedly, it is essential to establish common standards and control them. In this article, the problem of communication between tourist agency TUI Ukraine and customers are considered by the author. The purpose of this article is to research the messages customers get and process. The results of the research are presented in the graphs and charts.
Keywords: Franchising, Franchising model, Public Relations, Image, Brand.
Introduction First, the term franchising comes from Anglo-French
Many modern businesses have devoted themselves to the franc, which means free [1; 2]. According to European Code
topic of studying and analysing the functioning of the market in the form of franchising and creating the best conditions for the successful development of the franchise system. Many enterprising people in the field would like to become owners of their own business, but most of this is just beyond its power. That is why franchising is becoming so attractive; it is a way of developing a company that allows to successfully engage in entrepreneurial activity with minimum, in general, risk, to achieve financial solvency. Indeed, it is important to estimate not only the goods and services franchise system provides, but also an image of the brand and the public relations management.
The subject of this specific article is to present the results of the research, which was completed to discover the specificity of the public relations and image of the franchise companies. The purpose of the research was chosen to estimate the advancing company's public relations and image brand upon the example of the tourist agency TUI Ukraine.
Literature Review
Key Terms. Undoubtedly, with the start of the specified article, it is required to interpret the principal terms that will state in the paper. This point is required to hold a broad understanding of the material and progressively deepen the knowledge of the field. Consequently, it is essential to provide definitions for the following terms: a) franchising; b) franchisor; c) franchisee; d) franchise; e) trademark; f) marketing mix; g) public relations.
of Ethics for Franchising, franchising is a system of marketing goods, services and/or technology, which is running between the franchisor and its franchisees.[l, p. 4] According to the Business Dictionary, the franchisor controls the entire organisation, trademarks, and goods, but provides the advantage to the franchisee to operate the franchise location, in return for an accepted before fee [2].
Second, franchiser proposes and retails franchise opportunities to prospective franchisees. A franchisor offers and trades rights; next, a franchisee is granted the power and responsibility to establish a franchised position applying the franchisor's methods and trademark. A franchisee, through a franchise agreement, is granted the right and obligation to establish and manage a franchised location. Franchisees typically return franchisors an upfront payment and continuous royalty charges. Frequently, the franchisor is an entrepreneur who has founded a prosperous and instituted business. They realise the following worthy assets to the partnership: a proven business model; a known trademark; established business systems; education and assistance [3]. Besides, a franchisee's purpose is to multiply the franchisor's prosperous business model to support it develop into local or national markets. This is not an insignificant part and, accordingly, expects relevant investment and work, including paying franchise and management of franchise issues [3]. Concluding, franchise,
franchisor and franchisee together are all the parts of the franchise system [4, p. 3].
Further through, the International Franchising Association defines "Trademark", which is "the marks, brand name, and logo that identifies a franchisor which is licensed to the franchisee" [5].
Additionally, the marketing mix is the set of marketing tools that business uses to pursue its marketing purposes in the target market (consist of product, price, place, and promotion) [6, P. 9-10].
Finally, according to Rex F. Harlow, public relations (PR) is a unique management function that: a) aids to establish and communicate strong communication, understanding, interaction and cooperation between the organisation and the associated society; b) includes problem management; c) provides information to the management on the mood in the Public Opinion and helps him to respond sensitively to these sentiments; d) determines and emphasizes the duty of management to serve the interests of the Company; e) helps management to keep abreast of changes and it is possible to make better use of these changes, the role of a kind of early warning system that helps to predict trends; f) is used for the study of intelligent and moral communication. Precisely, while defining PR, it is essential to highlight, that marketing and PR technologies in organisations have many familiar facets. However, it is fallaciously to consider PR and marketing as a nonindividual science, through the dissimilarity of the aims and functions of sciences, target audiences, methods [7, P. 231-329].
Franchising and Public Relations. If we consider franchise activity as the part of the franchisor, then for him his franchise system is a channel for the sale of services or goods, which is, affecting marketing [8]. Moreover, if the business provides a structured marketing system, public relations are involved in the before-mentioned system as well.
Franchising is a partnership, which is provided to develop the brand effectively. Due to the broad distribution of businesses of one franchise system and the usage of common standards by all locations, the brand's image is explored by many consumers. A considerable number of customers are familiarised regarding particular advantages and services, as a consequence of which the supply is becoming popular. Similarly to traditional business, franchising uses a complex of marketing communications and public relation management, explicitly including adaptations to its specified system. That is the decision on which advertising to run and by what means to stimulate commerce refers to the franchisor. This decision then applies to all franchisees of the right holder, throughout his franchise system, whereas individual sales and direct marketing are the responsibility of the franchisee and his staff [9, Ch. 1.3].
Frequently, franchising is defined equally as a system to promote and trade a product or service, a method of advancing a business and its image. Generally, franchising is a system of marketing and distribution, in which an independent entrepreneur for a fee receives the right to distribute goods or provide services to the other party by the established standards and practices of the franchisor, and with his help. Undoubtedly, the franchisee will handle and develop franchisor's brand and support their public relations. The success of branding is frequently predetermined by the measurement of its theoretical elaboration. Of paramount importance, in this case, is the advancement of technology for managing brand relations with consumers in conjunction with the study of the relationships of partners in the process of organising business and forming their relationships. This issue allows overcoming economic problems correlated with the development and organisation of branding, and in particular, with the franchise form of brand use [10].
Thus, applying the features of the franchise market, both franchisee and franchisor can achieve marketing goals, that is, creating a positive brand image and increasing sales. However, it is possible only among the collaboration of both partners, their honest relations and shared goals.
Research
The object of this research paper is tourist agency TUI Ukraine, which is a part of TUI Group [11]. The purpose was chosen to estimate the advancing company's public relations and image brand. As a part of TUI Group, TUI Ukraine share mission, vision, culture, and aims of the parent company [11].
The company appeals to their primary values, which are: a) the primary values of the brand: "Reliable, responsible, inspiring"; b) the motto of TUI: "You deserve rest, and we the trust of the whole world."; c) the primary goal of the brand is to be client-oriented [12].
In this paper, to estimate the impact of franchise model on the customers the branding features are researched. In the case of cooperation, the franchisee receives: a) the right to use the trademark in all communications; b) package of documents and brand book; c) branding of the agency; d) uniform; e) training and work with personnel; f) participation in the bonus programs of the tour operator; g) advertising souvenir production; h) a corporate website with direct agency contacts; i) marketing services; g) legal services [12] Specifically, the potential franchisee should consider strict requirements of office style and educational system.
Taking everything mentioned above into account, we can conclude that TUI is exceptionally open to the franchise partnership and strongly supports new players on the market, which are interested in long-term cooperation. This is what makes a brand image and strong public relations.
Results
To estimate the effectiveness of the branding of TUI Ukraine a survey was completed. The audience was chosen as millenniums (126 respondents, 93.83% of which are under 25 years old; 82.54% woman, 17.46% men), as far as they primarily interact with advertising and openly communicate with brands. In the survey firstly respondents were asked to recognise TUI Ukraine by name only, then by TUI Ukraine's logo. The answers are divided into two groups: Group A, those who recognised TUI Ukraine by the name, and Group B, those who recognised by logo only. Details of the questionnaire (questions, statistics of
all respondents' answers and their analysis) are presented in the graphs below.
As mentioned before, the respondents firstly were asked to recognise the travel agencies by name only within a list of TOP agencies on the Ukrainian market. The results are presented in the chart 1, as can be observed, the following can be concluded: 68.25% of respondents recognise "Annex Tour" agency from the name, 64.29% recognise "Join up!", only 5.56% recognise "Travel Professional Group," 64.29% recognise "Coral Travel," 53.97% recognise "TUI Ukraine," and 12.70% do not know any agency and nearly 8% of respondents mentioned other agencies.
Figure 1.
Statistic of answers (both groups) "What travel agencies do you know?",%
Additionally, as far as only 53.97% recognise TUI Ukraine from the name, it was essential to study the brand's reputation. Therefore, in the questionnaire, there was a question, including the logo of TUI Ukraine. Besides, only 14 respondents did not recognise TUI Ukraine's logo. Thus, to be objective, further results of the questionnaire should be divided into two groups: the answers of respondents who recognise TUI Ukraine by the name (group A) and the one who remembers TUI Ukraine by its logo only (group B). This issue is necessary to do to see how valuable for the franchisee is the cooperation with TUI Ukraine and whether it is reasonable and profitable to work with an agency.
Mostly, there is a significant difference between respondents' answers. When 21.43% of Group B do not know any agency, nearly twice less (12.70%) of Group B gave the same answer. This argument vividly embodies the idea of the importance of powerfulness of TUI Ukraine's brand and public relations management, as far as nearly twice more respondents think that they do not know any agency, yet in fact, they do remember their logo, while giving advance to the brand.
The next important issue to analyse is the willingness of potential customers to use the services of the given agency (TUI Ukraine). Specifically, the question was "Would you use the services of this agency (TUI Ukraine)." Again, to have representative answers, the results of this question will be divided into two groups: group A (chart 2) and group B (chart 3).
Figure 2.
Statistic of answers (group A): "Would you use the ser- Precisely, it should be mentioned that 47.62% of those
vices of this agency?",% respondents who recognise TUI Ukraine by the name would
Statistic of answers (group B): "Would you use the ser- rather be the clients of the agency, 34.13% would not, and vices of this agency?",% 18.25% do not know yet. Additionally, the answers of respon-
dents who recognise TUI Ukraine by its logo only are nearly parallel to the responses of the first group. 42% of respondents
Conclusion
Based on the statistic given above, we can conclude that the answers of respondents who recognise TUI Ukraine by the name and the one who remember TUI Ukraine by its logo only strongly correlate. Therefore, we can conclude, that the reputation of the company is stable and well know, no matter does the potential customer see the logo or not. Therefore, based on the argument explored above, we can conclude that franchisors image and public relation management is sharp, and, consequently, for the franchisee, it is valuable and profitable to work under the TUI Ukraine's logo.
answered "Yes," 37% answered "No" and 20.93% determined that they do not know yet.
■ Yes No
I do not know
According to the information presented above, now we can conclude that TUI Ukraine's franchise in benefit and effective. Based on the information stated above, we can assume that company works on its brand, profit, and image. Mostly, respondents agreed that they would instead use the benefits of the company, moreover, almost all of the recognised TUI Ukraine's logo, therefore, the marketing of company works, and for the potential franchisee the partnership with TUI Ukraine is valuable and profitable.
Figure 3.
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