Answered Essay: CAMPAIGN: PSA PEUGEOT CITROËN, SPAIN This car company’s campaign illustrates many of the key

CAMPAIGN: PSA PEUGEOT CITROËN, SPAIN

This car company’s campaign illustrates many of the key points raised
in the chapter and shows how relations from organization, public and
media perspectives were improved by a car firm after negative reactions
to its expansion threatened its development.

PSA Peugeot Citroën’s top plant is located in Vigo, Spain. However,
there was a paucity of industrial space. Establishment of this plant
changed it from a fishing village in 1958 to the current modern city.
Demographic explosion converted Vigo into the region’s industrial
capital, where football is a favourite pastime. CELTA-Vigo, its club,
became consolidated with PSA Peugeot Citroën sponsorship, but the
relationship became estranged in 2003, when the club decided to expand
its stadium located next door to the plant. The campaign had two
objectives: to resolve a short-term threat and guarantee the plant’s long
term location.

Challenge vs opportunity
CELTA presented a project for the expansion of Balaídos Stadium in
May 2003. Although the stadium is owned by the City Council, the
club has a 100-year lease agreement for the site which not only houses
the stadium but contemplates a future luxury hotel and shopping
complex.

The project was a direct threat to the PSA Peugeot Citroën plant for
motives related to space and an increase of traffic. The plant management
informed the CELTA management and politicians in private that it
was against the project. Despite this, CELTA went ahead and presented
its project to the public, with a view to placing the club amongst the
top names in Europe.
PSA Peugeot Citroën could be criticized by the citizens for subordinating
life in the city to the company’s activities. Proper management of
the conflict could reinforce the tangible and intangible ties which link
the company with its surroundings, so research and analysis revolved
around three main areas.

Research
The three proposals for action were based on identification of similar
cases where urban growth had resulted in the closure of an important
industry; determination of how much the citizens of Vigo knew about
the conflict between PSA Peugeot Citroën and CELTA; and definition of
the values that underlay the society in Vigo which could affect future
relations with the plant. A comparative analysis recommended the need
for external allies: it noted that whenever other threatened industries
opted for a head-on confrontation, it normally resulted in negative
outcomes. Public opinion research monitored the conflict. Opinions
were collected and contrasted, and decisions were implemented at
various times over a number of weeks and analysed by a ‘think tank’.

Strategic plan
The outcome was a strategy based on dismantling CELTA’s project and
ratifying a commitment to Vigo through actions that would help shape
the city. Key audiences in the short term were to be the political parties’
representatives in the City Council while the long-term target audience
would be the voters.

The message conveyed was that PSA Peugeot Citroën supported the
refurbishment of Balaídos (and not its expansion); was a world leader in
spite of its limited space; was building Vigo on a day-to-day basis and

shared its industrial culture with the city; and would not abandon

Vigo unless forced to do so.

Local and regional media, as well as the different institutions present
in the surrounding areas, were used to spread a first message. A second
message was spread through sector and national media, with news
coverage amplified by local media. Third and fourth messages were
managed through the think tank. The latter’s analysis of the future of
Vigo and its conclusions, consistent with PSA’s interests, were presented
to the public.

Operational strategy
The plan was executed in three stages within specific time constraints.
Short term. After CELTA presented its expansion project to the public,
the PSA Peugeot Citroën Vigo plant announced the production of the
7 millionth vehicle while the plant director stated: ‘If Balaídos expands,
PSA Peugeot Citroën will close down’. Influential city people were
contacted privately to explain why expansion of the stadium would
be negative and just days later, the media published opposition from
unions, businessmen, politicians and citizens’ groups to any project
that threatened PSA Peugeot Citroën.
While third parties mustered opposition to the project, the plant
organized actions geared towards promoting high production value, in
spite of lack of industrial space and deficient infrastructures. A trip was
organized for national media representatives to witness ‘just in time’
implementation of a car seat from drawing board to installation in the
vehicle.
The specialized and economic press coverage next talked about ‘the
miracle of the automobile industry in Vigo’. Numerous press reports
reached a climax with a report published in the daily newspaper El País,
which has the highest circulation in Spain. Entitled ‘rolling optimism’
it focused on the merits achieved by PSA Peugeot Citroën in spite of
threats such as the expansion of Balaídos.
Long term. In order to get citizen support to defend PSA’s interests,
public vision of the plant needed to be seen as a global reference point
for the city and its citizens, beyond economic or industrial achievement
alone.

Evaluation outcomes
The Balaídos stadium expansion project was rejected by the political
parties that comprised Vigo City Council. On 1 July 2003, the municipal

corporation signed an agreement committing itself to combat any
project that could threaten the future of PSA Peugeot Citroën in Vigo.
Press coverage in the national media (both economic and sector)
reinforced and expanded on the local and regional media coverage,
on the importance of the PSA Peugeot Citroën plant in Vigo. This flow
of media coverage resulted in an analysis by many public and private
institutions of the automobile sector in Galicia and especially that of
PSA Peugeot Citroën (eg, the 2004 GAXA report on the automobile
industry – a reference for the sector, which paid special attention to
the plant).
Lastly, the Ardora 2004 report (www.informeardora.com) was
launched. The PSA Peugeot Citroën plant had achieved an unprecedented
link with the city. The launch had united all of Vigo’s conflicting parties,
which resulted finally in Faro de Vigo, the principal local newspaper,
stating: ‘Passion for Vigo: Vigo is PSA Peugeot Citroën, PSA Peugeot
Citroën is Vigo’.

i. With reference to the broad theories of relationships described in the chapter, what type or types of relationship did Peugeot Citroën develop with its’ three key stakeholder groups?

ii. What factors influenced the campaign strategy?

iii. How might the local decision outcomes impact on the company’s

global reputation?

iv. By applying the eight factor PR integration model, identify which

technical activities contributed to the success of the campaign and

thus which of the eight strategic areas took precedence.

v. Using the BCP plan, suggest how the nature and quality of feedback

will protect the organization from future threat.

Expert Answer

Answer

i.

The three key stakeholder groups of Peugeot Citroen were the government, the citizens and the media. The company developed mostly social and psychological relationships with these stakeholder groups. The company tried to convey to them that it was contributing to the city of Vigo by providing employment and helping in its social and economic development on a daily basis. Moreover, it would always stand by the side of Vigo and its citizens. Further, the company used a psychological tactic by conveying that expansion of Balaidos stadium would result in the closure of the company. The company additionally stressed upon the fact that Peugeot Citroen supported any renovation of the Balaidos stadium, but not its expansion.

ii.

Proper monitoring of the conflict between Peugeot Citroen and CELTA by the company’s think tank was a major factor influencing the campaign strategy.

Gathering necessary opposition to the CELTA project was another important factor.

Extensive media coverage highlighting the positive image of the company was another crucial factor.

Lastly, garnering the support of all the three stakeholder groups, viz., the government, the citizens and the media, was a major factor influencing the campaign strategy.

iii.

Vigo is the most populated Spanish Municipality in spite of not being a provincial capital. Also it is an important international tourist spot.

Hence, the local decision outcome will have an impact on the company’s global reputation. A positive outcome will result in the increase of the company’s goodwill in the market. A negative outcome on the other hand may have some effect on the company’s reputation and goodwill.

iv.

The technical activities contributing to success of the campaign are as follows:

  • Extensive press coverage.
  • Managing good relations with the government.
  • Publicity exercises including a trip to the factory’s premises to promote its manufacturing expertise.
  • Extensive research on similar past incidents.
  • Doing reputation management.

So following strategic areas took precedence:

1. Media relations.

2. Public affairs.

3. Publicity & Promotion.

4. Research & Enterprise.

5. Reputation Management.

v.

Positive feedback from the stakeholder groups will help the company sustain its operations and protect its human and physical assets in the long run. It will help the company to have strong footing in Vigo and also respect among its citizens. Moreover, the company will become an integral part of Vigo economy. Lastly, the company will be protected by the government and its citizens from any future threat to its survival.

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