The Russian Federation is a country offering tremendous growth potential due to its fast-paced economic development. The Russian population's propensity to consume is, meanwhile, comparable to that of Western countries - the important difference being that consumer needs are far from being satisfied.
Despite this positive starting position, just a few Western companies have managed to find their way into the Russian soul and successfully establish their brands in Russia. Many companies ignore the large cultural differences between East and West in their brand positioning and communications, and therefore fail.
Creative Advantage has been conducting research into the challenges of geographic brand transfer and the positioning of Western brands in the Russian market since 2005. Through more than 250 in-depth interviews and several consumer workshops for a broad spectrum of international companies, Creative Advantage has developed a deep understanding of the Russian consumer.
Among the major characteristics of their behaviour is consumers' willingness to spend a large part of their disposable income on luxury goods such as designer clothes. Appearances and prestige have been an important part of Russian culture ever since the time of the Tsars. Given the fast-changing societal developments, Russians prefer to look good today rather than saving the money for future purchases.
As brands had just become available after the break-up of the Soviet Union, Russians are very open to trying new products. This leads to much lower brand loyalty compared with Western Europeans. Yet in their search for new goods, Russians value product quality extremely highly, because there is still a flourishing trade of brand copies.
Marketers should keep these consumer characteristics in mind, when planning the communication strategy for their brands. Creative Advantage's research delivers some key insights in this area.
Strong solidarity with a small circle of trusted friends - typical of Russian culture - influences product trials, and not always positively. In a dynamic consumer environment where little trust is placed in local manufacturers, brand recommendations from friends and family are valuable guides in the choice process, and tend to have a lasting impact on consumer behaviour.
This fact offers a promising starting point for viral marketing. Personal recommendations are more valuable in influencing the acceptance and spread of brands than most traditional advertising tools.
Russians regard advertising with scepticism. In the majority of the Creative Advantage consumer workshops, spontaneous brand awareness for household FMCG brands was low. And part of the explanation for this low brand awareness is the generally poor level of advertising knowledge.
However, it was clear Russian consumers particularly value making brand choices independently of any influence from advertising and brand image. Nevertheless, irrespective of consumers' claims to the contrary, prompted advertising awareness is on a similar level to many Western countries.
Advertising that communicates authentic or credible "stories" of everyday life and that offers identification potential for the viewer is generally positively perceived. Communication should, therefore, convey "real-life stories" with high relevance for the target audience.
An example of advertising that is well received by consumers is the Winston campaign. A further example is the poster campaign for the mobile network provider Megafon, which played on the new-found middle-class passion for travel by depicting holidaymakers at popular worldwide destinations, such as the Pyramids in Cairo, the Eiffel Tower in Paris and the Statue of Liberty in New York.
By contrast, Western ads dubbed with voiceovers come across very badly. Consumers consider Western advertising that is simply language-adapted and run in Russia to show a lack of cultural respect.
Traditional values play an important role in Russian society. Parents and women are accorded particular respect, which greatly restricts the extent to which international advertising targeted specifically at women can be directly transferred to the Russian market.
Particular caution is advisable in Russia with regard to permissive advertising. This topic is even happily avoided by younger consumers in discussion groups. The saying "V Sowjetskom Soyuze seksa net" (We don't have sex in the Soviet Union) is still often quoted today, albeit apparently only as a joke.
But, for example, the poster campaign in Tchelyabinsk for the mobile phone brand Sagem caused great uproar with its strapline: "Caress your ear." Many older residents considered the ad immoral and impure; their strong protest led to the poster being withdrawn.
With a well-considered positioning and communication strategy, the risks of entering the market can be minimised. Once companies have researched the rules of the market specific to their industry, the door to market and consumer understanding swings wide open.
- Valentina Glubokovskaya is a consultant at Creative Advantage.