9 Jul 2011

Marussia Virgin Racing...rocks

Here is an example or the Russian company teaming up with a Western marketing master - Virgin to sell cars that appeal to both Russian and Western consumers.  
'For decades the Lada has been the symbol of Russian cars: cheap, economical and very unfashionable. But as Russia's first luxury sports car, the Marussia hopes to change perceptions of the country's motoring industry. Nikolai Fomenko, 'Marussia motors' CEO, gave the BBC a few insights into the new car' (source). 

Brand 'Marussia motors' (pronunced in English as Maroosya motors | Маруся моторс). 

Marussia will have limited car edition in Russia. There will be three main car categories: Grand Tourer, Sedan and Crossover. All cars have Renault engines. In the car saloon, you will get fast Internet, all entertainment with Tv&Radio, DVD, bluetooth connection, phone, three cameras and so on. The wheel is as in the cars in F1 - that is very comfortable to manage because it has smaller angle of control. There are three monitors in a car that have navigation and projector with a graphic invitation (Source). Cars 'Marussia' have EU certification ISO 9001:2008. 

Marussia Virgin Racing = Marussia + Virgin Racing
Marussia Virgin Racing image source
Russian sports car gears up for F1

image source

More info here and here.

1 Jul 2011

Russia in brief

Russia is a vast country with a wealth of natural resources. It is the world's largest exporter of natural gas and second largest exporter of oil, of which it produced about 12 per cent of global supply in 2009. Russia's economy is heavily dependent on these exports Source.

Russian territory divided into 8 federal districts and 9 time zones (previously 11 time zones).

The Russian Federal Districts Map 

More info on federal districts in Russia here.
Some Russian Economic Reports can be found here.

see this video to know more how Russia works - This is Russia (see link)

13 Jun 2011

Online Marketing in Russia

For online marketers, Russia offers two appealing qualities: It’s one of just five countries in the world where Google isn’t the market leader, and Russia is now the 2nd biggest online market in Europe in terms of users, having passed the UK last year.

Yandex is the market leader in Russia, with a 64% market share, more than double Google’s 22% share, according to Russian statistics service LiveInternet (Dec. 2010). In addition to reaching native Russian speakers, Yandex (Yet Another Indexer has been aggressively expanding globally, now reaching 56 million users from all over the world.
Some other interesting stats: Despite being the second largest online market in Europe, less than half of the Russian population has internet access, suggesting more growth to come:
internet penetration in russia 2010
Russian internet users are comparatively young, though internet penetration in Moscow resembles major western cities:
internet penetration by age in Russia 2010
Although the most popular social media sites in Russia are homegrown (Vkontakte.ru,Odnoklassniki and Mail.ru’s My World Western social media platform usage (namely Facebook and Twitter) almost doubled in 2010.
The total advertising market in Russia was about $7.5 billion in 2010, with about 11% of that going to online ads. The market is expected to grow to about $10 billion by 2012, with online spending increasing to 13% of total spend, according to Russian daily news provider Kommersant.
For more on search advertising options available in Russia, see our detailed Search Marketing Tips For Yandex, Russia’s Top Search Engine. Yandex also offers extensive Webmaster tips for help with getting your site properly indexed. To get started with search ads, visit Yandex Direct, the company’s (English language) self-serve platform.

25 Apr 2011

Refreshing Kvas - traditional Russian summer soft drink

According to market research, soft drinks are one of the most growing and promising segments in Russia. Kvas is a promising niche product that is extremely popular among Russians and Russian speaking audiences (very popular in Ukraine, Poland too). The traditional Russian drink kvas, made from rye bread, is considered to be a safe and healthy product. Some kvas even contain vitamins.
Some Kvas drinks do not contain alcohol but usually it contains a small % of alcohol similar to kefir (see link). You can drink it when thirsty or make an 'okroshka soup' - summer cold soup (other kvas recipes here, see link). 
During the USSR times, kvas was usually was sold on the streets via a yellow tank trailer by small/medium and large glass, see picture. These days you can buy kvas from any retail store in a bottle or a can. Some bars and cafes also offer kvas and kvas based summer dishes.

For the last several years kvas in Russia became a more and more popular drink. The reason behind kvas' popularity is that it is a natural product. Nowadays, there are more than 200 kvas producing companies in Russia.
These kvas brands - 'Blagodei', 'Nicola', 'Ochakovsky', 'Pershin', Stepan Razin' have 60% of the market share in the category 'cities Russia' (see link). On a hot summer day, in a city of more than a million citizens, from the retail stores people sell 50 ton of kvas drink every day. The  market share for kvas among other soft drinks has grown from 4% to 14%. For the last 10 years the kvas market has grown 10 times (source).

According to this source (see link), in 2010 'Ochakovo' was the leader in kvas market and had 32% of market share, brand 'Nicola' - 20% , 'Krujka i bochka' by Coca-cola - 7%.

Competition for kvas
In the Russian soft drinks market there are two main players - PepsiCo and Coca Cola. In the kvass niche, first PepsiCo entered the Russian market in March 2010 - with the brand Russky Dar (see link).  Coca Cola has also entered the market and registered several kvas brands.

Here is a video about Coca cola and kvas brands

Other kvas competitors
Kvas brands such as Ochakovsky, Nicola, Russky Dar, Krujka i bochka, Opohmeloff, Hlebniy krai, Moskvas are presented in table below.

Please note: this is not an exclusive list of kvass producers in the Russian market.


Nicola brand advertising strategy
Nicola has two meanings. First meaning - as a male name (working class), second meaning can be translated from the Russian language as "Not as Cola". In an ad campaign they use both meanings, "Drink natural, Drink Nicola = Not as Cola".

Propaganda 'No! to Kvass'
The commercial titled as Hat/Шапка, Propaganda Kvasu Net (see link), was done by Instinct advertising agency for Deka company, Nicola brand, in Russia. It was released in the May 2008.

Last summer, I have tried all the popular brands that are producing kvas and my favorite is Ochakovo (see link) because it is not as gassy as the others and has more natural rye bread taste. Kvas 'Russky dar' (see link) is quite gassy and does not have an organic bread taste. Nicola (see link) is somewhere between Russky dar and Ochakovo with some notes of yeast to my taste. Overall, my first choice is Ochakovo then Nicola then Russky dar.

11 Apr 2011

Fashion Marketing

Last week, I visited 'Practicum: British Fashion-2' an event that was organized by the British Council in partnership with the 'Local fashion' and Center for contemporary culture 'Garage' (see link). 
Very talented designers presented their work and creative approach. The event program is here (see link). Here is a list of the young designers brands that were presented during the fashion event:
Michaela Mazalanova from Slovakia
MAREUNROL'S from Latvia 
D.EFECT from Lithuania 
m*faganel from Slovenia
R/H from Finland
Soulland from Dania
Kristian Steinberg from Estonia
Lisa Shahno from Russia
Nadia Nurieva from Russia
[Пять Пять] from Russia
FortyTwo from Russia
The UK fashion marketing experts  Toby Meadows, Janine Passley, Amelia Gregory, Clare Lopeman, Michael Salac raised some marketing general questions that are relevant for the young up-and-coming designer to go through and they shared their UK business experience with the creative young audience. Their speech was not tailored specifically to the Russian market but to the UK and how things are done in the West for Western customers.

Some observations relevant to the Russian market raised during discussions

"What are the challenges designers face when entering the Russian fashion market?"

Finding the right fabric can be challenging for a designer in Russia
Moscow is not as developed in terms of international fabric supply as it is in London, where you can buy almost any kind of fabric by visiting shops on a  single street. While some designers use locally produced fabrics, most Russian designers import  good quality materials from abroad in small quantities. Ordering and delivering materials to Russia can be pricy.  For that reason, some Russian designers offer their 'Limited edition collection' for a small or even 'elite' audience.

Location. Location. Location - finding the store to place your collection can be difficult in Russia
In Russia, designers face the retail distribution issue. I would say that in Russia there are three main types of outlets.
First are retail chains such as Zara, Gap and other mostly Western brands, second is a private small Russian boutiques shops that are already selling Russian designer brands to the public.  Some stores are willing to take just small orders for sale. Even though there are lots of shopping centers in Moscow and other Russian cities, I still think that most lower middle class Russians go to the market to shop for clothing. The question is that if you are a starting designer, how will you find place to sell your collection? Will you open a new store? That can be a challenge.

The educational gap can be a big issue for a designer
In Russia, it is quite difficult to find fashion education that is in-tune with the global fashion market and also have affordable fees.
There are a few institutions in Russia to study fashion such as the Moscow State Textile University 'A.N. Kosygin' (see link) and a recent entry the British Higher School of Art & Design (see link).

The confidence issue
There are many talented designers who have creative vision but how many of them make this vision happen? How many are there  who can make it happen by staying in the market for at least three years? Not so many. Apart from other obstacles the designer faces, the psychological barrier is just one of the strongest ones and it concerns self-confidence and having the tolerance to wait sometimes while you are establishing your name as a brand.

NO money for marketing? Free press, advertising and the word of mouth.
How do you advertise your brand in Russia if you have limited financial sources ?
The main trend these days is doing free social media marketing ("SMM"). This doesn't  actually work for every brand that implements it. SMM is not about sales but about buzz and connection and also a conversation between the brand and potential client. SMM is about strategy not 'shouting in the space' about your product. It takes time and a good craft.
Online marketing in Russia compared to the UK is a bit different. There are some issues that are relevant to the Russia - for example, in Russia online stores exist but not as many as you see in the UK. Part of the problem is that there are not many people ready to pay online in Russia. It is an issue of trust and also online banking development across the whole country.

There does not yet exist 'a signature Russian style' that can recognized internationally
At the conference, UK fashion marketing experts asked designers to consider the following questions:
What is Russian fashion?
What is the Russian identity? Is it a folklore?
What is unique about the Russian fashion identity ? How is it different from the rest of the Fashion world?
Will your "Russian brand" will be recognized abroad because it is Russian?
How would you position 'Russian brand abroad' ? Will you position it to the Russian people living abroad or to the locals?

One question was about the future of the ethical brand development in Russia. One designer half- jokingly said that it won't work in Russia and we are not ready for it. Let's define what an ethical brand is.
TERM: Ethical brand is associated with minimal harm to or exploitation of humans, animals and/or the natural environment. From the expert fashion presenters I get that by talking about 'ethical brands' they were talking about  'green and organic brands'.
(I think that, the word 'ethical' can  be perceived as confusing word for Russian business environment, instead of using 'green').

Is there a future for the 'green' brands in Russia?
I personally believe that green brands should exist in Russia. Many think that Russians are  'living in the past' and are not concerned with being green. On the other hand, from the global/planet point of view, Russia is one of the biggest countries on planet and with  awareness and education  the Russian consumer will want to be green too. Of course it will take time to do. I think that you might be surprised by the positive outcome  - 'if you don't create the change first - than change will create you' - meaning that becoming a pioneer in the green brand establishment in Russia - will almost definitely have a positive impact on your customers.
I just came across this Russian brand "Low Fat" (see link) that positions itself as 'green'. 'Low Fat clothing uses eco-friendly materials like organic cotton, hemp, and fabric from recycled plastic. They also focus on natural dyes such as powdered natural minerals, juice, fruit, and pollen. They stick to recycled materials for their packaging and marketing, as well' (source). The Body Shop Russia (see link) is doing it. It's only a matter of time.
Source: PRACTICUM: BRITISH FASHION-2, image source, Personal observations

Additional readings - The Russian Fashion Retail Market.pdf (see link)

23 Mar 2011

This Is Russia

This is a very good work, this video ad explains in short what to expect from working with Russians.  

This is Russia

Tochka Opory

20 Mar 2011

Russia: A Journey with Jonathan Dimbleby

In order to understand how to market to Russians, you need to get a cultural understanding of Russia. Russia is very diverse and multicultural. Russia is not Moscow and Moscow is not Russia. Russia is its people and people have different faces in Russia.
This is a very good DVD about Russia that covers many Russian cities and explores Russian lifestyle. It was very interesting to see how Russian cities are that far away from Moscow and St. Petersburg, however, this DVD doesn't cover Southern part of Russia, which is very different from the rest of Russian cities. Overall, this DVD can be a short introduction to the Russian culture.
"In television's first comprehensive journey through the vast and varied landscapes of Russia, the resourceful Jonathan Dimbleby makes an epic journey from one end to the other, killing cliches and revelling in the unpredictable. Across nine time zones and through all extremes of weather, he seeks out the people of this strange and extraordinary land. From the Arctic Circle where the summer sun never sets to the subzero wastes of Siberia, from white witches to hirsute masseurs, from oil wells to shamans, Dimbleby's journey by boat, train, truck and foot is heart-warming, entertaining and compelling. From outside, Russia is both forbidding and enticing. Inside it becomes an exhilarating adventure," Source(c) Image source (see link). 
  • Release Date: 16/06/2008

There are some episodes from a Journey with Jonathan, have a look
Location @Arctic Circle

Location @Ekaterinburg,  in a Russian pub

Location @Siberia, plays computer games in Academgorodok

Location @Moscow, in a Russian bath/Баня

17 Mar 2011

Great Product for St.Patrick's Day !!

Today is St. Patrick's day which came to Russia from Ireland.

In Russia you can get green beer but why not continue the green tradition with food. Try Georgian home made organic sauce called 
Tkemali (Ткемали), it is usually made of green and red wild plums.

It has savory taste and is usually eaten with meat and is added to soups.


(c) Image source1   (c) Image source2 

16 Mar 2011

Foreign Food Service Chains Growing in Russia

Customers of all shapes and sizes selecting yogurt on Tuesday at Pinkberry’s first cafe, located at Moscow-City.

Research by frozen yogurt chain Pinkberry (see link), which shows that Russians are increasingly inclined to watch what they eat, helped convince the company to open its first outlet in Moscow on Tuesday, adding another American franchise to the city.
"Moscow has a large consumption market with room to grow," Pinkberry chief executive Ron Graves said at the cafe located at the Moskva-City business complex.
Other U.S. chains have also taken notice of the healthy eating trend — Baskin-Robbins's newest product is a reduced-fat and sugar-free ice cream.
Pinkberry, which is known for its health-conscious frozen treats and modern design, is the latest entrant to Moscow's booming franchise market.
Cinnamon roll bakery Cinnabon (see link) has seven franchises in Moscow and will spread to other Russian cities, such as St. Petersburg, Rostov-on-Don and Vladivostok, in the near future.

The Papa John's pizza  (see link) chain opened 17 franchises in the capital and continues to grow. 

Dunkin' Donuts (see link) opened nine shops in Moscow, with more promised.
The steady growth of American snack and coffee shops will continue for the next several years, Deutsche Bank chief economist Yaroslav Lissovolik said. Increased household income levels and consumer demand make a favorable environment for the growth of such businesses.
"The Russian consumer is ready to graduate to the higher level of consumption," Lissovolik said.
Another reason for the steady growth is lack of competition. Pinkberry is the first frozen yogurt venue with a sit-down cafe format in Moscow. Redberry and Freshberry serve products similar to Pinkberry, but they are kiosks in shopping centers and cinemas.
Although there are some kiosks where doughnuts can be purchased, Dunkin Donuts is the only chain coffee shop that focuses on the fried delights.
The ruble's increasing value makes Russia more attractive for foreign companies because of higher profit margins, Lissovolik said.
Pinkberry will open another store in Moskva-City in late spring at Afimall, also known as the Mall of Russia.
To attract clients, the chain will market their brand via social networks, like many other companies reaching out to Russia's growing population of Internet users.
"The Moscow consumer is sophisticated," Graves said.
The continued presence of these chains on the market will contribute to better quality of food and lower prices because there will be more competition, Lissovolik said.
Moneks Trading  (see link)— a franchise company that represents U.S. and British brands that include The Body Shop, Mothercare, Payless and M.A.C — is Pinkberry's partner for the Moscow rollout. Moneks is also the joint-venture partner for Starbucks in Russia.
Local Pinkberry prices are about the same as in the United States. A small cup of yogurt with toppings costs 175 rubles ($6), while a large cup costs 313 rubles ($11).

Pinkberry has 113 stores, mostly in the United States and the Middle East. The chain is starting to expand to other locations. The next location will be Istanbul, and later Europe and Asia, Graves said, but declined to give specific details.

Source: The Moscow Times, 16 March 2011 (see link)

7 Mar 2011

English Language Influence

In everyday life these English words have been adopted by Russians without translation.
supermarket, hypermarket, provider, user, drive, hosting, leasing, brand, manager, producer, marketing, headhunter, HR, PR, consulting, supervisor, startup, transfer, snack, smoothie, entrepreneur, fresh, pasta, hamburger, fish, creative, usability and many more !!
© Personal observations

2 Mar 2011

iBlin, Sausage.ru and Ёmobile

I have noticed a certain pattern in naming products.
The first observation is that by adding a symbol "Ъ", (hard sign) - which was used in the old days in Russia - certainly creates an image of "still in business since the old days".

Adding the russian symbol "Ъ" 
(see link)
Source: Newspaper КоммерсантЪ/Kommersant; Shoe shop - ОбувѢ/Shoe shop; ЧайкофЪ/Chaikof; Ложкаревъ/Logkarev; Пушкинъ/Pushkin

Secondly, you can find many name examples where English language is used or mixed with Russian language. The reason behind it is  to make the product more appealing, "in-tune", with the modern and young generation. 

Mixing Russian language with English
Beer.Ka; iБлин/iPancake; Sausage.ru

Interestingly, iБлин/iPancake ads are surprisingly similar to iPod ads (see link), by Apple. 

Thirdly, the use of adding "i" in front of the brand and ending with OFF

Finally, the use of  "Ё" (see link) (pronounced as "Yo"). 
For example,  the brand  Ёmobile sounds like saying  "Your mobile."
According to this (see link) practice of starting a word with a nonstandard letter is similar to brands that starts with i (for example, iPod, iTunes).

More info about Ёmobile/Your-mobile, translated from Google in English can be found here 
(see link)
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