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Marshall Toplansky
I was recently invited to spend a week
helping a large company in Russia look
at its marketing and channel management
strategies. As with many companies in
Russia --now that capitalism has replaced
communism as the predominant economic
model -- management is looking at ways
to expand beyond their country's borders.
As I listened to our client tell us about
their marketing approach, I was struck
by the similarities in channel-management
issues between the US and Russia. Their
biggest challenges are getting mind share
over competition, providing channels with
clear incentives to promote a brand or
line, crafting promotions that optimize
inventory and sell through, and building
lasting relationship built on a solid,
comprehensive ROI for both the partner
and the vendor.
Why does this seem strange for Russia?
My pre-trip bias, based on press stories,
was that Russia is a corrupt market, where
building channel "cooperation" was done
at the point of a gun. ("Too bad you did
not make this quarter's sell through goal,
Comrade. Sleep tight!") But, I found that
Russian companies were motivated by the
same kinds of issues and concerns that
businesses everywhere are. Here's an example:
a manufacturer was interested in using
the Internet to establish a direct-to-consumer
channel. Their major concern was how their
wholesale and retail channels would react
to this. Price maintenance, poaching customers,
defining geographic areas for the channel
partners, carving out separate SKUs for
the direct channels... all of these were
reviewed and considered. Sound familiar?
It should. It is the same conversation
one would have with Core Strategies in
any boardroom in the US.
There are, of course, large cultural
and other differences between Russia and
the West. For instance, Russian executives
seem more interested using Russian resources
and suppliers, despite their higher cost
and lower efficiency, than Western vendors
are. And, there is clearly a "patronage"
system, where companies ally themselves
with certain groups or people rather than
adopt unfettered "free market" practices.
But, overall, there are more similarities
in how business is done than differences.
If your company is looking to develop
your channels in Eastern Europe, China,
Latin America or other quickly developing
regions Core can help. Our global experience
can make it easier to avoid pitfalls and
understand both the similarities and differences
of doing business outside of North America.
Give us a call--we'd love to talk about
your plans and share our experiences.
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