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Marketing in today’s fast-changing Russia

The magical allure of “Imported” is quickly losing its sparkle in Russia.

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Fickle are the ways of the world. In Russia not that very long ago, all you had to do was bring in something “imported” and it was bought almost sight unseen. No marketing needed at all.  It didn’t test the imagination that such eager acceptance of anything foreign-made was understandably in response to years of scarcity and mono-choice products.

When first visiting the then USSR in the late 1970’s, no matter where you went, it seemed to my western eyes there was only one brand of milk for sale, and was intriguingly branded and marketed as “Milk” in shops fetchingly named “Products” or “Groceries”.

The Soviets took generic branding to an entirely new level. In the Soviet era, a much-heard term in shops when looking to purchase just about anything was “it is in deficit”. Countries, culture, politics and times do change, some as in the case of Russia by 180 degrees.

Russian consumers are by nature forgiving, they do not hold grudges as a rule, yet the rules of marketing and production of things are changing. Today you could probably successfully sell “designer” items with brands such as “Boris Johnson Baby Diapers”, “John Bolton’s Moustache Wax”, or even “Theresa May Mouthwash” – as long as they were mostly produced or assembled in Russia. This is a significant, rather recent shift in consumer perception.

The other day I was shopping for shampoo and watched two well turned out ladies examining the cosmetics they were looking to buy, making sure they weren’t imported, but either made under license in Russia, or simply made in Russia. This trend, for those who know Russia, is a significant change in mindset especially as imported goods for decades have been promoted as being better than anything Russia could make.

While on the topic of beauty, personal care and things hygienic – since 2014, when new sanctions were first imposed on Russia, and the mirrored responses to them by Russia, the country’s personal care market has contracted to some degree. Strong undercurrents seem to be driving long-term changes to the sector, notably an increasing preference for locally produced less costly products by sometimes hard-pressed consumers.

The increase in the grocery-basket of prices over the past four years has played a role, as consumers will always prioritize groceries over all but the most basic of toiletries. Within the beauty and personal care industry, this is seen in consumers looking for local price advantages even if it means giving up the ephemeral social prestige seen in some brand associations.

Not very long ago it was seen as “fashionable” for trendy Russians to look like advertising signboards for Moschino, Gucci, D&G and so on – less so today. The “nouveau” has gone out of the “riche”, and price:quality is reasserting primacy. The idea of “foreign” is steadily losing out if the Russian equivalent meets similar basic criteria, and the change has its own cachet.

The devaluation of the Russian ruble has led to high unit price hikes, as many international personal care and beauty brands and their ingredients are still largely imported, therefore far above even the upper middle-income ranges today.

Despite the sanctions, ruble devaluation and the follow-on lukewarm performance of the beauty and personal care market, Russia remains the largest market for cosmetics in Eastern Europe and accounts for 50% of the retail cosmetics market of the CEE. Russia alone is considered Europe’s largest market with a population of over a 143 million, and yet foreign companies historically have had trouble accessing the full purchasing power of Russian consumers.

Cultural sensitivity and understanding of trending realities are one key to effective marketing. The specifics of a nation, its beliefs, and its idiosyncrasies can make or break a business. Marketing in Russia needs a strong cultural adaptation. The basis of the culture and certainly language is different from Western cultures, in daily life as in business.

Russians are a patient but deeply proud people. They are patriotic and strong defenders of the reputation of their country. They accept that their lives are difficult when measured by climate, distances and geography, and take pride on being able to flourish in conditions that others could not.

Today, intra-market competition and the digital world have launched marketing, from basic retail to online e-commerce and social media marketing (SMM) onto undreamed of heights throughout Russia.

As of this writing a tad more than 75% of the Russian population are Internet users. Those remaining outside include the “older” generation (70+ years) as well as those living in very small or remote villages and settlements. As for the young and middle-aged living in cities, Internet use reaches 100%. In terms of marketing to Russian’s it means using the Internet and SMM resources to promote inside Russia is no longer optional, it is a necessity. It is the most efficient promotion channel today in Russia for most goods and services.

In 2017 Russia’s e-commerce reached the ruble equivalent of US$18 billion, growing at a rate of 13% pa and beating out bricks & mortar retail which grew by low single digits (3-5%).

Today, social networks reach over seventy-five percent of the population, and many users have developed multiple site familiarity. Female audiences form a majority in all six popular Russian social networks: the percent of female users on both Instagram and Odnoklassniki is about 70%; MoiMir 60%; Facebook and Vkontakte there is a small majority of female over male users; and on Twitter, there is no appreciable difference.

The same tools as anywhere are in the Russian Internet: Search Engine Optimization, Contextual Advertising, Banner Advertising, Social Media and Blog Advertising, E-mail Marketing, Cost-Per-Action Mechanisms. That said and this being Russia, it is mostly Russian companies that are the undisputed leaders on the internet of things. One example is Yandex, being the most popular search engine in Russia and not the Google’s of this world. Besides, there are some specific behavior differences in a Russian Internet audience.

Transitioning a business internationally is more than simply costs and procedures. It has more to do with cultural alignment and social linguistics than the skillful arrangement of numbers. It is making your product or service fit the desires and unique markers that characterize the users’ in country.

Domestic marketing of any business is challenging, doing it at a distance and in another culture is the Olympics of marketing. Countries may be becoming a bit more similar thanks to the worldwide web, but each country at its cultural core will rarely budge for anything: their sensitivities, traditions, humor, dialogues, myths and protocols are essentially unchanging and can be most stubbornly unaccommodating.

What keeps non-Russian corporations out can seem a little mysterious, given the new, globalized marketplace. The Russian language for one is incredibly rich with plenty of terms and descriptors that have six or seven synonyms in English, or simply defy translation altogether.

As for Russian consumers, translation is a bottom line necessity, as vast majorities of them do not speak a second European language. Russians will not be able to appreciate and respond to marketing material that has not been completely and carefully translated into their own language.

Despite being a fully globalized country with widespread internet access, infrastructure and one of the highest literacy rates on Earth, Russian consumers are a unique group in how they have resisted certain aspects of the globalizing age.

A common perception is that local Russian companies today, especially small businesses, are more trustworthy and cheaper than foreign equivalents. Any foreign corporation trying to appeal to Russians will have to pro-actively fight such perceptions.  It also makes a real positive difference to fully localize a company or brand web presence in Russia. Getting a “.ru” domain assists in appearing more acceptably native.

A number of American companies have understood this trend and the “hints” and have set up local production inside Russia, becoming “made in Russia”. Here are just a few: Pfizer, Forever 21, Boeing, Crate & Barrel, Ford-Sollers, Pepsico, Procter & Gamble, Philip Morris, Mondelez, GM, J&J, GE, Cargill, Alcoa, Archer Daniels Midland, McDonalds, even Starbucks has opened its 100th Russian store, with Krispy Kreme snapping at its heels with five shops.

At the end of the day, it does make a significant difference if the product being marketed can factually be labelled made, compounded, or assembled in Russia. I think it was Joe Chernov who first said “Good marketing makes a company look smart. Great marketing makes the customer feel smart.” That in a nutshell is the sort of sensitivity and approach which keeps paying dividends for years to come.

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Foreign Banks Are Embracing Russia’s Alternative To SWIFT, Moscow Says

Given its status as a major energy exporter, Russia has leverage that could help attract partners to its new SWIFT alternative.

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Via Zerohedge


On Friday, one day after Russia and China pledged to reduce their reliance on the dollar by increasing the amount of bilateral trade conducted in rubles and yuan (a goal toward which much progress has already been made over the past three years), Russia’s Central Bank provided the latest update on Moscow’s alternative to US-dominated international payments network SWIFT.

Moscow started working on the project back in 2014, when international sanctions over Russia’s annexation of Crimea inspired fears that the country’s largest banks would soon be cut off from SWIFT which, though it’s based in Belgium and claims to be politically neutral, is effectively controlled by the US Treasury.

Today, the Russian alternative, known as the System for Transfer of Financial Messages, has attracted a modest amount of support within the Russian business community, with 416 Russian companies having joined as of September, including the Russian Federal Treasury and large state corporations likeGazprom Neft and Rosneft.

And now, eight months after a senior Russian official advised that “our banks are ready to turn off SWIFT,” it appears the system has reached another milestone in its development: It’s ready to take on international partners in the quest to de-dollarize and end the US’s leverage over the international financial system. A Russian official advised that non-residents will begin joining the system “this year,” according to RT.

“Non-residents will start connecting to us this year. People are already turning to us,”said First Deputy Governor of the Central Bank of Russia Olga Skorobogatova. Earlier, the official said that by using the alternative payment system foreign firms would be able to do business with sanctioned Russian companies.

Turkey, China, India and others are among the countries that might be interested in a SWIFT alternative, as Russian President Vladimir Putin pointed out in a speech earlier this month, the US’s willingness to blithely sanction countries from Iran to Venezuela and beyond will eventually rebound on the US economy by undermining the dollar’s status as the world’s reserve currency.

To be sure, the Russians aren’t the only ones building a SWIFT alternative to help avoid US sanctions. Russia and China, along with the European Union are launching an interbank payments network known as the Special Purpose Vehicle to help companies pursue “legitimate business with Iran” in defiance of US sanctions.

Given its status as a major energy exporter, Russia has leverage that could help attract partners to its new SWIFT alternative. For one, much of Europe is dependent on Russian natural gas and oil.

And as Russian trade with other US rivals increases, Moscow’s payments network will look increasingly attractive,particularly if buyers of Russian crude have no other alternatives to pay for their goods.

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US leaving INF will put nuclear non-proliferation at risk & may lead to ‘complete chaos’

The US is pulling out of a nuclear missile pact with Russia. The Intermediate-Range Nuclear Forces Treaty requires both countries to eliminate their short and medium-range atomic missiles.

The Duran

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Via RT


If the US ditches the Intermediate-Range Nuclear Forces Treaty (INF), it could collapse the entire nuclear non-proliferation system, and bring nuclear war even closer, Russian officials warn.

By ending the INF, Washington risks creating a domino effect which could endanger other landmark deals like the Strategic Arms Reduction Treaty (START) and collapse the existing non-proliferation mechanism as we know it, senior lawmaker Konstantin Kosachev said on Sunday.

The current iteration of the START treaty, which limits the deployment of all types of nuclear weapons, is due to expire in 2021. Kosachev, who chairs the Parliament’s Upper House Foreign Affairs Committee, warned that such an outcome pits mankind against “complete chaos in terms of nuclear weapons.”

“Now the US Western allies face a choice: either embarking on the same path, possibly leading to new war, or siding with common sense, at least for the sake of their self-preservation instinct.”

His remarks came after US President Donald Trump announced his intentions to “terminate” the INF, citing alleged violations of the deal by Russia.

Moscow has repeatedly denied undermining the treaty, pointing out that Trump has failed to produce any evidence of violations. Moreover, Russian officials insist that the deployment of US-made Mk 41 ground-based universal launching systems in Europe actually violates the agreement since the launchers are capable of firing mid-range cruise missiles.

Leonid Slutsky, who leads the Foreign Affairs Committee in parliament’s lower chamber, argued that Trump’s words are akin to placing “a huge mine under the whole disarmament process on the planet.”

The INF Treaty was signed in 1987 by then-President Ronald Reagan and Soviet leader Mikhail Gorbachev. The deal effectively bans the parties from having and developing short- and mid-range missiles of all types. According to the provisions, the US was obliged to destroy Pershing I and II launcher systems and BGM-109G Gryphon ground-launched cruise missiles. Moscow, meanwhile, pledged to remove the SS-20 and several other types of missiles from its nuclear arsenal.

Pershing missiles stationed in the US Army arsenal. © Hulton Archive / Getty Images ©

By scrapping the historic accord, Washington is trying to fulfill its “dream of a unipolar world,” a source within the Russian Foreign Ministry said.

“This decision fits into the US policy of ditching the international agreements which impose equal obligations on it and its partners, and render the ‘exceptionalism’ concept vulnerable.”

Deputy Foreign Minister Sergey Ryabkov denounced Trump’s threats as “blackmail” and said that Washington wants to dismantle the INF because it views the deal as a “problem” on its course for “total domination” in the military sphere.

The issue of nuclear arms treaties is too vital for national and global security to rush into hastily-made “emotional” decisions, the official explained. Russia is expecting to hear more on the US’ plans from Trump’s top security adviser, John Bolton, who is set to hold talks in Moscow tomorrow.

President Trump has been open about unilaterally pulling the US out of various international agreements if he deems them to be damaging to national interests. Earlier this year, Washington withdrew from the Joint Comprehensive Plan of Action (JCPOA) on the Iranian nuclear program. All other signatories to the landmark agreement, including Russia, China, and the EU, decided to stick to the deal, while blasting Trump for leaving.

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Kiev ‘Patriarch’ prepares to seize Moscow properties in Ukraine

Although Constantinople besought the Kiev church to stop property seizures, they were ignored and used, or perhaps, complicit.

Seraphim Hanisch

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The attack on the Eastern Orthodox Church, brought about by the US State Department and its proxies in Constantinople and Ukraine, is continuing. On October 20, 2018, the illegitimate “Kyiv (Kiev) Patriarchate”, led by Filaret Denisenko who is calling himself “Patriarch Filaret”, had a synodal meeting in which it changed the commemoration title of the leader of the church to include the Kyiv Caves and Pochaev Lavras.

This is a problem because Metropolitan Onuphry of the Ukrainian Orthodox Church which is canonically accepted and acts as a very autonomous church under the Moscow Patriarchate has these places under his pastoral care.

This move takes place only one week after Patriarch Bartholomew I of Constantinople unilaterally (and illegally) lifted the excommunications, depositions (removal from priestly ranks as punishment) and anathemas against Filaret and Makary that were imposed on them by the hierarchy of the Moscow Patriarchate.

These two censures are very serious matters in the Orthodox Church. Excommunication means that the person or church so considered cannot receive Holy Communion or any of the other Mysteries (called Sacraments in the West) in a neighboring local Orthodox Church. Anathema is even more serious, for this happens when a cleric disregards his excommunication and deposition (removal from the priesthood), and acts as a priest or a bishop anyway.

Filaret Denisenko received all these censures in 1992, and Patriarch Bartholomew accepted this decision at the time, as stated in a letter he sent to Moscow shortly after the censures. However, three years later, Patriarch Bartholomew received a group of Ukrainian autocephalist bishops called the Ukrainian Orthodox Church in the USA, who had been in communion with Filaret’s group. While this move may have been motivated by the factor of Bartholomew’s almost total isolation within Istanbul, Turkey, it is nonetheless non-canonical.

This year’s moves have far exceeded previous ones, though, and now the possibility for a real clash that could cost lives is raised. With Filaret’s “church” – really an agglomeration of Ukrainian ultranationalists and Neo-Nazis in the mix, plus millions of no doubt innocent Ukrainian faithful who are deluded about the problems of their church, challenging an existing arrangement regarding Ukraine and Russia’s two most holy sites, the results are not likely to be good at all.

Here is the report about today’s developments, reprinted in part from OrthoChristian.com:

Meeting today in Kiev, the Synod of the schismatic “Kiev Patriarchate” (KP) has officially changed the title of its primate, “Patriarch” Philaret, to include the Kiev Caves and Pochaev Lavras under his jurisdiction.

The primate’s new official title, as given on the site of the KP, is “His Holiness and Beatitude (name), Archbishop and Metropolitan of Kiev—Mother of the cities of Rus’, and Galicia, Patriarch of All Rus’-Ukraine, Svyaschenno-Archimandrite of the Holy Dormition Kiev Caves and Pochaev Lavras.”

…Thus, the KP Synod is declaring that “Patriarch” Philaret has jurisdiction over the Kiev Caves and Pochaev Lavras, although they are canonically under the omophorion of His Beatitude Metropolitan Onuphry of Kiev and All Ukraine, the primate of the canonical Ukrainian Orthodox Church.

Philaret and his followers and nationalistic radicals have continually proclaimed that they will take the Lavras for themselves.

This claim to the ancient and venerable monasteries comes after the Holy Synod of the Ecumenical Patriarchate announced that it had removed the anathema placed upon Philaret by the Russian Orthodox Church and had restored him to his hierarchical office. Philaret was a metropolitan of the canonical Church, becoming patriarch in his schismatic organization.

Representatives of the Ecumenical Patriarchate have clarified that they consider Philaret to be the “former Metropolitan of Kiev,” but he and his organization continue to consider him an active patriarch, with jurisdiction in Ukraine.

Constantinople’s statement also appealed to all in Ukraine to “avoid appropriation of churches, monasteries, and other properties,” which the Synod of the KP ignored in today’s decision.

The KP primate’s abbreviated title will be, “His Holiness (name), Patriarch of Kiev and All Rus’-Ukraine,” and the acceptable form for relations with other Local Churches is “His Beatitude Archbishop (name), Metropolitan of Kiev and All Rus’-Ukraine.”

The Russian Orthodox Church broke eucharistic communion and all relations with the Ecumenical Patriarchate over this matter earlier this week. Of the fourteen local Orthodox Churches recognized the world over, twelve have expressed the viewpoint that Constantinople’s move was in violation of the canons of the Holy Orthodox Church. Only one local Church supported Constantinople wholeheartedly, and all jurisdictions except Constantinople have appealed for an interOrthodox Synod to address and solve the Ukrainian matter in a legitimate manner.

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