Russia's got talent: why marketing capability matters in Russia
In Russia, the area of marketing capability has experienced a series of dramatic turns for the last twenty years. I previously directed marketing planning for an international FMCG company in Eastern Europe and the former Soviet republics, including Russia, and had the opportunity to observe many of these turns.
Today, marketing capability development occupies an important place for Russian companies who want to grow. What they’re faced with is a deficit of well-trained local marketing experts and business builders who encompass enough knowledge and diverse experience to drive growth. The story behind this gap has evolved over the last twenty years, where two distinct groups in the labour market emerged.
The first group is mainly comprised of a post-Soviet generation. When the Soviet Union collapsed in 1991, the economic system was altered and society experienced enormous change. Parallel to a bourgeoning market economy, new concepts, skills, and values emerged. One of these novelties in a country where car factories produced the same models for the last twenty-five years was marketing. Marketing, branding, benefit differentiation and positioning truly sounded like a form of alien communication. At this initial stage, when multinational companies started to arrive in Russia, there were not any local marketing experts available. These companies, such as FMCG giants Procter & Gamble, Coca-Cola, Unilever, and Mars invested in a variety of sources to train and promote local marketing experts because - in those days - companies deferred decision making to local markets. This means that in the 1990s many young, talented graduates of leading universities found positions in companies like Coca-Cola where they could develop fast and have the opportunity to learn the rules of business and marketing. These lucky ones climbed the career ladder very fast and found much opportunity to use the skills and knowledge they gained.
The generation of the following decades, which comprise the second group, was not so lucky. Most of the multinational companies, under the pressure of globalisation, started to curtail the power of local offices. In this new company structure, while global offices made important decisions and allocated budgets, the role of local offices was minimized to mere execution. Consequently, foreign companies in Russia stopped developing local marketing experts. It became sufficient to provide elementary training for execution. Naturally, this caused a deficit of strong local marketing experts.
Today, companies in Russia who want to further develop their corporate structure and culture need to make a decision about where their marketing capability will be sourced. In my opinion, they have three options:
- Recruit local marketing experts from competing companies
- Hire capable ex-pats
- Invest in developing the marketing capabilities of local marketers
From my perspective, the first two options are not sustainable. The local experts, who came from the first group I discussed, have always been well aware of their scarcity. As a result, commitment to a company from this group is hard to come by, with many ready to move on for a better package. Ex-pats are simply not familiar with the local culture and market – an appreciation of which is not easily or quickly gained. Moreover, they are not always ready to embrace local realities.
To me, investing in local marketing capability development is the best option for Russian companies. Up-front investment to teach your marketers how to do marketing at your company will produce a group of committed, motivated employees who are ready to market in a way that best fits the needs of both your company and the local market. A minority of companies, those who have already gone down the road of the first two options, understand that developing local capabilities is the best long-term choice. Companies such as the brewery Baltika, pharmaceutical company Promomed and financial corporation Uralsib have been successful in finding the right strategy and developing local capabilities. This being said, many Russian companies are still opting for hiring ready-made local or foreign experts at the cost of big compensation packages – but they are soon left wondering why their investment in quick remedies are not solving their business problems.
Russia has definitely got talent – appreciate the story of where Russia has been, think carefully about where you want your company to be and then better spend your money in strategically building local marketing capability that is tailored specifically to how you want your company to grow.
For more information about how Brand Learning can help you lift your organisation’s marketing capabilities, please get in touch. You may also like these films, perspectives and resources on Marketing Capability.