Adaptation key in Russia

04 August 2011

MOSCOW: Consumer goods companies such as Reckitt Benckiser, Unilever and Heinz are adapting their strategies in Russia, which is widely regarded as a key market for future growth.

Reckitt Benckiser found Polish shoppers spend six times more on dishwasher tablets than their Russian peers, and thus launched an ad campaign in the latter country showing they increase the family time available to mums.

Another effort for Airwick also suggests using air freshener throughout the home and not just in the bathroom, as is the case for 90% of Russian households.

"We are launching a comprehensive brand campaign to raise awareness for Reckitt Benckiser in Russia," Andraea Dawson-Shepherd, RB's SVP, corporate communications, told the St Petersburg Times.

The company currently spends 12% of its €300m sales in Russia on advertising, in a nation where it is hoping to achieve a compound annual growth rate of approximately 15% in the near term at least.

Unilever has pursued a similar approach to Reckitt via an ad campaign for Rexona, featuring popstar Vera Brezhneva, after finding the average Russian uses less than one unit of deodorant a year.

"When advertising personal care products, we try to educate the consumer on the necessity of following the basic rules of hygiene," said Yegor Yevteyev, senior brand manager for Rexona.

PepsiCo has also been required to modify its model to serve the needs of Russian customers while resisting the widespread practice of discounting.

"The noncarbonated beverage business and juices ... is a gigantic market in Russia, bigger than the carbonated soft drink business," Indra Nooyi, CEO of PepsiCo, said. "We're going to focus on juices and maintain our pricing in the marketplace."

Elsewhere, Heinz recently reported that its eponymous baked beans brand now represents over 70% of its Russian sales, and receives more than 90% of marketing expenditure in the country at present.

"We're extraordinarily well-positioned to expand into new categories and to new white spaces," said David Moran, CEO of Heinz Europe. "We're supporting the Heinz equity in Russia with a strong media rate."

Data sourced from St Petersburg Times/Seeking Alpha; additional content by Warc staff