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CULTURAL ASPECTS AND THE CONSEQUENCES FOR THE INTERNATIONAL MANAGEMENT EDUCATION OF MARKETING IN EX-SOVIET BLOC COUNTRIES

Denis Goussarov

Introduction

Despite the growth of the omnipresent global consumer culture and internationalization of management and marketing education, there remain significant differences between how marketing science is studied and practised in Eastern and Western Europe.

Considering the rapid diffusion ofWestern consumerism in the previously centrally planned, heavy industry-focused ex-Soviet countries since 1991, one would expect the international marketing model that has worked so well in the developed Western countries to have been adopted immediately by the emerging businesses without the need for many changes. Since Western Europe is home to some of the strongest schools of management and the brightest advertising networks in the world, one would also naturally assume that the new generation of East European marketers should focus on copying the international marketing best practices available there in order to capture the market share in their home countries. It would also seem rather unnecessary to reinvent international management systems for countries that are only located a three-hour flight away.

However, even now multinationals looking east or East European businesses looking west for the purpose of extending their brands often face some unexpected challenges in making the transition. Issues include a lack of enthusiasm for standardization or even a comprehensive breakdown of communications. While marketing professionals from the established and the emerging European economies use the same terminology, the meanings of much of the shared language can be very different and, as a result, both parties often approach their roles in different ways with fixed mindsets.

For example, in Russia, using public transport to commute or drinking beer on a night out is seen as ‘un-prestigious’ or outright ‘cheap’, and it is the ‘correct way’ that one consumes alcohol rather than the amount that is consumed that prevents a hangover next morning. Historical circumstances under which the Western brands entered the markets have come to define consumer benchmarks which are very different in Western countries: Irish whiskey is more popular than Scottish whisky in some of the Balkan markets and Volvo cars stand for ‘sportiness’. Consider that instant messaging is overtaking e-mailing with Generation Y: how should a ‘traditional’ e-retailer such as Amazon send promotions to its customers if they stop checking their e-mail inboxes? Or should e-vendors more actively promote mobile payment platforms in the emerging markets where ownership of credit cards is well below the European par and a large proportion of communications in these markets is already carried over the mobile network because the dated Soviet fixed telephony infrastructure was not up to the requirements of the modern world? These are just some of the very obvious challenges that marketers face in Eastern Europe when trying to create brand-to-consumer connections and planning their investments into various communication channels.

To appreciate this phenomenon, this chapter looks at reasons that lie in the deeper cultural context, including the education system, infrastructure legacies of the centrally planned Soviet era, how marketing careers developed after 1991, and the opportunities available to marketing professionals in today's marketplace. The final part of this chapter focuses on three key challenges that multinational enterprises face when trying to maximize the impact of a brand in Eastern Europe.

The arguments put forward in this chapter are based on personal empirical experience of living and professionally leading and developing Eastern European marketing teams over the last twenty years. The examples I use to support my arguments come from consumer businesses and consultancies in Russia and the Commonwealth of Independent States (CIS) where I have worked as Managing Partner of Marketing Traction International Ltd, an independent UK-based marketing boutique consultancy that focuses on helping blue-chip consumer goods multinationals realize their strategies and improve efficiency of their consumer communications in Eastern Europe.

Ex-Soviet bloc cultural and institutional context

Secondary school system

Our educational background plays an important role in our professional lives. Even before they even start their marketing education, all East Europeans come through eleven years of a secondary schooling system which leaves a very specific imprint on the way their minds are trained to work. Although governments have been undertaking continuous attempts over the last few years to modernize the secondary education curriculum and bring it more in line with the best Western practice, it still remains similar to the old Soviet one.This means that there are dramatic differences between East and West European schooling in several aspects.

General education

The Soviet system was a highly successful one for the purposes of general education of the broad population: according to a UNDP 2009 report, all of the major countries with literacy rates of over 99 per cent came from the former Soviet bloc. In contrast, the UK, France and Germany all shared twentieth place with Albania. Despite all the economic, political or cultural limitations of the Soviet system, its general education system continues to provide a solid literacy foundation for the whole society.

Soviet-style education is good at teaching students a very broad and general perspective. The breadth of curriculum covered in East European schools cannot fail to impress a Westerner even today: 17 to 18-year-olds complete their secondary education having studied eleven subjects and with marks in more than four of them that are roughly comparable with the three or four A level grades that students receive, for example, in the United Kingdom. Effectively, they continue to study more subjects for longer, and as a result a typical East European student will be more aware of basic facts in significantly more areas of knowledge than a Western student.

However, in order to achieve this knowledge, the student will be required to simply memorize many more facts than an average West European school leaver: starting from all the key geographic locations around the globe and names of all the major scientists in physics, chemistry and biology to the core content of classical literature in Russia and internationally. Eastern European secondary school pupils are still required to read dozens of literature books and will have learnt off by heart the names and works of classical Western writers that even most native language speakers will not have heard of by this age. However, despite this wide knowledge, simply memorizing facts does not necessarily ensure their appreciation or even understanding, especially if it is done at a relatively young age.

Technical bias

Another important difference is that the Soviet education system that continues to influence the capabilities of school leavers today is the continued focus of studies on technical subjects. The compulsory secondary school curriculum, covering seven years, includes all three science subjects (as separate subjects), mathematics and IT. This bias is a stark reminder of the heritage of the Soviet Union as a ‘country of engineers’ who were trained to join the different branches of the oversized heavy industry. Even today you can see the consequences of that heritage when Russians use technical jargon routinely in everyday interpersonal communications, for example, when men are talking about cars. Russians also remain generally more willing to master for themselves many of the technical tasks in their daily lives, are more likely to go ‘DIY’ than call for a professional's help around their households, and even tend to study user manuals and technical specifications of their consumer appliances in great detail. In summary, they are much more like James May, the Top Gear host, than the other two!

Lack of specialization

The flipside of the broad secondary education and technical bias in the former Eastern European bloc is the delay in taking a specialization until post-secondary education. In comparison to the more specialized Western student, the Russian school leaver will not be as proficient in their chosen field of study as they cannot elect subjects to study at school. While the breadth of knowledge of a university applicant in Russia is above that of a Western student, the depth of knowledge in their proposed major is below the A level requirements necessary to enter, for example, a British university.

Little historical focus on studying management and marketing disciplines

Management and marketing sciences are very new disciplines for the ex-Soviet bloc countries: demand for management in the Western sense was limited in the Soviet days as most of the management tasks then were about administering orders through the hierarchical bureaucracies. The ability to sell had no use in a system in which eternal shortages of consumer goods were ingrained and centrally planned for — they were perceived as unimportant downsides of superior industrial power and total employment.

There was also little need for persuasive communication as there were few discussions and debates under the one-party communist ideological system. In the educational arena, study of communication sciences was either limited to academia or to those individuals who were preparing for jobs in international relations. As a consequence, communication disciplines such as advertising were almost totally absent, with a few exceptions to build up mind awareness of highly discretional services such as insurance. The bulk of mass media communications was informed by the party line and in a more or less open way carried ideological propaganda based on a very limited number of factual sources which were censored by the Party. Such an approach did not help to advance humanitarian studies and consequently the Soviet system left no academic or higher education infrastructure that could be used as a base to jump-start marketing and management studies after 1991.

Creative expression skills did not develop either: while the numbers of technically orientated professionals in the ex-Soviet bloc have always been relatively large there were very few people employed in the creative industries. Soviet art was tightly controlled by the Party: Social Realism was the single dominant school of thought in all the aspects of culture. Through its single-minded support of the Communist ideology, Social Realism suppressed the development of any of the skills necessary to enable a truly creative expression. As creative innovative ideas are a cornerstone of marketing and advertising, little infrastructure was built during the Soviet era to develop these skills.

Underdeveloped infrastructure

Another important consequence of the Soviet system was its underdeveloped infrastructure of sales and communication channels. Before 1991, various Western sources estimated that the number of stores per capita in the Soviet Union was about a third of that in the West and that these stores were predominantly unsophisticated, small state-run general-purpose shops. Modern retail formats such as convenience outlets or supermarkets were not present and this retail distribution infrastructure for the sale of consumer goods had to be built from scratch after 1991.

As far as communication channels are concerned, these were generally limited to a few mass media channels only. The Soviet system generally tended to broadcast much fewer messages than the West but took care to ensure that each one of them would reach as broad a segment of the population as was feasible. Therefore, having a few tightly controlled mass media communication channels was preferable to having many channels that could convey contradictory messages and stir up unwanted debates. Fewer media channels meant they were easier to coordinate, had broader coverage and cost less for each communication contact. Mass media such as TV and radio fulfilled most of the system's communication objectives and meant that there was no incentive whatsoever to create targeted or innovative media. Other communication channels in Russia were left disadvantaged in many ways: the postal system was slow and unreliable, the fixed phone lines were seen as a luxury and were available for mainly higher ranking officials, there were almost no sites for outdoor advertising and very few glossy magazines, etc. As a result, the Soviet system did not leave a good legacy for the new consumer society from the media development point of view as companies could not use the Soviet media to deliver creative messages in a targeted manner as is common in Western societies.

Consequences for the development of marketing skills

While one could argue about the relative merits of continuous broader general education versus the depth provided by earlier specialization in secondary school, it is clear that the Soviet system is definitely less successful in training people to think analytically — a critical capability for marketing managers. The technically skewed Soviet system de-emphasizes development of analytical skills and the broader approach leaves less time for analysis: the facts to remember are many more and the truth is seen to be more absolute. Critical thinking, analysing, experimenting, arguing and creative skills also develop less effectively under the centralized educational system where there exists a single set of approved school books for all subjects. Compared with the West, in East European schools less time is devoted to learning how to search for information, consider the contradictory opinions, evaluate different options, experiment with hypothesis, take decisions under uncertain circumstances and observe feedback — the skills that we would summarize generally as the ‘ability to learn’. As a result, the capacity of East European students to research and study independently is weaker and this has profound implications later on during their higher degree studies and subsequent professional careers. This lack of training on how to learn is very evident in the ‘soft’ humanitarian science areas such as marketing and management.

In summary, with respect to marketing, there was no education infrastructure, no creative talent, very few shops and no targeted consumer media in 1991 when the Soviet bloc collapsed and the consumer mentality was introduced into its composite countries.

The development of marketers since 1991

Much has changed since 1991 in the former Soviet Union economies: consumer goods are in plentiful supply, highly targeted magazines occupy supermarket shelves, marketing professionals are in high demand and marketing and management education is extremely popular. However, today's educational system and the marketing infrastructure retain strong imprints of the Soviet past and one generation later it is still proving difficult for the former Communist countries to abandon their cultural context roots and grow professional marketing talent with skills that are compatible with Western standards; that is, professionals who are able to come up with original communication messages, target information at specific audiences, deliver relevant messages via most relevant channels and generally follow the learning cycle through experimentation and feedback.

When the major Western multinationals started selling high-quality consumer goods in Russia after 1991 they faced a difficult challenge: they could not recruit local talent, there were no local marketers or even sales people available. The companies had little choice but to focus their recruitment efforts on attracting graduates with a working knowledge of English as the key hiring requirement. Many first-generation marketers in ex-Soviet bloc countries graduated as teachers, interpreters or specialists in foreign relations. The companies then trained the new recruits to their own professional curricula using a variety of on-the-job and classroom techniques. The major consumer goods Western multinationals that had strategic long-term interests in the ex-Soviet bloc markets such as Proctor & Gamble, Unilever and Philip Morris were among the first companies who adapted a two-pronged approach of building their brands and developing their marketing talent at the same time.

The marketing education that the locals received from the multinationals was very pragmatic and down to earth: most of the skills development was happening on the job and was aimed at specific company priorities. While more traditional ‘Western’ graduate recruitment programmes that specifically targeted graduates with a high potential to learn but with little or no work experience flourished in later years, the company-specific on-the-job development schemes supplied a significant proportion of marketing talent in the main post-Soviet countries after 1991. As a consequence, compared with the developed Western countries, many Russian-speaking marketers still strongly associate themselves with one or another school of marketing thinking that was defined primarily by the practices of the company with which they started their careers.

Meanwhile, the smaller companies and local businesses that did not possess the capabilities to grow their own talent resorted to hiring their lead marketers from one of their larger multinational competitors with a strong reputation for talent development. The local companies do not contribute a great deal to the development of marketing thinking or practices: they tended to take a much shorter term view of their businesses and consequently preferred not to get involved with training or graduate development programmes. However, this approach meant they usually paid a premium for the ‘stolen’ cadre and caused overheating of the local marketing talent market.

Recognizing the sharp growth in demand, almost every higher education establishment in the ex-Soviet countries started offering new courses in marketing and management. While the few universities that taught economics or communications pre-1991 now offer marketing courses, they are too few to influence the whole system and the overall quality of local marketing education could at best be described as very varied. Only twenty years has passed since marketing became recognized as a profession and an education subject in the ex-Soviet countries and there are still very few local academics who are able to develop and teach marketing and management courses in a quality way. In addition, cases of marketing practitioners having gone back to share their knowledge and teach at universities are almost non-existent — the mostly state-funded higher education system cannot come close to matching the salaries that businesses are able to offer to senior marketers . While many local universities have started to cooperate with Western business schools for marketing and management training, due to the high demand and relative short time scales many of the Western schools in such partnerships do not rate highly even in their own countries.

As a result of all the above factors, the quality and content of the marketing and management education today in the ex-Soviet bloc countries varies significantly and many professionals lack elements of fundamental academic knowledge.

Marketing careers today

In today's economies, the demand for marketers in the former Soviet countries still significantly exceeds the supply. This has several important repercussions for the local marketing careers.

Comparing the recruitment agencies data from the UK market and with our own observations from working with numerous marketing teams in Eastern Europe, an average marketing career in the ex-Soviet Union develops at a much faster rate. Marketers in these countries tend to spend less time in each of their roles than a professional in a more developed market. However, in consumer goods marketing it usually takes between several months to a few years for the business results of a marketing activity to become clear and measurable, and East European marketers who change their roles more frequently than their Western colleagues will have had fewer opportunities to understand the results of their management decisions and learn from evaluating the results of the activities they planned.

During their accelerated careers, East European marketers also work in fewer roles at each professional level and practise their skills with fewer companies than their Western colleagues. They therefore have less exposure in their shorter professional life to different approaches to marketing and selling, get a less thorough understanding of fewer product or service categories and thus have a lower breadth of their organic marketing knowledge. As a result, such marketers tend to have less perspective and think more one-dimensionally. Indeed, compared with their Western colleagues they have less first-hand knowledge of marketing cases that come from other industries or product categories that could be reapplied to the current brands they are responsible for.This lack of cross-fertilizing knowledge can also impact their innovation capabilities.

Third, in such a large and fast expanding consumer market as Russia is it is entirely possible to have a successful marketing career without ever going through the experience of living abroad and practising marketing in a different country. There are several important advantages that the marketing managers gain from international assignments (e.g. an added cultural perspective; better understanding of how global consumer trends work and how they spread; and a deeper appreciation of the suitability of different marketing tools to societies with various levels of economic development). All these factors help professionals take a more strategic view of their daily marketing jobs. We have worked with many local senior marketing managers of large organizations who have never lived abroad, have never worked in a developed, stable and more competitive and sophisticated economy and therefore lack a comparative perspective of the marketing context. Lack of experience in a more developed market also makes it difficult for younger managers to appreciate the potential intricacies of their product as it is developing and getting more sophisticated.

Young marketers as well as many other business managers in a country such as Russia nowadays face an important career choice: they can select a fast-track Russia-exclusive career or alternatively they can choose to spend extra years in international locations to learn their profession in more depth. Pure economic motivations dictate that most marketing professionals choose the first option and, as a result of the historical cultural context and their educational background, their fast but one-dimensional career many end up having significant gaps in their professional skills development.

Another important factor playing against the local marketing professionals in the East European countries is the legal and tax system that to this day remains generally unsupportive of businesses or at best geared to favour larger companies. Marketing in the West is traditionally a discipline that relies to a large degree on many self-employed freelancers who specialize deeply in various creative fields. The Western market for communication agencies is usually very fragmented and diverse too — combining large networks with smaller hot-spots. In a developed Western market clients always have a choice of going to a larger agency and getting more comprehensive client service or working with smaller boutiques who are often more creative and efficient. The situation is different in Russia and its neighbour countries because the legal and tax systems make it less complicated for an individual to go into employment rather than to set up his or her own small business or work as a self-employed freelancer. As a result, much fewer marketing and communication professionals come up via the non-corporate career paths and less creativity and innovation is available on tap from freelancers who in more developed markets have the deepest specialized knowledge in their respective fields of knowledge.

The marketing challenges facing multinational enterprises

These differences in the cultural context, current and legacy infrastructure and professional education create particular obstacles to a business that tries to sell their products or services in ex-Soviet bloc countries. For the sake of further analysis, we have categorized these challenges into three types:

• Challenges related to the lower breadth of knowledge and lack of multidimensional perspective. As an example, we have highlighted a case study which involves a global brand needing to be localized to improve its appeal to the consumers in one of the developing East European markets.

• Challenges caused by insufficient depth of local professional marketing knowledge. These are often encountered by expatriate managers who are posted to the former Soviet countries in order to deliver ambitious business objectives but face major problems with recruiting, leading and training their local teams.

• Challenges requiring poor analytical and innovation skills. We will draw on our experience of delivering innovation in both product and marketing communications for a number of consumer goods businesses across Eastern Europe.

The above classification is, of course, a simplification of what we often find when working with our clients. Although we have highlighted below some examples of the typical business challenges that marketers face and the techniques they use to address them, there will usually be elements of all three challenges with a degree of overlap. Our approach at Marketing Traction is to use a proprietary training toolkit comprising a range of ‘Lego blocks’ of people development methodologies, some of which are so fundamental for creating contextually relevant marketing solutions that we tend to use them in almost every case. However, as business requirements differ and fall roughly into the three above categories of breadth, depth and analytical skill our emphasis on certain methods to find a solution will vary too.

The solutions that we suggest below are based on the evaluation of actual business and people development programmes that we facilitated for a number of multinational and local businesses. We cannot disclose their specific names or business results because some of our more strategic recommendations have implications for the businesses that extend for more than one year and all the projects are covered by the confidentiality agreements. We will be as specific as possible within these constraints.

We evaluate our work in three principal ways: with the project sponsor versus the briefed objectives; according to the participants' feedback on the degree of newness and usefulness to their daily jobs; and versus our own internal standards of the innovativeness and efficiency of our recommendations. Combined together, these three evaluation approaches allow us to distil a number of must-have training and development methodologies that we would recommend any organization use to address the typical challenges of marketing skills development in Eastern Europe and other developing markets.

Challenge one: breadth of knowledge and need for innovation

While using consultants or any outsourced resource is not usually considered an effective way of doing business in Eastern Europe due to mainly tax reasons, we have several times been invited to assist local teams with the adaptation of global brands to the local context and consumer needs. Typical challenges in this situation are mostly twofold: to preserve the consistency of the global brand proposition (‘look and feel’) while making it relevant and appealing to the local audience. The reason that we are invited to help in these cases is the lack of the necessary breadth of experience and perspective in the local marketing teams to achieve both tasks simultaneously. Marketers often fall into the trap of either ‘painting by numbers’ and executing the international brand communication campaign guidelines to the letter but failing to make the brand relevant to the local consumers, or totally changing the brand essence and making the brand appear inconsistent and even schizophrenic to any consumer who has travelled internationally. Either extreme has costly consequences, especially for premium brands with international distribution that targets the more internationally aware consumer.

An effective approach to this challenge is to help the local managers define and then interconnect the three main pieces of the puzzle: the essence of the brand proposition, relevant local insight and innovative (often technologically new) means of communication. While some technologies may be introduced into other markets first, there are still many opportunities for businesses to create a competitive advantage by being the first to ‘cascade’ them into Russia.

We achieve ‘deep dive’ into the essence of the brand and use local cultural benchmarks from other categories to help kick-start lateral thinking. Establishing benchmarks from other categories is necessary as perception of even the most global brands varies significantly in the emerging markets due to historical factors: for example, Mercedes could be a benchmark for ‘safety’ and Danone could be perceived as a benchmark for ‘innovation’ although it operates outside of the high-tech industry.

We generally run the adaptation projects as a series of cross-functional workshops: in fact it often happens that employees from functions outside of brand management have a better understanding of how the brand is perceived and how consumers interact with it in the real marketplace. We often find that those employees who are normally at the ‘frontline’ of sales or work in research roles and who interact regularly with consumers have the most interesting insights as to what is relevant and what is not.

In the course of the workshops we tend to provide lots of examples of marketing communications from different categories — until the quantity leads to a quality leap. It's important to overcome the initial resistance of ‘what's in it for me?’ and to continue feeding information to the participants until they come to understand the relevance and thinking ‘if they can do it here then I can do even better in my business’. On the other hand, the moment must not be missed when the participants have enough information to start the ‘informed brainstorming’ and are ready to put the various pieces of the information puzzle together. Normally only two or three ‘big ideas’ come out of a workshop, while often a number of other ideas are generated they tend to be secondary in significance as they do not communicate the brand essence holistically and could not be rolled out across various touchpoints. It should be stressed that the ‘big ideas’, although informed by a multitude of examples of different categories, channels, consumer behaviours and technologies, should be selected first and foremost on the criteria of being ‘on-brand’ and ‘on-target’.

Providing the examples and managing the necessary time for the knowledge to accumulate to achieve a qualitative leap helps overcome the usual temptation by participants to achieve innovation by ‘thinking hard’ but doing it literally ‘inside the box’. We always find that taking a broader perspective and working cross-functionally helps tremendously to be more innovative while the ideas created from one functional silo often appear rather mechanical and rarely end up at the top of the list when the participants rate them later.

Rating the ideas is a separate exercise that we often do with the key managers rather than involving all the participants: the key is to understand how the innovative ideas answer the core business objectives while making sure that they reflect the brand strategic vision. Participants usually need a ‘cooling-down’ period before any follow-up actions and the rating process is therefore better managed separately.

When completed properly, the adaptation challenge leads not only to selecting the most locally relevant communications from a pre-agreed menu but also to the creation of new ways to engage the brand target audience. These are mainly based on using local behavioural insights which are always specific to the local market. These behavioural variations allow for making the brand communications richer while preserving the consistency of the main brand idea. Based on the local benchmark brands and the behavioural variations it's usually possible to divide the market into new sub-categories. Working to those new segments often produces innovative results and helps to achieve stronger stand-out of brand communications from the competitive clutter. A broader spectrum of activities and touchpoints that a brand can use means better choice for the businesses and on-going learning for the marketing managers.

Challenge two: depth of knowledge and how to increase effectiveness

When a Western expat manager joins his local team he or she has a number of challenges: on top of a different language being spoken and widely varying educational and cultural backgrounds that need to be overcome, there are also differences in the way of thinking, and lack of understanding of each other's perspectives. Local teams will often have a valid point about local adaptation but may not be able to put it across in a way that is understood by the expat manager. However, the expat may struggle to convince the locals to think more laterally and use his or her experience as the local team would simply not possess the equivalent depth of knowledge expected in the West and the Western analytical approaches would not be familiar to them.

We are regularly asked to facilitate marketing development projects when a new expat manager tries to deliver a change in the team and improve business performance at the same time. We call this the effectiveness-driven challenge and the set of methodologies that we use in these situations is based on our cross-cultural experiences and ability to put together teams of mixed nationalities who have both deep professional knowledge and diverse personal cultural exposure.

In the case of a new expatriate marketing manager, external consultants are usually called in to ‘mediate’ between the expat and his or her marketing team and the primary challenge is to ensure sufficient information flow to understand each other's position and properly communicate their own messages. In the current business environment there is rarely much ‘fat’ left in marketing departments for change management projects and the consultant may therefore be performing as an ‘interim manager’ offering an extra resource that also helps to establish new ways of working.

However, this change can only be achieved by combining training or coaching, aimed at improving interpersonal communication, with business improvement techniques. To address both the business and the interpersonal side of the challenge we always use real business cases and actual business objectives to provide training by way of on the job rather than classroom — essentially blending business development with skills improvement training.

At the start of our projects, even though we are asked to deliver a change project, we often prefer to do desk research rather than initiate new marketing studies. There are several good reasons for starting the project in such an ‘economical’ way:

• First, most reasonably sized consumer businesses in an emerging market post-Soviet country will have plenty of qualitative and quantitative data available. The issue is not so much in getting more data in but in interpreting it in a systematic way in order to translate it into meaningful information, insights and arguments. We often routinely find that a lot of data is left unanalysed and insight is not communicated properly or acted upon.

• Second, in a situation when no research on a critical subject is immediately available and there is a real need to initiate a study that will provide direct answers to the business challenges, the marketing managers initially need to formulate these challenges clearly. During our workshops we always formulate a ‘hypothesis’ of how brand performance should improve after the marketing intervention and this hypothesis makes the research brief much clearer and the whole research project more productive and easier to manage.

• Third, it is the time issue: apart from quick gauge qualitative studies, all research projects take many weeks to set up, implement and report.This is usually too long to fit into the timeframes of the change management transformation so we either do the research ‘in parallel’ to prove and substantiate our working hypothesis, or revert to in-market testing instead. If the brand strategy is clear and translated into locally relevant expressions as we described above, it is often quicker and cheaper to conduct several in-market tests to decide which activity or channel is the most effective to deliver the strategy rather than research all the options from scratch. Real-life testing is often our preferred way not only because it saves time and costs (versus classical research) but it also provides much better reflection of actual consumer behaviour. Not even the best arranged simulated market research can re-create the multitude of different contextual factors realistically enough; research participants will always know that they are not spending ‘real money’ at the back of their minds and resulting predictions will differ from their actual buying or consumption habits.

• Fourth, evaluation of specific touchpoints and activities is often difficult or impossible using the classical research or brand performance monitoring tools due to the large scale of such research: it summarizes the impact of many factors but gets very complex and expensive if a client is trying to evaluate a specific contextual variable. Reflecting this, many of our clients nowadays will set two types of performance indicators: what we call ‘quick gauge’ that are more operational, granular and can be tested for; and the second type which are ‘long-term/ strategic’ key performance indicators (KPIs) that are more large scale and get evaluated through brand research and standard brand performance monitoring.

It is often the ‘small-scale’ innovation that matters most to improving effectiveness: innovation in terms of not ‘what’ the brand is trying to say but ‘how’ it behaves and how relevant its communications are to the consumers. Our methodologies for ‘bringing brands to life’ focus on understanding ‘small but insightful facts’ about the local consumers: the way they shop, the way they decide, the way they consume, the way they interact with the brands and each other. On one hand, we try to make our understanding of the consumers deeper, on the other hand, it helps the brand to get ‘back to basics’ and become more effective by getting the most important ‘last mile’ of interaction with the consumer right.

Lastly, it should be said that in order to generate the ideas effectively, the managers need to spend enough time up front on understanding their brands in depth. While innovation is about broadening the horizons, in order to make the process effective it is important not to get carried away in the innovation process, or lose sight of the brand's vision and its core attributes. We often have to revise hierarchy of brand attributes to achieve that, separating the strategic drivers that need to remain consistent from the contextual expressions that could and should regularly change in line with the societal developments and local market realities to ensure that the brand remains relevant and appealing.

Generally speaking, the more relevant marketing communication and consumer engagement activations are the better the effectiveness of marketing investments. Our clients usually decide to invest in a limited number of the most relevant and most innovative activities that are predicted to deliver the best return. The rest of the ideas produced within the project that do not score highly on effectiveness or innovation criteria are bunched together with the two or three leading ‘big ideas’ to enhance them and make their reach and impact more comprehensive.

The other outcome of the effectiveness-driven project is a clear matrix of the brand objectives and the corresponding communication tools. This matrix helps the businesses in two ways: first, to prioritize marketing activities in line with the business objectives; and second, to systematize their knowledge about the effectiveness of various types of marketing activities and improve return on marketing investments.

Once the relative effectiveness of marketing activities has been assessed or estimated, the effectiveness project usually results in ‘culling’ of touchpoints and activities with the lowest return on investments: we tend to finish our engagements with a review of all the marketing activities that the business is running, not only the new and innovative ones. Surprisingly, based on a simple understanding of fit between the brand business objectives and the expected results, we are able to identify up to 20 per cent of activities that could be culled pending more detailed review or testing if necessary.

Challenge three: analytical skills and the ability to see trends, form a hypothesis and self-educate

In the present day, the key skill that marketers require more than any other is the ability to learn: although in principle marketing still remains fundamentally concerned with the same challenge of understanding and engaging the consumers, the speed nowadays with which consumer behaviours change is so fast that the marketers need to constantly learn and improve to stay in the game. We often see that marketers in Eastern Europe tend to stop actively learning at a certain point in their career and the ‘know-it-all’ feeling sets in. Many managers have been with their company and their brands for a significant part of the brand's life cycle so the prevailing wisdom tends to be ‘if it worked well before why change it?’ To overcome that attitude takes a good shaking up so that managers recognize the fact that the market context evolves fast, especially in their dynamic markets, and get ready to adapt the brand's expressions. There are numerous examples of how once market-leading brands have lost share significantly or even disappeared as their management stopped evolving their marketing mix in line with emerging trends.

While learning and innovating are absolutely key to brand survival in a dynamic environment, before the improvement process can be initiated an argument often arises as to how past activities should be evaluated and what exactly has been learnt. In modern marketing there are usually many factors that influence the effectiveness of engagement activities. In order to understand what worked and what did not and why, it is important to have very clear objectives for all activities and to look at each activity in great detail. While the temptation is often to throw the baby out with the bath water — ‘we tried it before and it did not work’ is one objection we often hear — such thinking often masks an unwillingness to dissect results deeper and learn from them.

Another argument to learning is ‘limited applicability’ or ‘my case is special’ and involves learning from other markets or categories. Such an argument can be addressed within the innovation process and achieving full buy-in even with limited self-learning is preferable to generating more innovative ideas that will not be seen as applicable.

Innovation in marketing is about the ability to cross-connect different ideas and this often implies that what worked in one category could work for a different one and help to clearly position the product and the brand. For example, promoting whisky in football-watching situations where beer is usually consumed helped one of our clients to grow the brand's volumes much faster than the category overall. Creating such innovative occasions requires lateral thinking and a preparedness to experiment and learn.

We prefer to use collaborative workshops as the process for generating innovative marketing solutions. The main advantage of such interactivity is that the participants work out ideas with their own hands. This helps us to achieve better rate of knowledge transfer and to overcome the resistance: address the objections as they come up and ensure stronger buy-in into the solutions at the end of the process.

To ensure that the participants learn from a broader perspective, we bring expert marketers from other categories and countries. For example, we asked our trade marketing expert from one of the most sophisticated Western European markets to do a case study on trade engagement for a Eastern European client who operated in a completely different category. The client, who had difficulties appreciating the benefits of cooperating with the low-skilled retailer's front-line staff, saw from the case study how the retailer's loyalty helped in the longer run and this provided a strategic direction for their approach to promoting retailers’ cooperation for several years.

Where possible, we also prefer to take managers out of their offices and into the sales environment when we do the workshops. It often helps to put product marketers in a service marketing environment and vice versa: a location such as a car showroom or even a simple hotel restaurant or lobby helps FMCG marketing teams to think of new ways to assess the quality of usage of their products and degree of engagement.

The most important method we use to help marketers establish themselves as continuous learners is to clarify the business objectives and the operational KPIs upfront when the activities are designed. KPIs are instrumental in all the organizations to improve performance but we often find that even simple steps such as clarifying activity objectives will help significantly. As it is often very time consuming to review specific performance metrics together with the client, our simplified exercises require marketing managers to review activity objectives and compare them to the strategic objectives of their business and their brands and check the planned activity mechanics against these activities. In most situations this simple exercise allows the client to easily and quickly identify the activities that do not support overall business objectives and consequently eliminate them from future plans or to re-engineer them. We often see up to 25 per cent of the marketing budget being freed in this way. The upside of this process is that the marketing budget can then be reused in better ways which automatically forces more and better innovation.

Finally, we try to encourage the desire to experiment and learn from successes and mistakes. When preparing our recommendations to our client we often leave two or three options of various engagements, avoid making the final call as to which one to use and try to set up a test instead. This will help the client to have a back-up plan and to learn from testing each of the options individually.

It often happens that carrying out post- or pre-evaluation provides valuable insights that help to slightly tweak the marketing activities in such a way that they deliver much stronger results. Looking into details of activities is a very cost-effective way to boost innovation. In other situations, big breakthrough ideas were born out of evaluations after a common major trend was recognized following the evaluation of a range of separate activities (i.e. different pieces of the puzzle come together to show a bigger picture).

Conclusion

In this chapter, we have put forward a twofold argument to examine how local marketers in the ex-Soviet countries could acquire the necessary depth and breadth of knowledge as well as flexibility of mind to tackle local consumer engagement challenges.

First, we noted that the existing cultural context in East European markets is still significantly different from Western countries. Consequently, any Western marketing campaign will require a certain amount of adaptation to the local cultural realities in order to run successfully in the East. Such adaptation should not necessarily involve fundamental changes to brand positioning but should rather focus on the ‘last mile’ of brand expressions and behaviours with which local consumers get engaged and interpret using their local cultural references.

Second, further complicating the adaptation challenge are the market-specific consumer behaviours . The fact is that in the modern world of marketing communications the overwhelming majority of successful brand engagements are based on insights about how people behave rather than simply what they believe. This includes ways they shop and pay for their purchases, the manner in which they consume the products, ways they commute, communication devices, software, search engines and social networks they use.

It is often a more difficult task for marketers to deliver a successful ‘last-mile’ adaptation of global brands to the local context than to launch new ones: they need to use all of their experience, depth of professional knowledge and apply superior analytical skills at the same time to perform this absolutely critical activity with proper consideration.