Marketing
Marketing
A distinction needs to be made between consumer and industrial sales. For the former, brand recognition and pent-up demand often precede the Western firm's entry so that little promotion has been necessary to date.54 In a 1990 study combining recognition and esteem to rate 400 Western trademarks in terms of brand power, CIS, Hungarian, and Polish adults all put Sony, Adidas, Ford, and Mercedes-Benz in their top-ten list. On average the Hungarians, Poles, and former Soviets recognized 250, 175, and 100 brands, respectively.55 However, pent-up demand will not last forever; and some companies, such as American Express, Procter & Gamble, and Levi Strauss, are advertising to build brand recognition and image. Large Western advertising agencies, such as Young & Rubicam and McCann-Erickson, and market research groups, such as Gallup, have established offices in HPEs so that they will be ready when there is more than an ample supply of goods and services to sell.
Industrial sales are a different matter, since they are made to state enterprises. Occasionally, a Western firm has an industrial product or technology that is so well known or so desired by HPE enterprises and FTOs that no marketing effort is needed to secure sales. Rarely, there are also firms that manage to develop business by simply sending catalogs, price lists, and specifications. However, most firms have to develop an active approach to creating demand.
A major means of creating demand is through exhibitions at trade fairs. The fairs sometimes are general in nature and sometimes specialize in products or goods from specific countries. Some Western producers have acted as consultants, giving lectures and demonstrations to officials of research institutes in HPEs, which has led to personal contacts critical for sales. Many firms believe that they must send managers to visit HPEs at least twice a year if they are to maintain market growth.
Fiat's experience is typical for large industrial sales: Fiat signed a contract for a $1.3 billion automobile assembly plant in Poland; Fiat then set out to find subcontractors to supply most of the parts. There is usually considerable publicity attendant on the signing of large contracts, with the result that potential subcontractors may easily contact the prime contractor to solicit sales. The ultimate suppliers are often companies from a number of different countries.
Thus far this discussion has highlighted marketing opportunities for Western firms within HPEs. Because most HPE enterprises lack marketing expertise, there are also opportunities to represent them in the West. Many large Western firms and important entrepreneurs, such as PepsiCo and Ar-mand Hammer, began promoting HPE products years ago. But other niches undoubtedly exist. For example, Steven Leber is a rock music impresario who has arranged tours for the Rolling Stones, Def Leppard, Jesus Christ Superstar, and other shows. He has successfully represented circuses from the former Soviet Union by arranging bookings and transportation, promoting them, and finding corporate sponsors for them.
A distinction needs to be made between consumer and industrial sales. For the former, brand recognition and pent-up demand often precede the Western firm's entry so that little promotion has been necessary to date.54 In a 1990 study combining recognition and esteem to rate 400 Western trademarks in terms of brand power, CIS, Hungarian, and Polish adults all put Sony, Adidas, Ford, and Mercedes-Benz in their top-ten list. On average the Hungarians, Poles, and former Soviets recognized 250, 175, and 100 brands, respectively.55 However, pent-up demand will not last forever; and some companies, such as American Express, Procter & Gamble, and Levi Strauss, are advertising to build brand recognition and image. Large Western advertising agencies, such as Young & Rubicam and McCann-Erickson, and market research groups, such as Gallup, have established offices in HPEs so that they will be ready when there is more than an ample supply of goods and services to sell.
Industrial sales are a different matter, since they are made to state enterprises. Occasionally, a Western firm has an industrial product or technology that is so well known or so desired by HPE enterprises and FTOs that no marketing effort is needed to secure sales. Rarely, there are also firms that manage to develop business by simply sending catalogs, price lists, and specifications. However, most firms have to develop an active approach to creating demand.
A major means of creating demand is through exhibitions at trade fairs. The fairs sometimes are general in nature and sometimes specialize in products or goods from specific countries. Some Western producers have acted as consultants, giving lectures and demonstrations to officials of research institutes in HPEs, which has led to personal contacts critical for sales. Many firms believe that they must send managers to visit HPEs at least twice a year if they are to maintain market growth.
Fiat's experience is typical for large industrial sales: Fiat signed a contract for a $1.3 billion automobile assembly plant in Poland; Fiat then set out to find subcontractors to supply most of the parts. There is usually considerable publicity attendant on the signing of large contracts, with the result that potential subcontractors may easily contact the prime contractor to solicit sales. The ultimate suppliers are often companies from a number of different countries.
Thus far this discussion has highlighted marketing opportunities for Western firms within HPEs. Because most HPE enterprises lack marketing expertise, there are also opportunities to represent them in the West. Many large Western firms and important entrepreneurs, such as PepsiCo and Ar-mand Hammer, began promoting HPE products years ago. But other niches undoubtedly exist. For example, Steven Leber is a rock music impresario who has arranged tours for the Rolling Stones, Def Leppard, Jesus Christ Superstar, and other shows. He has successfully represented circuses from the former Soviet Union by arranging bookings and transportation, promoting them, and finding corporate sponsors for them.
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