Message from the President

The following article was published in Target Marketing, November 1991.

Direct Marketing, Soviet Style

Breaking into the Soviet market requires commitment

Priamoi [direct] marketing - a concept so new and foreign to the Russians that the term doesn't yet exist in Soviet business or consumer lingo. It is an idea particularly strange to Soviet consumers, accustomed to decades of rigid central planning, with no advertising whatsoever.

Today, acquisition of foreign goods via mail order still seems an impossible dream, for many reasons: not enough hard currency, an inconvertible ruble, no credit cards to speak of, corrupt postal officials who inspect all foreign parcels (and pocket anything worthwhile), an inefficient communications system in which letters arrive by chance, fax lines are perpetually busy and telephone books don't exist.

The list of obstacles to doing business with the Soviets seems endless. So is it worth a direct marketer's efforts - especially postcoup, with republics breaking away and Gorbachev and Yeltsin struggling for power? Even if Gorbachev leaves office or a union treaty goes unsigned, the answer is yes - as long as you are in the Soviet market for the long haul. With time, patience and the right strategy, you will unquestionably reap rich rewards from the 285 million plus Soviet consumer market.

Undoubtedly, a country with the riches of the U.S.S.R. - its size, geography, educated population, natural wealth and determination to remain a major power - is not destined to stay in its present state of backwardness. It will inevitably embrace modern business and economic development. Gorbachev's ideas of glasnost and Perestroika - as the squelching of the attempted conservative coup demonstrated - represent an unstoppable trend toward integration into the global economy.

In all the republics - but especially in the Russian Federation (RSFSR) and the Ukraine - a new infrastructure is in the works. It is one which guarantees that all the direct marketing essentials - improved communications and postal systems, credit cards and, most of all, the unleashing of pent-up consumer demand for foreign goods - will be in place in the not-too-distant future.

But how should direct marketers respond to current Soviet market conditions? The best place to start is so basic, it's often overlooked: You must first carefully target consumers' needs and understand their buying habits. This, of course, is more easily said than done in a country that extends over 11 time zones and has 15 diverse republics. But awareness of market conditions is vital for long-range success and early acquisition of consumer and business lists.

Among the things you need to know are the demographic distribution of the population in rural and urban areas, as well as by male and female, age, education, income and social group (the major groups are professionals, workers and peasants). If you know, the living conditions of families - average household size and contents, presence or absence of consumer goods, from food items to durables - then you know better what people need, want and can afford.

For instance, with some products, it might be best to target educated professionals in the RSFSR, the largest of the republics. With others, you might target workers in the Baltics. Farm products, for example, would be of greater interest to cotton growers in Tajikistan or farmers in the Ukrainian breadbasket. Differentiated analysis - depending on the region or republic; its economic and demographic composition; and its political risk and stability factors - is a must.

Successful direct marketers will be the ones who have a long-term strategy, who comprehend the complexity of dealing with the Soviet republics, and who can apply the right knowledge to understanding what the people can and will buy. Priamoi marketing can then become a familiar and profitable industry - Soviet style.

Deborah Anne Palmieri
Target Marketing, November 1991.