What I Learned About Marketing in Serbia Last Week (Branding Critical for Emerging Markets)
As some of you know I’m engaged to be married this summer. My fiancé is from the former Yugoslavia, so I’ve been traveling there occasionally as the wedding gets closer. Which is how I found myself on a plane the Saturday before last, heading into Serbia for a week.
Former Serb President Milosevic had died a handful of hours before, so the plane was packed to the gills with journalists. BBC, CBC, CNN, you name it. I was the only journalist aboard from the marketing beat though .
In between meeting almost endless family members in Belgrade, Novi Sad, and the exceptionally lovely country town of Sombor, I slipped in a few meetings with marketers. Here are some quick notes for those of you interested in marketing in Eastern Europe.
-> “American” is not the fabulous brand it used to be. Most Serbs think of us as the folks who bombed them for reasons that remain somewhat confusing. Oddly, the state of Montana is not included in this dark cloud. Name a store or brand ‘Montana’ and product flies off the shelves.
-> Old is out. Chrome, pale wood, sheets of glass, and 1950s-style Swedish design is in. If you’re a 20-something, you wouldn’t be seen in a café that isn’t “modern” (and thoroughly un-Serb looking).
-> Coca-Cola’s promotional team have outdone themselves. You can’t swing a dead cat without hitting Coke signage and bottles of the stuff in vending machines and newsagent booths on every street corner. My favorite, a sidewalk café in Novi Sad that itself is a huge plastic Coke can complete with red tables and matching branded stools.
Pepsi is virtually invisible, although available. Red Bull is making headway. McDonald’s is barely there at all, although fast food loaded with sugar, grease, beef and/or potatoes is in fashion (one brand of potato chips advertises itself as “very very fast food!”).
-> A massive generation gap makes young and middle-aged Serbs (and probably these generations in all emerging capitalist nations) very different from their peers in more established markets. The following is my potted explanation, which no doubt some Serbs will take exception to:
If you’re 40-something, you remember your parents’ lifestyles of no-cost housing, relaxed work hours and easy-to-get (albeit low) pensions with longing. In contrast, you’ve spent your career battling 40% or higher unemployment, insane inflation, civil war and NATO bombing, and have worked two jobs just to pay the rent.
On the other hand, if you’re in your teens or a 20-something, the work world is glittering and thrilling. For the first time in 15 years, consumer goods are available and the economy is actually improving. In one small town, half the inhabitants making over 20k euros per year are still in high school.
Western companies and most Serb ad agencies are hiring cheap youthful Serbs like crazy because their work ethic is awesome.
In short, the older generation is exhausted, broke and just needs a rest while the younger generation is working their butts off to invest in a car, a computer and yes, a lot of Coca-Cola.
-> As Svetlana Kekic, PR Manager of Continental Banka, explained to me, marketing has only begun to gain respect as a business tactic in the past few years. Before, although a company might have a marketer, she (almost always a she) was more likely to be chosen for her looks or familial relations than for any skill or training. And in fact, only in the last decade was marketing taught in college.
The hottest area of marketing now is nope, not the Internet. Branding rules. Branding is the killer app that rocks the Eastern European business world.
Why? Consider how many new companies, stores and products are swamping in to take advantage of this emerging market. Almost every brand is a new one, almost every one jostling for attention with hundreds of equally new-to-market competitors.
In Svetlana’s case, the bank she works for has managed to prosper through two rounds of M&As that have winnowed the pack of more than 100 banks to now just 41 (and more winnowing to come) through the power of its brand. Unusually, Continental Banka has had a PR department for nine years, and the name recognition in the marketplace is now paying off.
Unfortunately most of the brand marketing I saw for other companies of every type imaginable consisted of the put-a-pretty-girl-in-the-picture variety. No one’s explained to the wanna-be brand marketers of Serbia that cheesecake is an indistinguishable commodity, not remotely related to brand-building.
Anyway, Saturday night, just before I hopped on my plane to get back home, I had a quick last meeting, this time with Mr. Nikola Orlovic, the recently retired head of economic analysis for the Serb treasury.
I asked him what some of my new friends, who are beekeepers in Sombor, could do to move their stockpiled honey into new marketplaces. (Their local farmer’s market can’t possibly absorb the quantity of honey produced.) Should they consider exporting? “How would that work?” I asked.
“Yes,” he advised me (through a translator.) “However, the first thing they need to do is to make a brand presentation. A brand is essential for everything.”
Ok, I agreed, what next? “The Internet is very powerful for marketing,” he said. “Had I heard about that?”
Why yes, I think I had.