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№1/2019


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DRINKS
Review of the Russian Beer Market
Research by the Company “IndexBox”
TEA & COFFEE
Review of the Russian Tea Market
Research by the Company “NeoAnalytics”
Review of the Russian Coffee Market
Research by “Credinform” Information Agency
CONFECTIONERY
Review of the Russian Market for Flour Confections
Research by the Company “Step by Step”
Desserts at Catering Establishments
Research by the Company “NPD Group”
MEAT
Review of the Russian Meat Market
Research by the Company “IndexBox”
DAIRY PRODUCTS
Review of the Russian Dairy Market
Research by the Company “Laboratoriya Trendov”
Branding in the Russian Dairy Market
Research by the Branding Company “Labelmen”
FAST FOOD
Nut Imports into Russia
Research by the Company “ID Marketing”
PACKAGING
Package Downsizing Trend in the Food Industry
Research by Independent Experts
FINANCE & LOANS
Leasing Market in Russia
Research by “Expert RA” Rating Agency
HEALTHY NUTRITION
Review of the Russian Market for Snack Bars
Research by the Consulting Company “Dvornikova & Partners”


Branding in the Russian Dairy Market

Research by the Branding Company “Labelmen”
In the routine categories of everyday products, such as bread, dairy, grains or sausages, branding is critically important. Products are purchased and consumed daily; brands are plenty, and there are few differences between them. Therefore success in the market requires a strong and attractive brand. To avoid becoming a donor to retail chains, relying on endless promotions, stable product quality is not enough: one has to create unique and, most importantly, emotionally appealing brands.
As joint research by “Motista” and “CEB” has shown, on average, unique and emotional brands ensure 50% higher customer profitability compared with average market offers. 
There are countless instances confirming said study results. For instance, one could have a look at the “Fortune Global 500”* rating, according to which the most profitable companies of the world have outstanding brands leading in their respective markets. One can also enter a local store and compare prices for leading brands and less successful players offering products with similar quality within the same category.
In product categories of impulsive demand (chocolate, soft drinks, ice cream etc.), prices for leading brands can be several times higher than the market average. In “boring” categories of everyday products (grains, bread, sausages, cheeses etc.), the difference is not as apparent, but it still matters: prices for leading brands exceed the average market offers by 20% and more. This ensures higher sales profitability and thus greater resources for brand promotion. This way, a company escapes the vicious “promotions = growth in sales; no promotions = reduction in sales” cycle and generates a kind of development flywheel instead: “emotional brand—growth in sales—growth in retail prices—growth in price margin—investments in branding—higher emotional appear in the brand—growth in sales”.
During periods of economic boom, successful brands grow faster than their competitors, whereas during periods of recession they fall slower. Now, one only needs to learn the secret formula for brand success, and the market is conquered. The sad truth, however, is that there is no such formula. The recipe of success is different for every project. In some cases, using relevant consumer trends may help, whereas in other cases it is product innovations, skillful work with distribution, or outstanding, attractive packaging design that may come in handy.
It is obvious that the whole complexity of the world cannot be reduced to a single formula, and it is just as unrealistic to build models which would ideally explain the majority of branding phenomena. And there is certain logic in this. As Edgar Peters has noted in his book “Chaos and Order in the Capital Markets”, if there were an ideal formula, it would have been discovered by this point. The market being “unknowable” ensures its vitality, as only in these conditions nobody could single-handedly obtain the world’s wealth. If this were possible, markets along with brands would cease to exist. 
Despite the uniqueness of every brand success story in “boring” product categories, there is a specific feature which is highly distinct, namely new brands gathering whole pools of awards at creativity festivals and competitions rarely ending up reaching success in cruel everyday operation in “routine” categories. And, on the contrary, seemingly indistinguishable brands without any festival awards tend to steadily dominate the markets.
Among the 20 leading brands in several “routine” categories in the mass market (without niche and premium segments), only one got a festival award for packaging design. Said sample could be expanded by dozens of other commercially successful brands, but the overall picture would not change. Commercially successful brands in these markets do get awarded at festivals, but extremely rarely. The reason is that the criteria for packaging design success at creativity festivals are vastly different from those that are necessary for stable commercial results in the “boring” markets. Therefore sales are often provided by brands other than those developed specifically for festival awards.
Let us examine several champion brands on the food market as well as important factors of their commercial success:
“Lamber”, semi-hard cheeses:
* introduction of a brand to a market with low competition and a high profit margin, having great potential for branding;
* a unique spherical shape, meeting consumer stereotypes on the ideal “cheeselike” shape of the product;
* a “cheeselike” name, mimicking names of European cheese varieties (Camembert) to a Russian ear;
* a concept of a European mono-variety trademark, original at the moment of introduction, the range being presented by the “Rossiysky” variety most popular in Russia; 
* Cyrillic writing of a European brand name;
* clear brand positioning in terms of target audience (caring mothers with average+ income levels).
“Belebeevsky Molochny Kombinat (Belebey Dairy Plant)”, semi-hard cheeses:
* stable high quality and product taste at an affordable price;
* clear product and price positioning;
* a diverse range of cheese varieties, including pressed cheeses along with the Tilsit group.
“Brest-Litovsk”, semi-hard cheeses and dairy products:
* stable high quality and product taste at an affordable price;
* clear product and price positioning;
* products meeting a relevant consumer trend (nostalgia for pre-revolutionary Russia, the great Empire);
* meeting two relevant consumer stereotypes at once: firstly, dairy products in pre-revolutionary Russia having been high quality; secondly, dairy products in Baltic states and Belarus having higher quality than in Russia.
“Svezhee Zavtra (The Fresh Tomorrow)”, dairy products:
* meeting the basic consumer stereotype on the product category: quality milk can only be fresh;
* clearly meeting the key demand of the target audience (young people with average+ income levels, million city residents): in order to be successful tomorrow, one has to care about their health by consuming quality dairy products;
* taking up an unoccupied semantic field, namely fresh and modern dairy products (confirmed by modern packaging types).
“Bol’shaya Kruzhka (Large Mug)”, dairy products:
* meeting the basic consumer stereotype on the product category: milk, quark and sour cream are products for the whole family;
* taking up an unoccupied semantic field: “as big as love” in a modern interactive interpretation (a refrigerator-shaped package with magnetic notes; no overused “cow feeding on a grassy site” scenery).
In order to achieve success in “routine” product categories, brands have to be emotionally appealing, relevant, and unique. It is especially great when a brand created also develops outstanding modern design and gets its deserved festival awards for that. However, the latter alone is insufficient for commercial success. Apart from original and attractive packaging design, success requires the brand to meet relevant consumer trends, specific demands of the target audience, and packaging standing out on a store shelf.

* http://fortune.com/global500/.

Irina Vedenetskaya,
General Director
Branding Company “Labelmen”

Dmitry Golovnev,
Marketing Director
Branding Company “Labelmen”

Яндекс.Метрика