MBS Blog

An in-depth and insightful look at the mortgage market in emerging economies of Central and Eastern Europe (including Russia & Ukraine),  as well as Central Asia by the European Bank for Reconstruction and Development (EBRD).  

In pdf format..a must read for anyone currently investing in real estate or securities in these markets or considering future investment. 

http://ebrd.com/pubs/legal/mit.htm

NOTE: The MBS referred to in this report are Mortgage Backed Securities and not MBS, Ltd. 

Anton Olff

As I wrote on 24 November 2008, the recession in emerging markets provides opportunities for companies to promote, establish, re-establish, and capture market share. The key is looking beyond the short term-which is painful for almost everyone at this moment- and focus on the long haul.

John Rose writes today in “The Moscow Times:” The looming crisis in Russia will cause many marketers to re-evaluate budgets, strategies and relationships. Although there may be many challenges ahead for companies as they face the prospect of slower growth and pressure on margins, there is a silver lining in that black cloud. During the last financial crisis in Russia, a decade ago, some companies took advantage of falling media costs and slow-to-react competition to capture market share and set the stage for strong future earnings.

There are three main opportunities for marketing during a recession.

Opportunity No. 1: Customers generally re-evaluate their brand loyalties during a recession. It is no longer business as usual. Many people will be looking for greater value as their buying power weakens. A recession breaks down barriers that make consumers otherwise resistant to new brand messages. This creates an opportunity for brands that have otherwise been unable to capture significant market share in a crowded category or one dominated by a larger competitor. If you are the No. 2, 3 or 4 brand in your market category and you have a good story to tell, this could be your best opportunity in years to relate your story and receive a positive reception. Reacting to the last financial crisis, Mobile TeleSystems continued advertising, while its competitor Beeline retreated. As a result, MTS substantially raised its subscriber base and overtook, Beeline, to become the top Russian mobile service provider. And MTS still retains the No. 1 spot today, despite Beeline’s ubiquitous advertising campaign.

Opportunity No. 2: Many companies will take a wait-and-see attitude during a recession. They will freeze or cut marketing budgets until they have a clearer picture of what lies ahead. This will have the effect of reducing media costs. The smart companies will become more aggressive while their competitors have their heads in the sand, and they can get more for their marketing expenditures. Now is the time to be creative and grab some attention for your company and brand. Establish yourself as a leader by staying visible through the media, promotion and public relations. Show the world you have a resilient brand and a plan for a sustainable future. Experience shows that market share gained during a recession will return dividends when the economy rebounds. Wimm-Bill-Dann continued to promote and expand aggressively during the last crisis, filling a vacuum left by international competitors, who were still licking their wounds. Today, they are the leading Russian producer of dairy and beverage products. Saint Springs is another example of a company that continued to expand its marketing programs while the market was still contracting. After becoming the leader in the bottled water segment, it was acquired by Nestle Waters in 2002.

Opportunity No. 3: Customers expect a deal during a recession. People know companies are under pressure and will expect them to react to the recession with superior products, special offers and better service to win their business or get them to buy. You don’t want to disappoint them. But unless you run a volume business where you plan to always be the price leader, you shouldn’t feel obliged to lower your prices to win business during a recession. Sure, discounts will move inventory today, but it may come at a high cost in the future through the loss of brand value. The key is to give your customers more rather than charge them less. Value is most important, not price. Expand product features, extend warranties, provide special financing terms and offer enticing rewards for becoming loyal to your superior brand. Electronics retailer M-Video owes much of its success to creative promotions it began during the last crisis to lure customers and build loyalty, which is a practice they continue to this day. Currently, together with Sony Ericsson, they are giving away a card that provides free cinema tickets for one year when you buy select mobile phones. Their customers will be escaping the Russian recession to Hollywood — at least in their imaginations — and will no doubt reward the company with loyalty and future purchases.

It’s easier, of course, to follow the market and do what the other guys are doing during a crisis — that is, very little. But with a better understanding of the short window of opportunity brought on by a crisis — plus a little chutzpah — your company could use this recession to build a stronger brand and a more profitable business in the near future, when Russia bounces back.

Anton Olff

Technorati Tags: recessionary marketing, emerging markets, market share, brand, Moscow Times, marketing budgets, Russia,

Shopping in Ukraine over the last few years has been a delight. Every day was a revelation, as new varieties of products and brands filled the shelves with the promise of more to come. That has all changed recently. While the array of products-especially food and beverage products-continue to arrive in stores, particularly specialty outlets, the pace has slowed considerably.

Technorati Tags: food, beverage, imports, Ukraine, brands, consumers, WTO, trade, retailers, Furshet, Tavier B, Ukrainian brands, Russian brands, confectionery, Coca-cola, marketing, advertising, contrarian, emerging markets,

Website copy for www.therapy-now.net, March 2012

Website development for Elephant Head Software, February 2012.

BOZONGO.COM being developed for launch, January & February 2012

MBS working as consultant on AparthotelAmerikano project December 2011