12.10.08

Many Russian companies have resurrected Soviet brand names recently. Those brands call up positive associations among many in the Russian population and reduce advertising expenses for the item to zero. There are no more than 300 old brand names on the books at Rospatent, which has a total record of 360,000 trade and service marks.

Most Soviet brand names belong to businesses that use them or not according to the dictates of market conditions. “A brand is a nonmaterial asset that really costs big money,” noted Anastasia Ptukha, general director of the Step by Step agency, on RBC TV. “Our government has also thought that it would not be bad to nationalize the [Soviet] brands.” Defending national brands is a serious issue. The Russian government loses $21 billion per year because manufacturers of Kalashnikov machineguns operate with expired licenses.

Russians show a distinct preference for domestic brands of food. Western companies prefer to operate under Russian rebranding. An inconvenient issue arises when reusing Soviet brand names, however. The quality of the new product is often lower than the product in Soviet times. Ptukha predicted that the time may come when prerevolutionary brands names may become fashionable.

There remains a Western-oriented segment of manufacturers as well. Examples of these are Green Mama cosmetics (which has just opened a venture in France), Gloria jeans from Rostov-on-Don and Palmetta undergarments from Ekaterinburg. Experts say quality will take on increasing importance on the Russian market at the expense of fashion as time passes.

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Source: www.kommersant.com