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and free broadcast quality video. free media. people to accept. a second wave of. the future of. nations. desperate to join up. criticizes the state's role in the russian economy. threatening the country's development speaking at the international economic forum in petersburg he reinstated his commitment. to drastic measures to create

a better investment. of tougher sanctions against syria. continues reportedly claiming at least sixteen. could be paving the way for. a business prospects with in on the money. hello and welcome to on the money where the business of russia is business i'm peter lavelle today we're broadcasting from the st petersburg international economic forum and we're talking about branding. to discuss branding i'm joined by robert sasson he is senior managing director at u.f.c. private equity also we have a cheese chairman of the board of the retail chain. and robert me he's managing

partner at robert may consulting group ok gentlemen we're in st petersburg and i'd like to ask you robert the first question you know we think of the term branding the country japan technology china the factory of the world germany precision united states maybe too much financial markets and you think of russia what brand comes to mind if if there's one if one does come to me what i can say about that i live here in russia for a long time and i've watched a lot of changes and improvements happen over the last ten to fifteen years if i had to describe russia in short i would say it continues to be a country in transition with considerable long term potential and a brand that's a brand that in my opinion it is because i'm not sure how well she could describe it because we won from one system and we went from one french ground and so we're in transition to i mean create their own model here in russia i would say it's not

going to match the model you'll see in other countries but what i can say it is it has considerable long term potential not short term but long term i think the vision is there the policy vision is there on behalf of the president's administration and the government is just the biggest step is taking this theory and policy and putting it into practice and that means changing the institutions changing the the infrastructure changing the mentality of a lot of the people that may take a very long time robert. find very you private equity when you look at investors what kind of brand do they see in russia what do you see is a plus a deficit or a void but sadly what we've seen recently is a lot of successes in the in the i.t. space in technology i mean take a brand which maybe is not fully associated with russia but i think is you know has very strong russian roots which is to go. to great companies to do very well into what i wrote program exactly more recently there's been an i.p.o. of the and they contributed great success. and were right for you but we're

actually an investor and i. think so but there are a lot of very very bright russians a lot of people who have very good computer skills software development skills and i think that is becoming a brand with russia you know you are you actually run the chain electronics. softwoods chain how hard is it in russia today two thousand and eleven to create a lasting viable valuable brand. i think. you can create a brand in a day you know because the station changes so quickly even in our segment before the chinese ask the almost lame thousand years you will open only just in chains no we just. be changing industry because of the impulse of internet because of the changes a customer have a source of people and people will want to fly and some some tells them they want to buy and for five years it will then your simple. looking of all the russias is

really unique solution especially in the infield if you're going to it was to some european company. one was a company which is the existence of a strong national brands in the scene local brands roads full signal still repeal all. the national brands he's used or in some women it's a little it's you know. you know when you're to europe you're striving to be the biggest in the best in your field have you learned certain branding take meek's from western maybe your western competitors or western peers i mean how do you when you look at your consumer how do you match brand and your consumer do you look at certain specific local issues that you can play upon or do you look outside and say hey well you know in britain they did this or in argentina they did that i mean is it a combination how do you do it. is always it's always trust it means a. really gustavus digital plea it. was

a trust in your books it was a trust and your so was. those who that excite also use. to deploy but it is easier to miss than to go to different stuff let's say electronics. you know where you do go where. you can where. for electronics people really need you to put a premium because if you can lose a lot of international competition it's a difficult to understand the quality. either but if you buy some. some stuff like that you know where you can. judge the quality and people. is the reason why is that are almost more strong brands in produce or simply in you may never go back to you over here i mean before the program where we were both discussing i mean if we look at an international audience international customers

there is i can only think of one international russian brand and i'm sorry it's twenty years out of the end of the soviet union and that's kalashnikov ok i can think maybe gentlemen can help me out here but i can't think of another brand here that it's a real deficit here but is it also an opportunity i think it's a considerable opportunity because. michael was saying there probably are some very good brands that are known here in russia and i know that there are some russian consumers that would really love to buy the russian ground instead of the foreign brands so they. just waiting for someone to please do something with them or improve them. russia has considerable potential because they can take the best practices from around the world they can apply them here in create brands and really export them out i mean they have really. it's on limit of what they can do and it's wide open and i'm sure in the world i mean sure there are some and some other brands that are being exported now but there's a whole broad range that's what i'm going to go over to also. i won't name the brand but i like. wristwatches ok and i came across

a russian brand name in here and it's absolutely exquisite maybe a little goudie a little bit too much this is right is say ok well this isn't perfect i should have worn my russian one but my point is that technologically speaking it's state of the art it can go up against any swiss brand but it's a third the price you can afford the price you know what it will what does that manufacturer how to do i'd like to point out their presentation that with the box where they sold it it was awful ok it wasn't attractive ok but the product itself was how do they get around that is it just investing the enormous amount of money or just to repeat what everyone else has done but i think it's a process that i mean it's going to take time in any case it's only been you know twenty odd years old the soviet way and what russian quality it was was not something that was was really considered to be good i mean i mean everything about the world you can see your goods for instance and watches but things are changing i mean we're seeing we're seeing russian russian brands which are now being. pushed

forwards in the west and and the association of russia with even western brands is very positive take chelsea football club i mean russia has done a lot for i mean said individuals certainly have done a lot to the russian. football and that's fantastic so you know there are certain things where you can definitely see there's been a lot of progress and in pushing a russian association you know if i'm going to you i mean do russian bring. i have to be better than the best to be equal i just gave the example of a wristwatch manufacturer i mean what do you have to do to get the idea of a consumer because yourself there's so many brands out there that people identify with i mean i'm holding a pen here again i won't name it here but i mean this is one of the nicer ones but most of them are just pure plastic but they still cost a lot of money ok you're buying the brand how hard it is is it for you in russian companies to really meet that challenge. group to bring the city of challenge

especially if you are just that is being goes away. easily union in the us money in terms of us those of people the feel little time business money. you almost couldn't support. in some areas which if you want and to bret's it means that people seems a. really think brands people. need a digital. entity move has a sense of most people. it's it's like it was before you know one little bit in a little what would you want to do to pay pretty lousy since those at all it's a business they still have a hammer and sickle i'd like to point out it's their logo here which again you know their place to a local consumer here because i do is a brand that is considered of value though it may be ambiguous to a foreign. consumer and i can tell you it is so i think it's an interesting story that they kept that that mark the hammer and sickle and they they kept it in after

the soviet union because it's so well known among russian citizens you know but i think that's an example of a brand that really changed and you know we're very sad because before when you thought of your of life you know i started to follow one could be for iraq's borders or something like that and now you have i mean is the international flights an hour flight are great but there are services very good very international standard and they have a lot of direct flights at places there either. are there old brands that we can actually be made international i think the first company that ever listed local on a local stock exchange was bolshevik biscuits yeah ok i mean well known in russia but that's a hard it's a hard sell on our side of course as you've never seen several i.p.o.'s of companies which have you know associations very close associations with russian names. and it is a bit off to that is a very hard sell but i think when people actually get into these companies and look

at the quality of management look at the fundamentals driving most companies forwards and the market they have in russia and continue to expand outside of russia you know we've seen quite a few successes going to it's really interesting across the top of the confectionery again if you translate it into english red october it still does not have an appeal to outside this because the borders of this country which i can attest the their product is excellent ok it is competitive but you know i mean they are there can you think of any brands outside of kalashnikov which is a real negative why am i going to have any other brand that can be sold outside of russia's borders using its name now. the name we named our aeroflot that's probably been home with a whole spread probably of what. you see in a t. a b. a b. you successful if you're in love it will store. almost the

whole program speech of the. part of one by one company. and some people. think it is a loony all right i'm going to jump in here we're going to go to a short break and after that short break we'll return discuss russia's branding state regard to. on. from. on. to foods. from. fish i am

familiar hop. cum wine stream cascading from mom slopes to view is mesmerizing am. mother's beauty brings death at a speed of more than two hundred kilometers from step bizarre the launch on our cheek. today children play war in the old keys me. in june nine hundred forty one these walls were the first barriers and announce the troops on their way to moscow. sunders embarrassed. one by one under siege this. was.

in the last. few simple words. but i'm not sure. welcome back to on the money i'm peter lavelle in this episode we're discussing branding ok robert i want to go to you we've heard a lot of good things about brining in the first part of the program but i always like to pour a little bit of cold water on things is really branding all that important when so many people in this country because there's a huge difference here is branding so important only just for a small small percentage of the population is it just for aspirational people and i

think many russians are really quite pleased with russian products that i mean depends what we're talking about and their aspirations i mean they want something of good quality that's affordable and there's a lot of historical introducing all aspects to some of the brands that have been around for a long time you like to reminisce about remember the old that is this wine this cookie whatever so i pulled. it out of the cellar the people are never going to reach a point where they can expire so the most expensive around with for them is not for the you know as robert is i think it's very interesting as they said in moscow they have this store just an old and ten years ago even five years ago i would say they know what no one of whom would never dare to know if you were. to our viewers as a huge huge department store dared to put a soviet almost replica and now you go there it's a very very popular rubber for the same reasons that you mention brands that you can do up with and reminds me of something very much when i lived in poland before

i came to russia was there was a me polska we movement among consider a producer to say look you've had all of the wonderful western goods the cereals the soaps the good paying what in the clothes but we had some good stuff here you see that trend there really picking up some steam here because a drink that almost disappeared here the kind of an equivalent of coca-cola or some kind of coal in the west came back i get. what i'm saying is more sophisticated russian buyers directly are actually beginning to understand the value of some of the older better russian brands and to see this in food products and drinks in types of beer. so definitely the question is whether these brands can mend be marketed outside of russia the success of not only not only been home market you know if i go to you i mean this could be a tough one in your russian soul and ask you the tough question here i mean russia's reputation is problematic in many parts of the world because of the soviet

past in some cases even before that i mean how does russia in russian companies get over that i mean its history i mean this is a market economy people are very very savvy here they certainly have the abilities and knowledge in now even money here i mean is is that kind of all the brand of russia is i couldn't be is that still a major barrier for companies that want to go beyond the borders to sell to consumers because it is a globalized economy and to be a global winner you have to go global. you can create brands only if you'll just as a strong. side each legion a. share of those. if you look at the world it's pretty clear the you know everybody in the russian well if. you will. was supposed program. if you show us some brands of exist. some brands in.

that people. even the broth even the western companies if you look in the bowl. like they do it all sort of. stupidity. it's a stupid law and you always need to clear. all those don't you michel felicia if you go on to me too but ok with you again you know i'm going to pour a little bit of cold water on this here i'm lucky to name the companies because i don't want to promote them and i don't want them to get angry with me at the same time with the same energy companies in russia that when there is a dispute with a neighboring country. i don't see that they put a whole lot of effort into p.r. and creating a brand you know one of the forward heyday of responsible corporate citizen i mean is when you get too big and too powerful is it is there a risk of being lazy and saying it doesn't matter because we're here and people

have to deal with this mean is that you think that any of the case and just how dangerous is it because it is dangerous i think so you're speaking more on russia russia as the brown noser bursts out consumer products because i consumer products i think it will take extreme a long time to have something very competitive in the world i mentioned the large energy companies they are directly associated with the russian state in some gas they're owned by russians but in that respect. it's true and it's very important because in russia it's a little bit different where you see the fine line between business and politics it's much finer in russia than it is in many other countries and you still have a lot of these companies that are speed owner of there's a high level of state participation so again on this transition i was talking about once a. we get to the point where there's more privatization when there's more institutions that are set up that are free better rule of law and conditions that are good for foreign investors then i think you'll start to see bit of a change in the mentality and basically how russia presents itself overseas.

i mean when you think about how do you think low i mean i mean small and medium companies have to go out of their way to make a good impression but let's go beyond that i have my of my since i actually sit on the board of one of the large state shipping companies in russia the executive and the director and i was brought on along with several other. independent directors to try and help help me with dealing with corporate governance issues and always the image of the company in all the markets and would try very hard to to improve that isn't the issue of what's the biggest barrier what's the biggest challenge you face from doing what i think the biggest challenges is there has been one of mentality that needs to change but again it's a question of time and i think you're generational but i think it will take us to that i mean i think it's you know i think it's going to be a couple of years but generally i think of the past you know ten fifteen years you see the love of a lot of progress and i think that's going to continue you know it will always go

back to this year and i in western media russian companies often get a bad rap certainly the russian state. how can the russian business in your opinion being a businessman yourself help improve the image of russia as a brand on the international stage because you know when a lot of critics said the west will look at banks to look at oil companies you know it's these evil institutions and things like that but as we've already pointed out on this program here there's not that much of people make that kind of differentiation what does business have to do to disassociate itself with government institutions and politicians you. usually want people seeing the ball as a company owned company. these shades these we leave to the experience if you come in or already in france look it was the french people or england you. experience on some of you and something brushing from the species or if you buy.

some items like japan this technique or. you'll. like. charles for the coolidge olds is i don't suppose a mission all but it. seems the only way how russia can it is very strong it's possible to be more but. really to build on it's not that there was a goal it's a. business as well as weekly that is strong business oriented for. tourists people who come in the shop who has been here. these weeks spent money will be quotable gunn people just impression a little more wells will do you not only consumables maybe it will be in order to build builds maybe it will be. it will be it. now what's be it's you know

like you see. what's going on national football you could call this program beyond kalashnikov here they found about this forum that we're out here how valuable is this forum in st petersburg because it's really a man so a lot of people here in the lives a lot of what i read in western media about media is about what interest there is in russia i mean there's this community and there are so many pavilions in this complex here it's hard to keep track of who's here and you can't meet everyone obviously i mean. are forums like this worth while why do you guys. i think he's actually on this program are going to get mad at and by this forum in particular has improved dramatically i would say six seven years ago was a completely different for i think twice there the guy. i mean the president said look this is going to be our forum and they showed a real commitment it's a great opportunity for networking it's it's quite impressive incredible you won't find a better forum i think than this to meet anyone who's either senior in government

are senior in business so fitting for with respect to the dialogue the ability to meet people face to face exchange ideas i think it's really quite good when you're transparent it's really you know for open access i mean you don't have. pretty much you walking by you can be where there is the president the minister the head of severson all whoever it might be and it's the access is really quite impressive we think over about and i am sure i do because there's quite a few of them but this is seems to be one of if it was just i mean i should live in peace by seventeen years so i mean here it is you know right now anyway but i i found that it's going to look bad oh yes and suddenly he did leave the organizers of trying very hard to make an international phone not only focusing on russia but on the international excuse me that he was very bad at them and trying to write high quality people from business obviously people coming into this and see what the president's going to say. and that sophie very important as well but would you say this forum is more business driven than politics and policy yeah i definitely

don't probably explains the attraction of the whole why did you come to this when you can do this for. the world to this former st petersburg. show you can truly. feel say complaints. i don't like to spend too much than facilities for people. you know. useless because it's useless to just spend time suitable to get by and to see if anybody. else is sitting here. with everybody. else to meet two days so we still most difficult to meet you you've got you've got people who can meet and while the rooms in the city you can see people will. when we come. up to me. you can also hear some really interesting use. of you the last word here what would you like to see change in russia over the next

five years when it comes to brand. the brand for the country. i'd like to see a really driven by business where it's less given by politics less driven by government but actually business setting the course setting the pace and then you'll get a feel for that this country really has made the transition and it operates functions like any other you know thriving any different than any other place in the world a right to move on out of time i want to thank all my guests here in the studio when i think our viewers for watching us here on the money see you next time in state charges.