Absence of production on the target market. Dr Pepper doesn’t have manufacturing in Russia. The closest
manufacturing is in Netherlands, what is pretty far from Russian borders and
transportation costs will make the price of drink uncompetitive. The only
possible way is to extent the manufacturing to Russia. It can be outsourcing, but
the ingredients will brought from Europe. The way to relocate the plant to
other European country closer to Russia, such as Finland proved it’s
disadvantageousness in the case of, for example, Valio penetration on the
Russian market, as it is going to adjust the production in Gatchina near Saint-Petersburg.
Competitive advantages of Dr
Bad experience is also experience. The company already had its production in Russia, so it is already
familiar with specific of Russian business, legislation, taxes and it is not
the first time they have to find competent workforce here. It should help the
company to penetrate.
The image of the countries where the products
is habitual. It is well-known brand all over the
world and presented in mind of Russian customers as a product from abroad,
where the level of life is higher, people live in favorable social and economic
conditions and drink Dr Pepper. Also there is a fortunate legends connected
with the brand: the name the of The Beatles album «Sgt. Pepper´s Lonely Heart´s
Club Band» was initially with Dr Pepper, but not a sergeant
Pepper, but then was replaced in order not to break the intellectual property
rights of the company.
Fresh benefits of self- expression and
broadening the assortment. Now the income of
population is higher than in previous attempt and economical situation is
rather stable. It leads to higher level of consumption; people do not lose the
chance to taste something new. As we know the consumption of food-item brands
can also be demonstrative. The newness and freshness of the product against the
background of Pepsi and Coca Cola give a great opportunity to consumers for
self-expression, identifying him or herself with brand which image is new,
unusual, unique and fresh.
The brand already has awareness in Russia.
To sum up the
competition is still hash and the pressure became even harder. But it has a
great potential of differentiation from other cokes, has a fresh image
preferred by consumers and can pretend on the leading position on Russian
P Russian market is of the most investment
attractive, but at the same time Russian market has always been estimated as risky
for foreign investments and as too unpredictable. The high level of corruption,
absence of independent courts, unfavorable conditions for entrepreneur activity
and low level of corporate culture lead to distrust to our country. The simple
example of such unpredictable behavior of Russian Government is increasing the
insurance fees, which caused concealment of operations and incomings, after
that the fees were decreased again.
E Economical growth is
accompanied by some decreasing of share of poor people in Russia, but at the
same time the social inequality is increasing. The main thing in economical
policy of RF that there are two goals of our economy: active growth and
extermination of poverty, but there is no point that the difference between
social levels must be controlled. Any way for Dr Pepper penetration on the
Russian market is enough to meet the named economical conditions, moreover to
compare it with the times when Dr Pepper was trying to catch some market share;
it can be identified as favorable conditions for penetration.
S There are some tendencies that
should be taken into consideration before planning the penetration in order not
to be surprised during the process. On the other hand it can seem too obvious
for us and unexpected for foreign companies. In spite of wide-spread belief
that Russia is drinking alcohol country and smoking a lot, there is a clear
trend to a healthy way of life and healthy feeding; especially it became
popular in big cities where a great range of various healthy foodstuffs is. So
it means that informational pressure in the most populous places must be harder.
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