Brands in Russia should have a good future

Brands in Russia should have a good future
In the world, there are many brands, which produce not the most healthful products, but which are estimated at billions of dollars. Tobacco brands also cost a lot, but this did not protect their producers in a number of countries from the actual ban on the right to use their intellectual property. About whether such a scenario could affect other consumer goods in the future, Business Guide talked with the executive director of RusBrand Alexei Popovichev

BUSINESS GUIDE: How does RusBrand refer to the widespread practice of depriving tobacco companies of the opportunity to use the brand on packages?

ALEXEI POPOVICHEV: You know, a year ago I participated in one conference devoted to trade. There was a professor from Australia who said that this measure had no serious effect on reducing the number of smokers. At the same time, there is absolutely clear evidence that the illegal market in Australia has increased. Therefore, it is necessary to look at this problem first of all in terms of what the packaging gives to the consumer. If it is depersonalized, then, firstly, the consumer will not have information about the product, and secondly, of course, the level of competition will decrease. The same can be said not only about cigarettes, but about all other goods. After all, the brand is primarily a means of competition between products in one product category, and not a means of promoting the entire category. Just like advertising. To say that advertising promotes the entire category of goods is unfair, because if so, then such advertising can not be called effective, since the producer should primarily promote its product.

BG: Do you think that when a state introduces a ban on branding a bundle, should it pay compensation to companies that it effectively deprives of the possibility to use its intellectual property?

AP: As far as I understand, there has not been such a practice in the world yet. But we must remember that in some cases, the value of brands may overlap the value of tangible assets owned by companies. The price of the brand includes those funds that have been invested throughout its history. Therefore, some kind of compensation in such cases, probably, should be. But in any case, the prerogative of making a decision on this in the competence of a particular state.

BG: What other consequences for the consumer will be the unification of the packaging, except that he will lose the opportunity to receive information about the product?

AP: Unreliable packaging can provoke the growth of counterfeit products. Because such a package is easier to make and fake. After all, a product with a brand is not only a means of information, but also a means of protection. The permanent consumer of the brand knows where it has different graphic elements on the packaging, what it feels like, etc. Holding it in your hands, you can determine whether it's original products or not.

BG: It is known that part of the cost of a product is the brand itself. In a situation where it becomes invisible, is there no danger that the consumer will choose cheaper products?

AP: Of course, the cost of advertising and marketing are in the cost of the product. But the brand is not only an advertising investment, it is also a guarantee of a certain quality of the goods and those innovations that the manufacturer has invested in it. However, in the absence of a brand, the idea of ​​the quality of the product begins to blur. And in Australia, as I saw from the statistics, it was just the beginning of consumer migration towards cheaper products. Including products of lower quality.

BG: Members of your association that produce not the most useful products, somehow already expressed concern about government initiatives against their colleagues from the tobacco industry? Are they afraid of becoming the next victims of tightening?

AP: We have already seen in the Health Ministry's strategy on healthy lifestyle that there are ideas of limitations, including the place of sale of "less useful products" (I prefer to follow the terms used by the World Health Organization). There are there in relation to them and advertising bans, at least relating to children. It seems to me that such measures are less effective than working to promote a healthy lifestyle, explaining how to eat properly, developing physical education in its various forms, and explaining the benefits or harms of a certain way of life. Moreover, many responsible companies have long taken on voluntary commitments in the field of marketing in the framework of industrial self-regulation. As they say, the forbidden fruit is often sweet, therefore I believe that the propaganda of a healthy lifestyle can bring much more than mass prohibitions.

BG: Are all those restrictive measures that we talked about that could affect the investment climate in the country?

AP: Discussion of any regulation that is prohibitive and incurs additional costs, of course, affects the attractiveness of certain markets. Especially when such initiatives appear suddenly. Of course, investors are looking at it. A couple of years ago in Russia, for example, there was an initiative to introduce an excise tax on sugar. And here I would like to draw attention to the experience of Finland. Literally two years ago, there was canceled the tax on confectionery and ice cream, which was introduced to make the local population healthier. So this tax was canceled by the decision of the European Commission, after the Finnish manufacturers applied there. They confirmed the main fact: the introduction of a tax not only did not help to reduce the overall consumption of sugar, but, on the contrary, it began to grow.

BG: To what extent do you think the Russian authorities understand the importance of brands?

AP: I think that the state is gradually coming to understand the important role of brands in the economy. This is evident from the fact that now, for example, the tourist brand of Russia is being developed, at the state level, the brand "made in Russia" is being discussed for the promotion of domestic products abroad. That is, at the level of the government there is a definite turn towards understanding the value of the brand in the modern world. This gives me reason to think that brands in Russia should have a good future.

Rating (5)
<< Back to the list


Your E-mail*
Type the letters:*