Brand Equity Aberrations: Heritage Brand Perception Effects in Russian Markets

Article excerpt

EXECUTIVE SUMMARY

Many scholars agree that vast and diverse Russian consumer markets are under-researched, and further conceptual and empirical studies are needed to better understand cultural issues and their effect on consumer behavior. This paper contributes to the exploration of cross-cultural communications and brand marketing in contemporary Russia.

This study represents a conceptual framework, continuing and enhancing prior research conducted by many scholars. Diverse environments and the fluid nature of Russian consumer psychology call for further brand marketing research to better understand and more accurately predict consumer behaviors, particularly those leading them from initial intent to actual purchase.

The paper analyzes links between tangible and intangible brand equity components to illustrate and explain the evolution of consumer psychology as the economy transitioned from Soviet central planning to the unique Russian model of capitalism. It is shown that in this transitional economy, consumers demonstrate a strong propensity to buy "heritage" Western brands, i.e., brands familiar to Russians during Soviet times, rather than "new" brands, which appeared on the market after the collapse of the Soviet Union. The concept of INverse BRAnd NOSTalgia (INBRANOST) is introduced to interpret certain antecedents of consumer behavior. INBRANOST is attributed primarily to consumers who spent their adolescent and adult years in the scarcity-driven Soviet society; were deprived Western brand experience; and now seek "retribution" through ownership of "heritage" brand name products.

The paper links consumer purchase intent to gender, age and culture-related matters. Capitalizing on existing theoretical and empirical research of Russian consumer ethnocentrism referenced in the paper, this study focuses on brand equity aberrations. "Heritage" brands enjoy popularity among wealthy and influential consumer groups and sell in Russia at premium prices. At the same time "new" brands gain market share at a slower pace and a greater advertising and promotional cost than those predicted by Western marketing models. Such brand equity aberrations are the subject of an in-depth analysis in the paper.

Keywords: Cross-Cultural Research, Russia, Brand Perception, Nostalgia, Transitional Economy, Consumer Behavior, Positioning Strategy, Heritage Preference Formation, Brand Choice.

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Russia is one of the countries where perception of many brands is strongly influenced by consumer cultural heritage. This view is consistently supported by studies of Soviet consumers conducted in the 1960s and '70s (Greer 1973; Barksdale, Kelly and MacFarlane 1978) as well as consumer research in contemporary Russia.

Rapid political and economic transition in modern Russia led to greater social inequality (Supphellen and Gronhaug 2003) and created a contradictory cultural environment. Highly uneven distribution of household income further increased societal stratification along multiple dimensions. This process exacerbated historical variations of consumer ethnocentrism and contributed to the formation of consumer subcultures based on wealth, regional affiliation, feeling of national identity, etc. (Thelen, Ford and Honeycutt 2003; Thelen and Honeycutt 2004; Anttonen, Tuunanen and Alon 2005). Published research also found that consumer ethnocentrism is affected by nostalgic feelings for the past: "firms need to be aware of and capitalize on nostalgia in Russia" (Thelen, Ford and Honeycutt 2003; 2006b). We will discuss this finding and examine its application in greater detail later in this paper.

Russian consumers are known to inconsistently and unpredictably respond to Western-style marketing campaigns (Wells 1994; Wells and Van Auken 2006), and this is not surprising. Cross-cultural miscommunications and heritage issues create incongruity between the brand perception intended by Western marketers and the one that is perceived by Russian consumers (Andrews, Durvasula, Netemeyer 1994), and cause poor correlation of brand product sales with investments in respective public relations and advertising campaigns in "enigmatic" Russia. …

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