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Russian Marketplace - Essay Example

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Russian Marketplace

The positive side to the bakery/coffee market is it is a growing market in Russia. For an American keen on establishing bakery/coffee outlet in Russia, the difficulties may not be more than what you may encounter in any other growing economy.
The distribution system in Russia does not appear to be well-organized and there are queues to make most purchases. The trend is changing with budding entrepreneurs coming up with marketing skills that, given the political nod, could easily upset the lethargic traditional system (Smilor, Ray; 2002).
There are encouraging signs for anyone in America considering an entry into the bakery/coffee market in Russia. There is enormous potential for growth in this market. The annual per capita consumption of coffee in Russia is 500 gm as compared to 12 kg in neighbouring Scandinavian countries (Nestl to start coffee processing in Russia, 2004).
Statistics are not available for bakery items which comprise large range of products comprising cakes, bread, biscuits, and other savouries. However, there is the eagerness to taste new assortment of baked items. There are also trade fairs and exhibitions for bakery items. So it should not be difficult for American entrepreneurs to participate in these fairs and exhibitions and glean information for starting bakery outlets in cities like Moscow and St. Petersburg to begin with (Event Profile, 2010)
This does not mean that starting a bakery in Russia is a cakewalk. There are going to be difficulties and obstacles in the form of competition as well as other unknown problems. The iron curtain may not exist any longer. However, Russia is still going through teething problems and the transition to a free market is experiencing a pull between traditional radicals and budding entrepreneurs (Smilor, Ray; 2002). You got to stick to the budding entrepreneurs.
While on the subject of bakeries, it is pertinent to make mention of Fazer's successful operations in Russia. "Fazer is one of Russia's leading bakery companies. During the past three years, Fazer's bakery operations in Russia have grown at an average rate of ca 40 per cent annually, and today they constitute 14 per cent of the Group's turnover. Fazer has during the past ten years invested ca 130 M in its operations in Russia and the Group's four bakeries in Russia employ 3 500 people. Fazer is a leading contract catering company in the Nordic and the Baltic countries, offering customers delicious food and tailor-made service solutions. The company operates in the Nordic countries, Estonia, Latvia and Russia." (Fazer's ...Show more

Summary

Russia has learnt some good lessons in marketing in the recent decades. But it is not easy to crack the century-old political system it has known and the subservience of its people to it. As early as the 1980s it would have been quite difficult for foreigners to consider establishing business operations in Russia…
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Russian Marketplace essay example
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