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Demand for Russian Industrial Products Low Low Low
The latest survey of market conditions by the Institute for the Economy in Transition shows falling expectations of demand for Russian industrial products, sinking to the low point of 1998. Head of the Institute’s market conditions survey laboratory Sergey Tsukhlo writes that demand is falling “increasingly intensively” and industry has already been forced to cut back on production. Even competitive advantages on the marketplace do not guarantee Russian enterprises growth in demand, or even steady demand, according to a “self-evaluation” by executives of several hundred Russian companies.
The main competitive advantage of Russian market on the domestic market was found to be, as it was in 2006, “lengthy ties with consumers.” That was cited by the greatest number of respondents in September of this year (61%, compared to 71% in 2007). Product quality was cited second, with 43 percent of enterprises considering their products “the best.” In 2007, 55 percent of enterprises believed their superiority. Other attributes of competitive advantage, such as “transport proximity to consumer” and “brand familiarity” have also fallen.
Brand identification is especially strong in heavy industry, construction and the food industry, but the situation is quite different in the forest industry and manufacturing. “We are obviously very far from establishing domestic brands of clothing,” writes Tsukhlo. Entrepreneurs are increasing looking upon “low prices” as a competitive advantage. That indicator rose from 28 to 32 percent since 2007. It is also the leading perceived competitive advantage on the world market, although that indicator fell from 52 to 41 percent since last year. Russian enterprises are feeling less secure on the international market. There, the “lengthy ties with consumers” factor fell from 52 to 43 percent and “brand familiarity” fell from 41 to 28 percent.
www.kommersant.com
All the Article in Russian as of Oct. 06, 2008
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Photo: Roman Yarovitsin
