THE MARKET |
|
| The republics of the
former Soviet Union represent an emerging marketplace of
more than 250 million consumers. Russia, with an area of
6.6 million square miles spanning 11 time zones, is the
largest country in the world and has the population and
resources to become an economy almost equivalent to the
entire European Community. This foundation, combined with
the new freedom of choice, high level of education and
relative sophistication of the Russian consumer, offers a
market unparalleled in its attractiveness and size. In general, the middle class is clustered around urban areas, making it very efficient to target and distribute to potential customers. The greater Moscow area has a population of about 11 million - larger than the Czech Republic - and the St. Petersburg area has more than 5 million inhabitants - more than in Denmark. |
According to a recent
study by McKinsey, the international management
consulting firm, at least 30 percent of the Russian
population earns more than the equivalent of $200 per
month. Given the low costs of subsidized housing,
transportation and energy, a high proportion of this
income is available for discretionary spending. The potential of the market, size and education of the middle class, lack of domestic production capacity, concentration of consumers, and the comparative cheapness of advertising have all led to several western companies targeting the market. These companies include some of the best-known names in the consumer products industry, including Coca-Cola, Heinz, Mars, Nestle, Philip Morris, Proctor & Gamble and Unilever. Savara Group, with its inside knowledge of the markets, distribution systems and consumers of the former Soviet Union, is poised to take full advantage of this burgeoning opportunity. |