From 1990 onwards, the Eastern European country experienced a moment of entry of brands and organizations; today, the movement is against
One of the most iconic images of the end of the Cold War is the gigantic queue of more than 5,000 Soviets in Moscow at the opening of the first McDonald’s store in the country, in January 1990. From then on, a period of entry for brands followed. Westerners in the country, a strategy supported by the US State Department.
Three decades later, however, the Russian invasion of Ukraine is now causing a contrary flow – European, American and Asian companies are paralyzing and even leaving the country after President Vladimir Putin’s intense offensive against Ukrainian neighbors. Spotify, PayPal, Nike, Boeing, Ikea, Microsoft, Apple, Google and WPP, one of the world’s leading media groups, have discontinued their activities on Russian soil.
Among the conflicts of recent years, only the one in Venezuela has caused a certain stampede of large companies – nothing comparable to current events.
What is happening now is a reflection of Russia’s relevance on the international scene and the field where the conflict is being fought, with observers and the full attention of the international media, according to Marcelo Boschi, PhD in administration, professor of marketing and branding and coordinator of the MBAs at ESPM. River.
“It is a much more relevant country and this makes the performance of brands more sensitive and visible than in others. Consequently, the negative impact of continuing to transact with Russians is much more significant and economic sanctions end up reverberating on these brands, which seek to defend themselves,” he says.
When comparing the current situation with other critical episodes in recent years, Roberto Gondo, professor of competitive intelligence and market in the Publicity and Propaganda course at Mackenzie, says that the media impacts were not so pulverized and publicized.
“The great fear of companies to position themselves and maintain their operations in Russia is to become allies or connivers with the situation that happens in Ukraine, which is very bad and in the media generated a media fragility in Russia”, he explains, remembering a example that has been widely used to illustrate the current conflict, the battle of David against Goliath. McDonald’s, by the way, remains there and has been the target of several criticisms and demands.
For Lilian Carvalho, marketing professor at FGV EAESP, the main reason is economic, before image issues. “In any war, in any conflict, company executives do an analysis of what is the risk of maintaining operations and possible scenarios. It is not very different from what happens when there is a flight of investors”. The sanctions and restrictions implemented by the United States, the European Union and Japan also tend to hamper the financial transactions of companies.
New global brand order
In addition, brands operate in increasingly sensitive environments with the advancement of social networks, which helps to accelerate charges for transparent placements in complex situations such as the current one.
Boschi recalls that today we are in a very different scenario than in the past, when brands were associated, for example, with the Nazi regime and the Second World War, such as Adidas, Puma and Bayer. “Participating in wars directly or indirectly will harm this new global order of brands”, he explains.
Lilian adds that there has never been a war of such proportions and in which social networks were so popular, widespread and with so many users. “Many analysts say that we are experiencing a war that is being fought in what I call the ‘metaverse’, which is the interaction between the real world and the digital, with no boundaries between the universes”. Hence, all the large-scale reverberation and decision-making.
Despite considering it important for brands to position themselves, she questions the real need for companies to leave the country, due to the impacts it can bring to ordinary citizens. In the Russian case, for example, a good part of the population has gone out to protest against the government and suffered from state repression that has not come from today.
“I fully understand the concern that it is more linked to the area of communication to respond to the desires of consumers, to position itself as an activist brand, but the marketer needs to think about why this can be seen as abandonment of vulnerable citizens who are living in the Russia”. She also sees the situation with the potential to generate a setback, when, for example, there were capitalist and communist brands.
Pressure on future events
Specialists say, however, that not all conflicts should demand such action and demand from companies, it will depend on the media power and the actors involved. “It will not be automatic, in the case of Russia it is a very big issue because it is among the 6 biggest global powers and many of these companies had structures there”, explains Gondo, from Mackenzie.
Boschi, from ESPM Rio, makes a similar analysis: it depends, because not every conflict will have the repercussion of the current one. “This event of the invasion of Ukraine is a geopolitically very important event considered one of the biggest war events of the 21st century”, he adds.
