Marketing assignment case

Identify and examine the key social-cultural trends, including demographic and lifestyle developments that have taken place within your chosen country over the past decade. When starting thinking about Russia in terms “what was changed in past 10 years”, the quick answer would be “a lot if not everything”. And in fact this level of change brings the main social difficulty, people are not able to cope with this rapid change that results in losing the old references, but not yet able to create the new ones (Sotkina 2010).

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But what was the main dramatic change? Russia has opened its borders to the other world in late 80s, but only in 2000s it starts trying to live in the global community as an equal member, not as a newbie. This openness showed the way of life other (mainly developed western countries) have, but if in 1990s people looked at this like an impossible bright toy, in 2000s people start wanting to live that way too. People have changed the values of life, having goods (read here the western goods) as an indicator of the social success and throwing away moral values (Sememenko 2004).

Also Russia changed the Spiral Dynamics level. In 1990s it has Red level, that is characterized with the “live today because there can be no tomorrow” (Beck et al. 1999), that was brightly shown by the “new Russians” development that is now gone away. In 2000s Russia has moved mainly to the Orange level, where still the personal interest is prevailing over the interest of the group, but the time horizon changed to have some more time in the future, not yet in generations (as Green level has) but at least the lifetime (Beck at all, 1999). The bandit’s (Red) psychology moved to the entrepreneurial (Orange) one. People start working to have better life in the future.

2000s showed very clear the high stratification in the Russian society. In simple terms there are 2% of people who can buy everything, 10% of people who can be called the middle class and are working to buy desired goods and others who practically have no chance to earn enough to have the actively advertized lifestyle. But establishing the consumer credits gave ability to buy goods people really not having money to buy those. That causes the consumer boom where for example people bought mobile phones that are more than their 2 monthly salaries, or buy the extremely expensive car having practically nowhere to live. Banks actively supported this behavior, making 25-50% yearly for the consumer credits. So people bought much more than they really can and had yet no moral protection against this.

The world economic crisis did not cause great recession in Russian economy itself, but cancelled a major percent of the western credits to the Russian companies and banks and also made oil prices 3-4 times lower than the peak ones (and oil and gas money are still the basis for Russian economy), that nearly caused the crisis like in 1998 (where ruble devaluation up to 2-3 times happened) but now devaluation was about 1.5 times only (Bogetich et all 2009).

For Russian society it again showed how quickly the situation can change and that there is no certainty in the future. Psychologically for the society it again moved the behavior to that we should get the money now and quickly, no savings, no RnD in the business, no business development, just cut costs and earn money on the quick and safe transactions. Demographically loss of certainty in the future turned to having less children and after some baby-boom in 2006-2008 the nation starts again decreasing in number of people (Mkrtchan et al, 2010).

But here were some positive moments, as imported goods start being much more expensive, Russian manufacturing and service companies took some price advantage. Having a lot of foreign goods available for more than 15 years on the market and knowing the success stories and problems, Russian companies started using the working solutions and advertize their goods as not having the general western problems. For example a lot of manufacturing is done in China for Russian companies, and also the locally produced food is advertized as not gene modified or grown with the damaging nutrients and thus healthier.

I would like to summarize the main trends: Openness to the global community brought extremely quick value change and layered the society dramatically. Availability of consumer credits first allowed people to buy desired goods they are not earning for, but crisis made this not so easy and showed the problems this behavior has. Psychology of time in the society moved from Red “here and now” to Orange “I can work to live better later in my life” spiral dynamics level reducing the criminality in the business. Russia still has uncertainty in the future and planning for the future and money savings are not in the trend yet. The speed of the changes is too high to make it comfortable for the people living here, but I believe that such changes are necessary to make Russia the full member of the world developed society.