International brands have massively left or suspended their activities in Russia as a sign of protest against the war in Ukraine. Such a decision was made by the main offices of the companies independently or under the pressure of public and diplomatic opinion. However, there are those who continue to work on two fronts: they remain in Ukraine and finance racism. These are retailers, financial institutions and manufacturers of well-known consumer goods. MMR inquired about the position of the Ukrainian divisions of such companies, and also asked the opinion of experts regarding the future of brands in Ukraine from the point of view of marketing and communications.
Prologue
To be frank, when we sent inquiries to the addresses of companies or agencies representing their positions, we didn’t have high hopes for a positive outcome. Unfortunately, in Ukraine, handling crisis communications isn’t something that’s done well, with many opting to stay silent. We received responses from retailers like METRO and Auchan, but others remained silent. What surprised us the most was the PR agency representing the Danone brand in Ukraine. They declined to comment because we refused to provide them with an editorial text for preview, therefore, they couldn’t anticipate all the reputational risks. Dear colleagues, the reputational risks for the brand are already immense.
But let’s be consistent.
Olena Derevianko, partner at PR-Service Agency, Vice President of the Ukrainian PR League, PhD in Economics, Prof., Yuri Duma, Managing Director of the provid communication agency, and Yaroslav Vedmid, founder and CEO of Postmen, forecast the future of communications for brands remaining in Russia.
When silence is not golden
Olena Derevyanko
partner of the PR-Service Agency,
vice-president of the Ukrainian PR-League,
Dr. Econ. Sciences, Prof.
In most cases, Ukrainian representations of international companies are fully dependent on the policies of their headquarters and have limited room for maneuver. Publicly, efforts to persuade the head office to change decisions and practical actions by businesses to aid the country are well received. However, I believe that the vast majority of Ukrainian representations will not be very active in terms of communication,” says Olena Derevianko.
Indeed, this is what we felt in the responses from METRO and Auchan.
“We have repeatedly appealed to the French office to cease operations in the aggressor country’s territory, but currently, the decision has not been in our favor. We are not giving up and continue to send letters and hold meetings to stop the operation of stores in the territory of Russia as soon as possible. Meanwhile, the global leadership has decided to halt investments in Russia since the beginning of the war,” Ukrainian Auchan reported.
A similar position is echoed by METRO: “The METRO Ukraine team has clearly expressed its position on the necessity to close the business of METRO AG in the aggressor country, Russia. We have written an open letter to the leadership in Düsseldorf, and our position remains unchanged: METRO must leave the Russian market.”
Yury Duma
Managing Director provid
Yuri Duma speaks about how “head offices have backed Ukrainian representations into a corner: on one hand, audience attention is fixed on brand positions, and on the other hand, sales must be ensured, as business must generate profit.”
Retailers speak not only about profit. We were assured that they are actively assisting the Armed Forces of Ukraine, territorial defense organizations, and volunteers. Additionally, companies cannot close stores because thousands of people would lose their jobs.
Ukrainian representations of international companies are indeed in a very complex situation, where there is a decision from the head office to operate in Russia, pressure from fellow citizens to boycott such brands, and responsibility of the representations themselves towards employees, suppliers, and other counterparties.
“Recognizing Russia’s aggression and working towards closing business in the aggressor country is a new social responsibility for brands.”
“Choosing neutrality in communication to survive in this corner is not an option. Ukrainian representations need to take on all risks and either finally start expressing their civic position as they previously built communication through their social initiatives. Recognizing Russia’s aggression and working towards closing business in the aggressor country is a new social responsibility for brands. Brand citizenship, which involves companies participating in the lives of their audience, should not just be a trend from another report but a series of concrete actions,” says Yuri Duma.
Yaroslav Vedmid
засновник і CEO Postmen
Supporting his colleague, Yaroslav Vedmid states, “All international brands that have refused to exit Russia must realize that the pressure on them will not cease worldwide. Even if they haven’t fully felt the losses from trading in blood now, it’s only a matter of time. This is equally applicable in Ukraine. Currently, it’s crucially important for these brands to ensure the availability of certain goods, which might not be present in other networks due to logistical challenges. However, as soon as choice becomes available — and this is just a matter of time and logistical restructuring — all collaborating brands will experience significant customer and revenue losses, as well as toxic effects on brand health. What to do? Pressuring central offices to exit Russia is the only way. It’s challenging, as such actions are sometimes blocked at central offices, but there’s no alternative. Everything else is just urine therapy for a cancer patient.”
Word of the Consumer
In other words, each of us will vote, or rather, make our choice with our wallets. Which stores to buy from, whether to keep deposits and open accounts in a bank, which product to choose from the shelf. We were curious to hear assessments from companies about potential losses, declining sales in Ukraine due to decisions to remain in Russia. Simultaneously, we asked experts how to change consumer preference. Because it’s one thing to post on social media urging a boycott, but it’s another to consciously give up familiar things.
Yaroslav Vedmid is convinced that significant losses for collaborating brands are only a matter of time. “Once consumers have a choice, which may not be available due to logistical difficulties now, they will reject toxic brands in favor of others,” says Yaroslav.
However, on our part, it’s not all so simple. Brands have invested budgets in advertising and building the reputation of their products in Ukraine for years. Brand loyalty is not just about a situational choice of a yogurt bottle on the shelf but a deliberate choice and trust.
“The cancel culture, quickly catching on, is insufficient to achieve the desired result,” says Yaroslav Duma.
“To avoid repeating situations that certain brands and agencies have faced in Ukraine, the cancel culture, which quickly catches on, is insufficient to achieve the desired result. Firstly, we must continually support the information field regarding brands that continue to operate in the aggressor country and explain to the audience why supporting these brands is complicity in the war on the side of Russia. Secondly, offer an alternative as close in quality and emotion to what we shame, and conduct an informational campaign among the audience. Thirdly, continue to strategically work with consumers on emotional and rational levels,” says Yaroslav Duma.
“Consumer preferences are inert, and average buyers don’t always think about which company is the supplier of a particular product or service and what position it holds in the current situation. Therefore, additional efforts should be made in terms of both state regulation and public initiatives to shift consumer preference,” concludes Olena Derevyanko.
Personal Position
How the professional community will react to pro-Russian brands, we will learn soon. Such companies are solvent clients for agencies, and in MMR publications, one can find many joint creatives and cases.
We asked experts if there would be a ban on cooperation with companies that remained in Russia in their agencies and received fairly clear answers.
Olena Derevyanko: “We have many internal ‘red lines’ regarding cooperation with organizations or individuals whose actions do not align with our values. Naturally, this blatant display of corporate hypocrisy will be taken into account.”
Yaroslav Vedmid: “We haven’t worked with any Russian companies since the beginning of the war, don’t plan to do so even after victory. We also won’t provide any services to brands that continue to operate in Russia.”
Yuriy Duma: “To create accurate creative, there must be alignment between us and the client, primarily in terms of values. With companies sponsoring the war in our country with their taxes, such alignment is impossible. Therefore, we don’t need to impose a ban on cooperation. Such a ban is entirely organic and is supported by the owner of agama, Andy Babin (communication agency provid — part of the agama group — Editor’s note).”
Epilogue
Communication cannot be silent or one-sided. It’s not the time for silence or requesting editorial text approval. It’s time to speak up and urge everyone around to support the position.
P.S. At the time of publication of this longread, Auchan had decided to cease investments and halt deliveries to Russia.
