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Marketing Strategies in Changed Circumstances: Observation from Farmers in Novosibirsk Oblast', Russia

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  • Jeremy Franks
  • Irina Davydova

Abstract

Recent changes in the food distribution and marketing systems in Russia are described. Findings from a survey of the marketing strategies used by directors of joint-stock companies (JSC) and private farmers in Novosibirsk oblast' to cope with these changes are presented and compared. These farmers have adopted different strategies. JSC directors withdrew from value-adding enterprises (VAE) complaining of poorly regulated markets — which remove incentives to create product distinctiveness — problems with bad debts, unstable markets and low profitability. As a result many JSCs have reverted to their core production activities, strategies that suggest they are prioritising longevity rather than profit maximisation. However, the larger private farmers, later entrants into farming and food production, had no apparent complaints in any of these areas. Unlike the JSC directors, they did not welcome more government intervention but wanted a stable macroeconomic climate within which to conduct business. To re-couple JSC directors with VAE and markets, the Russian authorities need to tighten regulation over competition, branding and food quality, and provide better access to market information. These changes will let the federal food corporations reduce their role as farmers, able to extract full benefit from investments made to create distinction, will develop their products and vertically integrate along the food chain.

Suggested Citation

  • Jeremy Franks & Irina Davydova, 2006. "Marketing Strategies in Changed Circumstances: Observation from Farmers in Novosibirsk Oblast', Russia," Post-Communist Economies, Taylor & Francis Journals, vol. 18(2), pages 227-241.
    • Handle: RePEc:taf:pocoec:v:18:y:2006:i:2:p:227-241
    DOI: 10.1080/14631370600619964
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    References listed on IDEAS

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    1. Max Spoor & Oane Visser, 2001. "The State of Agrarian Reform in the Former Soviet Union," Europe-Asia Studies, Taylor & Francis Journals, vol. 53(6), pages 885-901.
    2. Paul Caskie, 2000. "Back to Basics: Household Food Production in Russia," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(2), pages 196-209, May.
    3. Grigory Ioffe & Tatyana Nefedova, 2001. "Russian Agriculture and Food Processing: Vertical Cooperation and Spatial Dynamics," Europe-Asia Studies, Taylor & Francis Journals, vol. 53(3), pages 389-418.
    4. Harvey, David R., 2004. "Policy dependency and reform: economic gains versus political pains," Agricultural Economics, Blackwell, vol. 31(2-3), pages 265-275, December.
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    Cited by:

    1. Svetlana Golovina & Jerker Nilsson, 2011. "The Russian top-down organised co-operatives - reasons behind the failure," Post-Communist Economies, Taylor & Francis Journals, vol. 23(1), pages 55-67.

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