Changing Attitudes in Ukraine

By Oksana Monastyrska, Deputy Managing Director, The PBN Company, Kyiv

Ukraine’s stereotypical national mentality comprises a mix of industriousness, integrity and bravery combined with a certain reverie, romanticism and nonchalance.  While these sorts of generalized national characteristics are always slightly misleading, they do provide an interesting prism through which to look at how the recession is changing Ukrainian consumer values.

Recent research by GfK Ukraine and IFAK Ukraine sheds some light on this topic.  Both surveys show beyond doubt that Ukrainians are feeling the effects of the crisis - according to IFAK, 51% of Ukrainians have experienced a reduction in income, and 45% of respondents say that their living standards have deteriorated.

And as Ukrainians grapple with the uncertainty the crisis has brought, they are starting to leave the whimsy behind, reverting to the more “traditional” of those values.  The recession is bringing out the conservative side of the Ukrainian character, as economy, family, friends, work and health replace the romanticism and nonchalance.

As these traditional values come to the fore, Ukrainians are changing their economic behavior.  Only a year ago, when business was booming in Ukraine, it was an employee’s market. Today, with unemployment on the rise, there are often up to 30 qualified candidates for each vacant professional position.  Now no one is taking their job for granted, and Ukrainians are becoming less demanding of their employers - 51% of people are concerned by the prospect of unemployment, according to GfK.

They are also becoming more selective in what they buy, as well as when, where and why they make purchases. Data from GfK suggests that Ukrainians are increasingly economizing on fast-moving consumer goods, reducing expenditure on clothes by 56% and on food by 40%.  Consumers with traditional values tend to opt for well-known brands, preferring to patronize companies with good reputations that they can trust.  As a result, Ukrainians are now more receptive to messages emphasizing a product’s value, functionality and durability than those positioning a product as fashionable or cool.

Similarly with leisure activities - Ukrainians are now opting to spend more time with family and friends in ways that do not require unnecessary expense, and, according to GfK, expenditure on entertainment like theater and cinema has fallen by 45%.  They are eating in rather than dining out and watching videos rather than going to the cinema, and successful marketing revolves around ways to have fun for less rather than opportunities for glamorous nights on the town.

Now is the time for Ukrainian companies, and indeed for all companies operating in the Ukrainian market, to build confidence in their brand.  This will mean ensuring that they identify how the recession has changed appetite for, and expectations of, their products.  Then they will need to follow up with effective corporate positioning and CSR programs.  In essence, ensuring a sustainable message will require an emphasis on the core values of the product - and also a recognition of the core values which Ukrainians are rediscovering.

Possibly related posts:

1. IPO Pioneers: 9 in 10 listed Russian & CIS companies worth less today than at IPO
2. Ukraine downgraded to CCC+/C
3. Spreading Cheer and Spending Cash
4. [Great Soul Searching] Celebrating Magnanimity in the Crisis: #2 Gazprom Will Not Fine Ukraine For Violating Its Gas Contract
5. Celebrating Another Victory: IMF Approves Second Loan Tranche for Ukraine