John Rose - Founder
In the beginning...
• 1984 – Founded in USA
• 1987 - Merges with Parsons Friedmann & Central
(established 1949) to become Friedmann&Rose (F&R)
• 1989 – Brings Kodak to Moscow and becomes first
independent advertising agency to enter Soviet Union
• 1991 – Becomes Coca-Cola's first advertising agency in
Russia
• 1992 – Wins Sony from Y&R; Russia office "takes off”
Russia Market: No experienced labor pool; heavy
dependence on Boston office
In the beginning...
The Network Years.
• 1994 – Becomes part of BDDP (world's 14th largest ad
network)
• 1995 – Adds Bristol Meyers, Tag Heuer, SmithKline
Beecham to client list
• 1996 – Wins Samsung; forms PR business
• 1998 - BDDP absorbed by Omnicom and merged with
TBWA; F&R regains independence
Russia Market: Payroll, rents and overheads swell!
The Crisis - August 1998
• Money locked in bank while Ruble drops
• Agency and client funds rescued with a little help from
the tax man
• Media business down substantially; client losses
• Cut staff and salaries - deferred fees for select clients
• Aggressive new business push; vulture strategy
• Helped clients weather storm; make tough decisions
• 1998 ended with small profit (and a smaller agency)
Russia Market: Costs reduce - lower rents, lower salaries
(until the cycle began again)
The Rebirth
• F&R rebrands as "Rose" (sells Boston business)
• Overall business up in 1999 with new clients; focus on
PR, BTL
• During boom years, JR becomes "outsourced
executive" at Golden Telecom; Amtel-Vredestein;
CentreInvest Group
• Business grows; profits rise
Russia Market: Payroll, rents and overheads
swell...again!
Lessons learned...
1. "Lean" into a crisis – make tough decisions fast; but
“come out fighting”
2. Abandon less profitable or assailable businesses (we
spun off media buying)
3. Focus on most profitable businesses (we pushed PR
and BTL) - become best not biggest
4. Position/promote business as a survivor/leader (we
won business in 1998/99 while agencies were failing)
5. "Extreme Service" approach
OPPORTUNITY NO.1
CUSTOMER GENERALLY REEVALUATE THEIR
BRAND LOYALTIES DURING A RECESSION.
OPPORTUNITY NO.1
• Many people will be looking for greater value as their
buying power weakens.
• A recession breaks down barriers that make consumers
otherwise resistant to new brand messages.
• This creates an opportunity for brands previously unable
to capture significant market share
• Best opportunity in years to deliver your story and
receive a positive reception.
EXAMPLE
MTS continued advertising, and overtook
Bee-Line to become the #1 mobile provider
OPPORTUNITY NO.2
COMPANIES WILL TAKE A WAIT & SEE
ATTITUDE DURING A RECESSION.
OPPORTUNITY NO.2
• Companies will freeze or cut marketing budgets until
they have a clearer picture of what lies ahead.
• This will have the knock on effect of lower media costs.
• The smart companies will become more aggressive
while their competitors have their heads in the sand and
they can get more for their marketing spend.
• Establish yourself as a leader by staying visible through
media & promotion and reinforcing your reputation via
public relations.
• Experience shows that market share gained during a
recession will return dividends when the economy
rebounds.
EXAMPLE
WimmBillDann continued to promote
aggressively. Today they are the leading
Russian producer of dairy and beverage
products.
EXAMPLE
Saint Springs continued to expand its
marketing programs while the market was still
contracting. It grew to become the leader in the
bottled water segment and was acquired by
Nestle.
OPPORTUNITY NO.3
CUSTOMERS EXPECT A DEAL DURING A
RECESSION.
OPPORTUNITY NO.3
• People know companies are under pressure and will
expect superior products, special offers and better
service
• You shouldn’t feel obliged to lower your prices to win
business during a recession. Customers want value
more than discounts.
• Discounts may move inventory today, but may come at
a high cost
• Give your customers more rather than charge them
less.
• Expand product features, extend warrantees, provide
special financing terms and offer enticing rewards
EXAMPLE
Electronics retailer M-Video owes much of its
success to creative promotions it began during
the last crisis to lure customers and build
loyalty – a practice they continue to this day.