Western Firms in Soviet Union Forget PR
Ronald McDonald could stand a lesson in public relations--Soviet style. So could dozens of Western companies lining up to do business in the Soviet Union.
That, at least, is the opinion of one Soviet official who three months ago formed the Soviet Union’s first independent public relations group. But its ultimate aim isn’t to teach American firms about Russian etiquette. Its goal is to learn about American style propaganda: PR.
“McDonald’s is riding on the inquisitiveness of the Russian people,” said Alexander Y. Borisov, president of the Soviet Public Relations Assn. Curious citizens--anxious to gobble their first Big Mac--generally go to McDonald’s once but don’t go back, he said. “Of course, McDonald’s might not suffer for the next century, because we have 300 million inquisitive people.”
For its part, McDonald’s says it’s after much more in Moscow than the quick ruble. McDonald’s officials point out that the company is reinvesting some of its profits in the Soviet Union--including a 12-story office building it has under construction.
But the real issue isn’t McDonald’s; it’s the dozens of Western companies that have descended upon the Soviet Union since the Cold War thawed. Some are so eager to gain a stronghold there that they are ignoring the basic public relations precepts that they would surely practice in their own countries--like first explaining to people who they are and what they want.
“These firms do their jobs in a communications vacuum,” said Borisov. “They just arrive and get down to business.”
But even if the Western firms in Russia aren’t practicing the same public relations that they preach back home, a growing number of Soviet companies and institutions are suddenly anxious to learn about how PR works in a democracy.
Perhaps no one is more interested than Borisov. The soft-spoken Soviet PR pioneer spent the past few weeks visiting a dozen American cities--including Los Angeles--in search of American public relations firms willing to grant PR internships to students at the Moscow State Institute of International Relations. At the institute, where James H. Dowling is dean and professor, students sign up for such courses as “Sociology of PR” and “Corporate PR.” Dowling is president and chief executive officer of New York-based Burson-Marseller, one of the world’s largest PR firms.
Today, Borisov is in Phoenix, where he is scheduled to address the annual conference of the Public Relations Society of America.
Until the events of recent months, there was basically no need for public relations in the Soviet Union, said Borisov. “A totalitarian regime relied upon propaganda,” said Borisov. “But propaganda is a one-way street. The great danger for us is to develop public relations as an outgrowth or byproduct of propaganda.”
Borisov’s neophyte organization has 50 members, some of them corporate. The group has also adopted a code of ethics that is loosely based upon a similar code of ethics upheld by the Public Relations Society of America. Most importantly, the group’s members have all agreed not to spread false information.
But even as Soviet academics are anxious to learn sophisticated public relations techniques, they are critical of some of the PR and marketing styles used by foreign companies in the Soviet Union. In particular, there is growing frustration with some Japanese firms, said Borisov.
A number of giant Japanese electronics firms--including Sony, Toshiba and Goldstar--place ads for their products in Russian newspapers and on posters at the airport. With these ads, the Japanese are clearly attempting to get name recognition in Soviet society. But, says Borisov, they may be getting the wrong kind of recognition. “These ads are just an irritation,” he said. “They are advertising goods that no one can afford to buy.”
Similarly, an Italian office equipment firm, ING. C. Olivetti & Co., jumped into advertising before it had attempted any public relations efforts. The Olivetti name has appeared on a ticking clock seen at the opening of the television evening news in the Soviet Union. But Olivetti eventually stopped this, Borisov believes, “because the name Olivetti didn’t ring any bells with the Soviet citizens.”
Top American public relations executives concede that trying to do their job in the Soviet Union is a struggle, at best.
“The real problem is just trying to figure out who is in charge,” said Dowling, the American PR executive.
Dowling set up the agency’s Moscow operations three years ago. The agency services such clients as Coca-Cola, Du Pont and Johnson & Johnson. The agency also has a number of other clients that are simply seeking professional advice on whether or not to do business in the Soviet Union.
But the PR firm is unable to help most clients obtain the thing they want most: market data. In the Soviet Union, it basically doesn’t exist. If it does, it is rarely correct. Said Dowling, “Even the phone books there are inaccurate.”
Irvine-Based Ad Agency to Close
Cochrane Chase, Livingston & Co., the 31-year-old Irvine-based advertising agency that spawned at least seven other Orange County agencies, will close its doors by the end of the year and dismiss its 33 employees. Observers said the company lost its identity when it was purchased in 1984 by the giant advertising conglomerate Saatchi & Saatchi/Compton Worldwide of London.
The office closing comes after a failed attempt by management to buy the company from its financially troubled parent. Neither side would release details of the offer.
Martin Tucker, president of New York-based Saatchi & Saatchi Holdings U.S.A. said Cochrane Chase was losing clients. The company’s billings are reportedly below $10 million, down from about $59 million in 1987. Cochrane Chase over the years has handled advertising for Carl Karcher Enterprises, Beckman Instruments, Dollar Rent-a-Car, Lucky Stores and Toshiba.
Briefly. . . .
The Los Angeles agency Larsen Colby/LHV&B; has won the three-year, $10-million ad business for the Seattle-based, mid-price hotel chain Nendels Hotels. . . . The Los Angeles office of Ketchum Advertising has picked up the estimated $3-million ad business for City of Industry-based Physician’s Formula skin treatment and cosmetics. . . . DDB Needham/Los Angeles has been awarded the estimated $3.5-million ad business for City of Industry-based Lynx Golf Equipment. . . . Samuel Goldwyn Co. of Los Angeles is expected to award its estimated $12-million media buying account to J. Walter Thompson/Los Angeles. . . . Irvine-based Mazda Motor of America Inc. said it is pulling its advertising from NBC-TV’s “Saturday Night Live” but denied that a boycott by a fundamentalist Christian group influenced its decision.
