to consumers in the Eastern European region.
Defining the Market in Eastern Europe
To be successful in Russia, Western marketers such as Levi Strauss must seek their primary objectives over the long term. Such marketers also must be flexible in adapting to local conditions, which are quite different from those found in established markets in Western countries. Consumer goods companies, such as Levi Strauss, must gain control over the distribution systems upon which their products depend.
The Russian population exceeds 150 million persons. Greater Moscow alone has a population of more than 11 million, more than the entire Czech Republic. St. Petersburg has a population of five million, making it as big a market as Slovakia or Denmark. Purchasing power parity in Russia is greater than that in either China or India. While the official per capita income level in Russia is low, the effects of the substantial underground economy in Russia are not reflected in the official data. Disposable income in Russia, as a proportion of total income, is high (35 percent compared with an average 15 percent in Western countries) because essential goods (housing, basic foods, and heating) are governed by price controls.
With respect to market size, Russia is a far more important market for Levi Strauss than are all of the former states of the Yugoslav federation combined. Prior to the beginning of the war in Bosnia, per capita incomes in the former states of the Yugoslav federation made these markets highly attractive. The war, together with Western economic sanctions in the region, however, has weakened the attractiveness of the former states of the Yugoslav federation for Western marketers, including Levi Strauss.
A uniform, global society is being shaped by a young culture and markets operating on similar economic strategies. Streets around the world are filled with young persons wearing Levi Strauss jeans. The global sprea...