BEN-ZION BENKHIN

INTERNATIONAL
MARKETING PLAN FOR
BLUE LINE
Russian Federation

Table of Contents
Overview...................................................................................................................................... 2
Situational Analysis...................................................................................................................... 3
Marketing Plan............................................................................................................................. 5
Appendix...................................................................................................................................... 7
References.................................................................................................................................. 8

Overview
With Blue Lines expansion to Russia, the company will introduce products
that are similar to their existing ones in Canada to the Russian Market. Russia, like
Canada, is a country home to many people who enjoy hockey, and as a result is
home to many potential customers. Blue Line can take advantage of low material
and labor costs in Russia to produce their product very cheaply, while still creating
a high quality and demanded product. By focusing on selling and marketing the
product in urban hubs, Blue Line ensures that its hockey sticks will be a recognized
and sought after good. If careful measures are taken and significant planning takes
place, Blue Line has the opportunity to create tremendous profit and find success
in the Russian market.

Situational Analysis
The average Russian will have a disposable income of approximately
17, 230 USD yearly. Its important to note that there is a significant wealth gap
between Russian consumers in the top 20% and bottom 20% of the population. The
average disposable income for a Russian consumer in the top 20% is
approximately 33,860 USD while that of a bottom 20% consumer is a mere 5,735
USD. This is one of many indicators of significant economic inequality in the
Russian market. (Mikhailov, 2014)
Russian consumers can be separated into 7 primary consumer groups. As can
be seen in Table 1.1, the tradionalist and saving-oriented groups account for
only 26% of the Russian population. Consumers in these categories have a low
consumption potential. The remaining 74% of the population can be categorized in
one of the other 5 categories. Consumers in these categories have average or higher
than average consumption potentials. With this in mind, about 3/4ths of the
Russian population engages in behaviors that will lead to increased spending,
while remaining consumers are more likely to save their money.
By looking more closely at these consumer groups, it is also possible to
identify which consumers are likely to spend money on luxury and recreational
goods. Innovators have a very high consumption potential and enjoy novelty
products as long as they are reliable and of high quality. In combination with the
fact that their social status is of great importance to them, innovators are
consumers who frequently spend money on luxury goods. Achieved and Stable
Russian consumers also spend money on luxury goods. Their stable economic
situation permits them to purchase these goods, which they pick based on
convenience and reliability of the product. The Spontaneous consumer is
impulsive and unpredictable with their purchases. Though this means that some of
the consumers income will go towards the purchase of luxury goods, it is difficult
to predict the success of a product with this consumer group. Upwardly Oriented
consumers focus on prestigious and thought out consumption. The brand and
reputation of a product is of utmost importance to them, so this consumer group
will also typically engage in spending behaviors. The remaining consumers,
categorized as Tradionalists or Saving Oriented are more reluctant to purchase
luxury goods and can be categorized as savers. (Pesu, 2013)
Russia is home a world class IT market. IT services have been steadily
growing in Russia for the past decade. For instance, the value of the market for IT
3

technologies and services was about 711 million rubles in 2012 and 762.3 million
rubles in 2013, representing a 15.8% growth. Russia has a strong infrastructure for
IT and as a result such growth will continue. Information technology is typically
not a logistical problem for businesses operating in Russia. (Software Russia,
2014)
Transportation in Russia is greatly limited by the large area of the country.
However, currently existing transportation infrastructure is highly developed and
can easily accommodate operations to highly concentrated areas. As such, transport
of products is typically not an issue to urban hubs. Transportation to less
concentrated sub-urban and rural areas is more of an issue.
Russian warehouses are placed in strategic locations in proximity to urban
centers. Warehousing companies are aware of the previously discussed
transportation issues and their operations are primary focused on the storage and
delivery of goods intended largely for urban markets.

Marketing Plan
Product:
Blue Line will offer two unique products in Russia, as it does in Canada; a
simple wooden stick, and a higher quality composite stick. The products
themselves will hardly be changed. They should be made of the same material, or
of material of comparable quality. However, the design (the art on the stick) will be
changed to be appealing to the Russian consumer. The design of the stick should
incorporate both the Russian and Canadian flags.
The packaging for the hockey stick should follow similar design patterns.
This can include pictures of Canadian and Russian star players, and color schemes
that are consistent with the Russian and Canadian flags. Utilization of both
Canadian and Russian elements in the product is of vital importance. This will
maintain the Canadian identity of the product, while also tying in the pride Russian
people have in the sport. Hockey and the existing rivalry with Canadian hockey
teams are both heavily intertwined with Russian national identity. The
incorporation of these design elements will thus be attractive to Russian
consumers.

Place:
Blue Line should take a decentralized approach to their entry into the
Russian market. This will allow Blue Line to take advantage of the cheap cost of
Russian materials and remove the need for international shipping. Aside from
providing tremendous economic benefits, this will also result in a better final
product. The Russian market and its consumers is tremendously different from that
of Canada. Decentralizing will allow for the production of a hockey stick that is
more fine-tuned to success in the Russian market, and as a result yield more sales.
E-commerce will be necessary for sales in the Russian market. As previously
discussed, many Russian consumers do a significant amount of shopping online.
Making the hockey sticks available online will greatly increase the number of
consumers to whom the product is available. Blue Line should also distribute its
product to Russian retailers, focusing primarily on those in urban hubs. Some
examples include Perekrestok, a Russian supermarket chain, and Sportmaster, a
sporting goods chain.
5

Price:
The price of hockey sticks in Russia varies depending on the quality of the
product. Typically, simple wooden sticks cost between 200-300 rubles (approx. 4-8
CAD) while more sophisticated products cost around 2500-3000 rubles (approx.
50-65 CAD). Russian consumers pay significantly less for hockey sticks than
Canadian consumers.
Blue Line hockey sticks can be considered as luxury sticks. This is because
they will be marketed as products from a foreign company and of high quality
make. As a result, it would make sense to price the products slightly higher than
the average market value.
Decentralization will incur significant costs. However, the lower price of
Russian materials and labor more than compensates for these costs. As a result, an
aggressive pricing strategy is viable.
With these facts in mind, the simple wooden sticks should be priced at 400
Rubles (approx. 10 CAD) and the composite sticks should be priced at 4500
Rubles (approx. 110 CAD). While these prices are lower than the Canadian prices
for the sticks, they are slightly higher than the average market prices for similar
Russian sticks. Additionally, the lower cost of producing and distributing them in
Russia can accommodate this lower cost.

Promotion:
Blue Lines products should be promoted on a variety of channels. Since
Russian hockey products are hardly advertised, advertising Blue Lines products
will give them a significant advantage in the market.
Blue Line should include video ads for its products on televised broadcasts
of hockey games, as this will be seen by a large number of consumers who play
hockey and are thus potential customers.
Blue Line should also advertise on physical mediums such as banners and
posters in supermarkets. These ads should capture the attention of the shopping
consumer and alert them about the existence of this product.

Appendix
Table 1.1 Russian Consumer Types

References
Mikhailov, G. (2014, 02). Russian Federation. Retrieved from OECD:
http://www.oecdbetterlifeindex.org/countries/russian-federation/
Pesu, S. (2013, 12 13). Consumer Behavior in Russia. Retrieved from
http://www.awaragroup.com/upload/pdf/Awara-Group-Consumer-Behaviour-inRussia.pdf
Software Russia. (2014, 05 30). Software Industry Overview. Retrieved from Software Russia:
http://www.software-russia.com/why_russia/industry_overview