Poland Business

 

Marketing In Poland

This page reviews some of the conditions related to marketing in Poland.

This page reviews some of the conditions related to marketing in Poland.

By Andrew Piekarski, Totus Marketing
Differences between Poland and Western countries are reviewed from a marketing perspective.

In the opinion of many specialists in international business, Poland is the most attractive country of the old Soviet block for foreign investment.

Russia may be a huge market, but its political stability is suspect and its economic reforms slow. Estonia has shown perhaps the most courage in implementing drastic economic reforms, but its population is tiny (about 1 million people). The Czech Republic is larger (10 million people) but the recent economic and political crises have tarnished its image.

On the other hand, Poland has a large market (40 million people), political stability, and is still reaping the benefits of significant economic reforms undertaken during the first weeks of its first noncommunist government.

It is the ideal place to start in eastern Europe, in its own right, and as a base for future expansion into the surrounding countries.

Once a decision has been taken to locate in Poland, the aspiring investor must now tackle the question of how to go about it. A key to approaching this issue is to understand the ways in which Poland differs from the traditional market-oriented economies of the West. The country is still stuck with the after-effects of 40 year of communist rule – political, social and physical. The investor who understand this and finds a way to work-around or use these differences will be rewarded by the market appropriately. This paper will not attempt to deal with all the differences. Legal, financial and infrastructure financial and infrastructure differences are well handled by the world’s major management consultancies, most of which have offices in the nation’s major cities. This paper deals "marketing” differences, because so little has been written about them to-date.

Management competence

In the writer’s experience, business managers in Poland can conveniently be segmented into three groups:

1) Managers of Polish companies that are either still state-owned, or once were but have been privatized – frequently referred to as the nomenklatura. All too frequently, they are the original managers who got to their position because of market conditions, are emerging as competent managers. More retain their old habits. They are difficult to negotiate with or to sell to.

2) Managers of new Polish companies. These companies are typically found in the distribution, services and IT sectors. There are often entrepreneurial, young and dynamic. Their behaviour is rational (in the economic sense), and doing business with them is no different than it would be in the US and the UK.

3) Managers of subsidiaries of foreign companies. Foreign investors will typically bring in expatriate executives for a few years, hire local people for middle management, and upgrade them to executive level quickly. These local managers are similar to the above group (managers of new Polish companies) but have the advantages that come with corporate experience. In the view of the writer, they are the most significant agents of change in Polish business.

Marketing experience

In-depth experience doesn’t exit. The old command-driven economies didn’t need it. The government told the factories what to produce and how much. Managers were not rewarded for selling more, or for increasing margins. This means it is impossible to find well-seasoned Polish- born marketing or sales managers. But, it is possible to find ambitious, energetic managers with an instinct for marketing and a willingness to learn!

Marketing techniques

Many corporate managers believe that marketing courses available in business colleges and universities can make up for the lack of experience. Students with business degrees are highly sought after. Yet consider how useful college-based marketing education is in your own countries. MBAs in North American and Europe have value – once the theoretical knowledge has been seasoned by war in the fact that few of the lectures delivering the marketing courses have any business experience themselves.

The most significant agents of change in this area have been market research companies and advertising agencies that have been pulled into Poland by some of their major customers, particularly those selling high volume consumer goods. For most people in Polish businesses:

marketing = consumer research + advertising

Yet a customer-written advertising brief is still a rarity, and this is inevitably reflected in the quality of advertising.

At a practical level, concepts and techniques such as the "value chain”, the "unique selling proposition” and "sales lead management” are virtually unknown.

Customer satisfaction

The link between customer satisfaction and increased sales still seems to be a mystery to most Polish business. If, occasionally, service is delivered courteously, it is because the service representative happens to have a courteous disposition – rater than an understanding that good customer service is a necessary part of doing business. Customer do not expect good service UNTIL they come across the real thing. Then they behave like rational consumers – they want more. The fight for good service is being led by a number of Western companies, which either have it ingrained in their corporate culture, or see it as a competitive weapon against local Polish companies.

Telephone communications

The telephone infrastructure is poor, but more significantly, unlike in the west, telephone communications are not yet ingrained in the culture of business. People do not understand the importance of introducing themselves properly when picking up the receiver, of talking or leaving clear messages, of returning calls, and – above all –of the opportunities for improved effectiveness that the telephone provides. Telemarketing is in its infancy. Calling a customer to find out if they are happy with the service they received is unheard of. But image the effect on customer will certainly remember the call and the company – and will be disposed to buy again.

Business information

A small number of business and marketing publications, as well as business-oriented TV and radio program, have done much to improve the quality and quality of business information available to marketing managers. Yet compared to the vast oceans of information available in North American and Western Europe, there is little in Poland to help the business manager in decision making. Instinct and judgement are personal attributes that have a special value in such an environment.

Commercial data bases, so important for direct marketers, are few in number, and list brokers even fewer. New privacy laws, stricter than in most Western countries, ensure that their will not be dramatic. A new law requires companies collecting and keeping personal data for commercial use to get the written consent of each customer.

Yet the basic arguments for direct marketing are as valid as in any other country. Direct marketing are already working on ways to operate within the new legal environment.

Conclusion

The above is only a partial list of differences. Other areas of importance to marketers include:

- public skepticism with regard to claims
- the importance of brands
- attitudes with regard to foreign goods
- weakness of consumer and interest groups
- limited social control of advertising messages
- shortage of specialized copy-writes
- tax considerations for marketers
- little advertising or direct mail clutter
- public hunger for new goods and services

For the western company considering new markets, Poland must be must be enormously attractive. 40 million hungry consumers, a buoyant economy, and a commitment to democracy and western values means good business. There are opportunities for early entrants to capture a dominant market share. But share has to be earned. Earning means understanding what is different and preparing appropriately.

How can an aspiring entrant prepare? In principal, the same way as when preparing to enter any new domestic market. That includes using the experience gained by others who have gone in earlier. Consulting companies familiar with western practices have been in Poland for some years now. Some of them have bicultural and bilingual experts who operate comfortably in both the North American / Western European and the Polish environments. And, their future is often dependent on helping foreign companies become successful in Poland.