Ukraine must brace for the marketing wars
“Since cut-throat competition is approaching Ukraine, soon it won’t matter what you want to do, only what your competitors will allow you to do,” Jack Trout, a leading US marketing strategist, warned Ukrainian businessmen attending his recent master class in Ukraine. In his view, a company’s brand “must be positioned by taking into account your competitors’ positioning.” According to Trout, positioning is all about differentiation: being different from other competing products on the market. As the guru of economic strategy has suggested, “Unless you have a point of differentiation, you have no other choice but to set low prices.”
What prices can Ukraine set for its internationally marketed brands? Trout noted that Russia has created only two brands, vodka and caviar, which are known internationally. Meanwhile, Ukraine doesn’t have a single international brand, said Trout at a press conference after his master class, calling Ukraine “a black hole” in this respect.
Answering a question from The Day, Trout said that oil and gas transit should not be viewed as Ukrainian brands. Yet wouldn’t it be fair to call the Panama or Suez Canals the brands of Panama and Egypt, respectively? Therefore, Ukraine, which is now integrating with Europe and the global world largely as a major transit country, should also be entitled to similar brands. Yet Mr. Trout seems to have accidentally hit the bull’s eye. He is right about the fact that a Ukrainian brand, such as the Odesa-Brody pipeline, could easily lose its national colors and become a victim of a tough marketing war, which Russia is waging deliberately, aggressively, and quite professionally so as to protect its status of Europe’s monopoly oil supplier. Incidentally, this unceasing war by Russia is being waged with the assistance of a fifth column in Ukraine.
It will be recalled that initially Ukraine was corralled into a grueling, yearlong discussion of the possibility of reversing the oil flow in this pipeline. The debates continued well after the Ukrainian government approved the only legitimate decision on the direct routing of the pipeline, until such time that Russia admitted through its mouthpiece, Transneft President Semion Weinstock, that it does not need the oil flow in the pipeline reversed after all. But even after this, feeble attempts to back-pump some oil came from TNK-BP. Interestingly enough, the blame for the idle pipeline has been shifted to no other than the person who was bending over backwards to get the project going. The neutralization of Oleksandr Todiychuk, Ukraine’s former negotiator for the Odesa-Brody project, who is well known in Europe and the US, and nominal (read: powerless) Ukrtransnafta president, may be considered the most efficient marketing move that Russia has thus far made in the war over the Odesa-Brody pipeline. Now this project is fully controlled by new Ukrtransnafta management, which is notorious for its attempts at reverse pumping. For that reason Fuel and Energy Minister Serhiy Tulub had every reason to declare that because of this shakeup the pipeline will be launched later than the deadline set by the government.
Minister Tulub was very careful with his words when commenting on this issue. He obviously knows much more about it. Unlike other citizens of Ukraine, he obviously knows about the recent scandal that erupted in Poland. Word leaked out that Orlen Combine, a potential buyer of Caspian oil that was to be delivered via the Odesa-Brody pipeline all the way to Poland, was planning to sign a long-term contract with some Cypriot company that offered to supply Orlen with all the oil that it will ever need. It doesn’t take an expert to realize that Russian oil suppliers are behind this Cypriot company. This is the way the advocates of reverse pumping were intending to implement one of their catchphrases to the effect that ‘Europe doesn’t need Caspian oil.’
Meanwhile, Russia’s flexible market strategists have put forward a new idea (the only surprising thing is that they waited until now to do this), which boils down to using the pipeline in the direct mode to pump Russian instead of Caspian crude. As the saying goes, this will keep the wolves sated and the sheep safe. The pipeline will pump oil to Europe, while Russia will keep its European markets. In this case, however, Russia does not seem to be bluffing, as it was with the reverse pumping affair. It’s common knowledge that Turkey intends to restrict the passage of oil tankers via the Bosphorus and Dardanelles straits. Most probably, it will do so as soon as the Baku-Ceyhan oil pipeline, which bypasses the straits, is completed. It is therefore high time for Russia to begin preparing for this eventuality. Understandably, the newly worded question significantly simplifies the task of Ukraine’s fifth column, which is bending over backwards to prove that all it wants is for the pipeline to be put into operation. Small wonder that at this point a people’s deputy from Odesa has registered a special bill in parliament, which envisions the privatization of the pipeline. And it doesn’t take an expert to guess who authored that bill and who cannot wait to finally become the new owner of the pipeline.
Still, marketing strategists are beginning to appear in Ukraine, although they are not so aggressive. Here I would like to quote Trout again: “Since cut-throat competition is approaching Ukraine, soon it won’t matter what you want to do, only what your competitors will allow you to do.” It is therefore clear that we should not be biding our time waiting for such a situation to arise, since now could be just the right moment for Ukraine. At a meeting with Ukraine’s Vice Prime Minister Andriy Kliuyev, US Eximbank President Philip Merrill said that his bank is willing to loan money to begin direct operations of the Odesa-Brody pipeline and to extend it to the Polish town of Plock. As Merrill put it, his country is interested in using this pipeline to pump oil from the Middle East to Europe. Isn’t Ukraine interested in winning this marketing war and those in the future, which every country should wage in the globalized world so as not to be left on the sidelines?
