Izvestia Media April, 2000

How much the reputation costs

It is easy to provide enough evidence of how reputation management can make or ruin a business. PR campaign conducted for VimpelCom (a leading Russian mobile operator) accentuated transparency, quotation on the western stock platforms (NYSE) and the use of cutting edge technologies. Such approach is clear and attractive for Westerners, who often face complete stonewalling of the Russian business. The 1998 financial crisis became a real test for VimpelCom and, thanks to its well cared about and managed reputation, the stock fell only 20%, while 80% to 90% slump was a norm for the bulk of Russian businesses. In 1998 VimpelCom's Bee Line brand was recognized as "Brand of the Year" in the nomination "Reputation and Trust".

Example of VAZ, a major Russian carmaker, is a completely contrary. Failing to build relationships with potential investors, the flagship of the Russian automotive industry found itself balancing on the edge of a catastrophe: short shipments, lack of resources, failure to develop the business were among the many obstacles. Then the stake was made on ties with the state authorities, who turned out to be unable to put things right. In addition, Western investors became more suspicious of the enterprise's political affairs...

Working with reputation of Baltika Brewery director, Taymuraz Balloyev, is another story. Mr. Balloyev has passed a long way from lower positions to general director, which contributed to "one of us" image, better reception of transparency and professionalism. Strengthened by thoughtful marketing, Baltika's reputation helped it become one of the best Russian investment opportunities.

Good reputation helps companies achieve a wide spectrum of business goals - from fund raising to client base extension. Large, small and medium size businesses must change views on reputation to their own benefit. The world has changed. And the time got ripe to shift PR from "other expenses" category up to "capital investments".

Veronica V. Moiseeva,
Imageland PR