Elena Derevyanko: Cumulative reputation – for the domestic use and for export

The improvement of reputation requires paying attention not only to the micro-, but also to meso- and macro-economic processes.

Even after 25 years of the market economy development, the reputation management as a neatly organized business process is more exotic rather than a common business issue for Ukrainian companies. This is the case not only for local companies but also for local branches of international corporations.

However, the process of developing the reputation capital depends mostly on efforts of the entity (a company, group of companies, alliances, etc.) and on sub-level processes, because the perception of business structures and their product brands are seriously affected by the image/reputation of the country and the industry/sector where it operates.

It is necessary to clearly differentiate the image and the reputation. The image level is the first round of associations, which was formed without direct contact between the audience and the subject involved in the reputation-making activity. At the moment, when the audience enters into contractual relationship with a company or consumes products of a particular brand, the following experiment takes place: whether the image expectations are met or not? If they are, we can speak about further contracts/purchases, loyalty, long-term cooperation, «ambassadors» and «advocates» of corporate and product brands.
The perception of any Ukrainian company by a foreign audience is influenced by two aspects: the fact of being «Ukrainian» and the general attitude to companies in the agricultural sector and the processing industry which offer their goods in the global market. Unfortunately, at this stage being «Ukrainian» (if you ignore political and romantic assessments) means increased level of business risks, and the respective approach to interaction.

Nevertheless, the branch aspect is quite curious and deserves special consideration. It’s not even about unsuccessful reputation stories, like the well-known situation with Mriya agricultural holding, or about Ukrainian companies’ success stories. We need a different level of understanding the problem.

For Ukraine, in its current state, the hope for economy stabilization in many (and possibly in most) ways is connected with the agro-industrial complex. This also concerns the domestic and foreign markets. Almost absolute degradation of heavy industry resulted in the fact that drivers for global competitiveness remained with the traditional agribusiness (mainly in terms of products with low added value) and newborn IT-sector.

This means that all opportunities should be used at all levels of international relations.
The semantic framework of the industry reputation management is established by a two-way process: on the one hand, business interests of the «bottom» and, on the other hand, branding movements at the «top». It is clear that in case of decent profit margins, which balance the risks (including reputational ones), a transaction will take place anyway, irrespective of the fact whether there is any trust or not. But if there are several equivalent alternatives, a typical businessman, who does not really tend to risk, prefers to work with a partner from a more reputable country.

Therefore, the state represented by its authorized representatives and officials should take care of the following things:
• its image in general — in terms of export promotion, the attraction of investments and the development of tourism;
• the promotion of interest of its key businesses.

However, it should implement it in a wise and responsible manner, in view of the national interests, and never do it from time to time or formally, which can often be seen now. The general national-wide media activities or events should be supplemented with targeted sector programs to generate a favorable image.

Of course, the work of industry players will always remain the main reputation-generating factor. Halo effects of international reputational scandals affect everyone (as well as those outside the industry). In the current situation, when Ukraine has become a hot spot on the global map, it is absolutely unnecessary.

The effective reputation management models depend on sub-sectors, branches and sub-branches of Ukrainian agribusiness. Meanwhile, under the existing conditions it will be wise and responsible to enrich the corporate message-box with certain messages going beyond the traditional business logic. I.e. it is necessary to talk about the business climate in the country without undue hysteria, and praise more often rather than criticize. And the key point is that it is necessary to strive to be a counterparty selling such goods that buyers are willing to become ambassadors/advocates of. This should relate not only to your corporate brand, but also to Ukraine and Ukrainian agribusiness in general.

Elena Derevyanko, Vice-President of Ukrainian PR-League, a partner of PR-Service Agency, Ph. D. in Economics.