he solid advice before diving into a new country and an economy still in transition is that you’ve got to know the territory. That’s certainly high among pieces of advice given by Stuart McKenzie, a Scot who is managing director of Pulse, the top marketing agency in Ukraine. And yet, it’s advice he neglected to give himself when he first came to the newly minted nation, determined to roll the dice here.

In 1994, at age 23, speaking neither Ukrainian nor Russian, and with only a couple thousand dollars in his pocket, McKenzie and a colleague rolled into Ukraine. Why? “I was single, and wanted to try my abilities as an entrepreneur. I could see the barriers to an undercapitalized young person breaking into highly developed markets like the UK or America.”

So a new, unknown territory actually had appeal, in part because other outsiders were as unfamiliar with Ukraine as McKenzie was. Fortunately, he was a quick study on the ground, and he could discern what Ukrainians wanted – the types of products, particularly foodstuffs, they could experience in America and in the West. After years under the Soviet system, they wanted choices, and the choices needed to include what was affordable.

McKenzie became an importer of fruit and of anything tasty he could lay his hands on. “We didn’t do huge amounts of any one product,” says McKenzie. “We did huge numbers of containers filled with a little of everything.” That’s probably not an approach McKenzie would advise now, but at the time, in the wide-open Ukrainian market, it provided invaluable insights into Ukrainians tastes and desires.

The logistics were daunting, says McKenzie. “In the UK, a handful of retailers, perhaps four supermarket operations, represent maybe 80 percent of consumers. In Ukraine after independence, to deal with endless open air markets and kiosks, you needed perhaps 65,000 meetings and different contracts to get 80 percent of consumer volume. You needed a huge sales force out there promoting your products. It was difficult to organize, but very rewarding. Ukrainians are terrific at trading, less so at selling. But we trained them. As no one else was out speaking to the open air markets and the small outlets, our distribution and our returns were fantastic.”

The rug jerk came when individual food products suddenly required separate certifications for each item. “We were handling German biscuits, Finnish chocolate, Scottish oatcakes – many products that were already expensive,” says McKenzie.

“They became prohibitively expensive when each required certification and we were working with so many different items. So, it was time to shift our business model. Companies like Nestlé took note of our success with distribution, and asked us how to do it. So we began advising them, marketing for them. We branched into doing companies’ market research, to training their employees. We help companies with financial outsourcing that allows them to better function under a tax system that can be difficult to understand, and woefully expensive if one doesn’t manage the system properly. We provide public relations, so beyond pushing products onto shelves, we tell those products’ stories.

In addition to Nestlé, Pulse’s client list now includes Heineken, Red Bull, Hyatt, American Medical Centers, the Clifford Chance law firm, the Baker Tilly auditing company, McDonalds, AVIS, the Intercontinental Hotel in Kyiv, the Turtess touring company, DHL, Colgate-Palmolive Ukraine, Canon, Hollandia and others. McKenzie says this is one of the largest markets in the world for L'Oréal Paris, another client. As they develop, locally grown companies also seek out Pulse. Across the country, Pulse has a work force of 1,800.

Along the way, McKenzie has also become involved with a hotel enterprise, and the most successful nightclubs in Kyiv, Shooters, which just celebrated its seventh anniversary. He also pulled together a number of ex-pats to form a chapter of the Lions Club, a charitable organization, which showed the way for similar groups to get started.

With a Ukrainian wife and several children, and language fluency, McKenzie is in the country for the long haul. “The longer you’re here, the easier it is. Over time, you understand how you can do business normally. We know everyone, including those in government we deal with, we know when their birthday is. For a special day, they get flowers, chocolates, that’s the charm left from the Soviet system. Back then, if you worked in a bread factory, you gave a loaf as a present. Not bribes, but little gestures that show respect. If you have to do something else, you’re either very new or you’re doing something wrong.

“My clients include big multinationals; they’ve been invested here ten, twelve, fifteen years, and they’re all still doing great business,” says McKenzie. “If there’s a higher risk, there’s a higher reward, that’s just part of the terrain.”

“Historically, Ukraine’s geographic location has required a tricky balancing act, but it’s an advantage now, knocking on Europe’s door with a talented younger generation that is very European in its outlook. Sometimes there’s a transition while Ukraine companies have to leave behind some Soviet-era thinking, like high-volume, cheap goods. They tend to think, ‘volume is good.’ We say, ‘No, profit is good, building a brand is good.’”

It is the potential to build brands and to start from scratch with a new story that Pulse colleagues particularly enjoy. David Payne, the marketing and communication director, originally came to Kyiv in 1993 to direct the advertising campaign for mass privatization. He had earlier come from London to design similar privatization work in Russia, where he also helped set up the first advertising agency in the former Soviet Union.

By the time he reached Kyiv, Payne understood the lesson of avoiding overselling expectations with grand slogans. The new, more tailored slogans were along the line of “Privatization is a step toward prosperity.”

But the potential for creative work in Ukraine is not easily oversold. One of Payne’s favorite examples of the wide latitude in developing brands in Ukraine is his Korona chocolate campaign for Kraft.

“Ukrainians were stuck on the notion that chocolate is a confection for children,” says Payne. “We went back to ancient times, when chocolate was used as an aphrodisiac, and brought the idea forward – ‘Stimulate your senses, excite your imagination!’ The Ukrainians loved it. There’s no such thing as a brand being boxed in here because of what generations of consumers have always thought about it. One can present any story here. To most people, the stories are all new. There’s always fresh opportunities to challenge the market with psychology; it’s very exciting for creative people.”

Payne says viewing Ukraine as having been a third world country is a mistake. “This was always a very intellectual, technically high level society that just fell on hard times, dragged down by the Soviet Union. Education was always very important, almost 100 percent literacy. It’s just that the priorities weren’t on helping develop things for the Ukrainian people. Western influences will improve that exponentially.”

Now Payne is busy reaching out to younger consumers with social media techniques, to pull them to a brand, instead of pushing products on to shelves.

Among the pleasures of working in Ukraine, he says “the scale is good, much smaller, friendly; everyone knows everyone. If you’re new you get to know the everyone quickly. In Russia, it was more of a New York style, less personal, just struggling to survive in that massive environment.” He also views Ukraine as actually being more stable than most of the other former Soviet republics.

McKenzie sees added value in Ukraine’s location, in its ability to attract larger operations seeking a skilled but less expensive workforce. “Proctor and Gamble moved a factory from the UK here to make feminine hygiene products, for which there are exacting standards, and now they sell products from here throughout all of Europe and the former Soviet bloc. We’ll see a lot more moves like that. China may have a slight edge on cost for some time. But many buyers and manufacturers only have to travel for a couple hours to get here, where they can touch the goods. And they don’t have the long lead times waiting for shipping of their products. Eventually, such factors will play very well for Ukraine.”