een. The average Hungarian family in
1992 has 1.1 children.
This demographic aspect, coupled
with a growing trend towards a more
sensible and healthier lifestyle and
the stringent measures to keep alco
hol and driving strictly separate, lead
market researchers to assume that
the growth in beer consumption will
shortly come to a standstill and even
start to decline.
For a premium product like
Heineken beer the Hungarian market
is additionally difficult at this
moment, since economic develop
ments in the country are an extra
restraining factor. In September last
year a serious start was made by
Intercooperation on importing
Heineken beer into Hungary. Before
that, however, Heineken had already
been available in the hard currency
shops. For the first few months after
the turn-around in the Eastern Bloc,
the Heineken export department
waited to see what direction the deve
lopments would take. In September
last year they decided to take the
plunge; Intercooperation was appoin
ted as the importer of Heineken beer.
Intercooperation
Intercooperation is a Hungarian
trading company which was taken
over at the end of 1989 by Getz,
America's biggest trading company
whose main activities are in Asia.
Getz' core businesses are consumer
products, medical products and build
ing materials.
Getz was seeking expansion in
Europe and achieved this first in
Hungary with the acquisition of Inter
cooperation. Getz Europe is head
quartered in Budapest, one floor
above the offices of Intercooperation.
Intercooperation proved to be a
fairly well managed and profitable
trading company. Marketing manager
Jon Cannon, transferred by Getz from
Taiwan to Hungary to help structure
the transformation of Intercoopera
tion, explains that Heineken was one
of the first customers. "One of our key
areas was the start of a consumer
goods division. In Asia we had already
gained the required experience. The
Heineken distributorship was a tre
mendous start for us. We wanted a
portfolio of international brands.
Heineken should serve as a loco
motive in this respect."
Under own control
Jon Cannon only really started his
work for Heineken in November last
year; not the best time for the intro
duction, as beer consumption in
Hungary is very much seasonally
linked. Intercooperation decided to
keep distribution under its own con
trol. Jon Cannon explains why:
"Various factors played a role in our
decision. First of all, the financially
weak position of many wholesale
businesses. Additionally, there is
hardly any selling know-how present
within the wholesale firms. In brief,
there are too few professionals
amongst the wholesalers in Hungary."
Setting up your own distribution
network in a market which will not
show any spectacular growth over the
short term is an expensive business.
"It is difficult to earn money over the
short term, but good distribution is
absolutely essential to provide the
standard of service that the customer
expects of a premium-priced product
like Heineken."
Jon Cannon is frank about the
results during the first three months:
"It was a disaster. There were no
tourists and sales were very disap
pointing. But April and May were very
promising. Six months ago our
representatives were still hearing
quite often from new customers that
they were not interested in Heineken
beer because of the high price. Now
those customers are themselves ring
ing up and ordering twenty cases.
That's a promising development."
Perseverance
According to Cannon the growth is
due to the improved quality of the
representatives and to their great
perseverance. In view of the lack of
training in the area of sales Cannon
devotes a lot of time to supervising
and training his six reps. Cannon,
who prefers to have work-horses
rather than big shots in his team,
draws up sales and distribution tar
gets each month. "A rep's salary
consists of a fixed basic income and a
Variable income based on the results
he achieves." At the end of 1992
Cannon expects to be employing ten
reps and he may possibly split them
Certainly in a business that's just been
started you need to keep closely in touch
with the market. During his tour of
Budapest Jon Cannon spots new bars and
restaurants and notes down their details.
The next day an Intercooperation rep will
pay a call on the outlet.
T H K \V O It I. I) O I H K I N K K K N
