The World: Insider's View - Hungary.(Hungarian market for advertising agencies)

Hamstrung by a culture where the price dominates purchasing decisions, agencies have had to revise their approach, Pietro Leone writes.

The Hungarian market is quite unlike almost any other in Europe. Not least because it is heavily price-driven, with shoppers more interested in value for money than brand loyalty.

This proved to be an early salutary lesson for the first international marketers and global agency networks. When they entered Hungary in the early 90s, they found themselves in a greenfield market where the practice of marketing was not properly understood. Faced with ten million consumers unfamiliar with the art of commercial persuasion, marketers thought they had reached the promised land.

But while shoppers were fascinated by the increasing number of alternatives on the shelves, their budget constraints necessitated a tough selection process based on personal values and needs. Forced to admit that succeeding in Hungary was going to be more difficult than anticipated, marketers and agencies began developing sales-focused activities to drive volume, grow market share and create the illusion of a strong business for the future.

Fiercely competitive sales drives made shoppers sensitive about finding the best deal, rather than paying more for a better brand. Marketers ran price promotions on a regular basis, making the 'value for money' proposition skewed more towards money than value. So in the late 90s, Hungarians were fully trained 'cynical shoppers', with the ...