Hungary - Selling Factors and Techniques Hungary - Selling Factors
Selling Factors/Techniques
Success in the Hungarian market is difficult without an in-country representative, agent, or distributor. While marketing tools serve to introduce a product or service, personal visits carry much more weight in Hungary. English, German and French are often spoken by younger business managers and are more prevalent in larger firms. U.S. companies in Hungary are still advised to have their brochures and information professionally translated and to have a translator on the spot during business meetings if needed.
U.S. companies should also be aware that access to capital is limited for many Hungarian firms. The inflation rate was 0.4% in Hungary in 2016, followed by 2.4% in 2017, and 2.8%in 2018 due to increasing price-pressure in the growing economy. The annual growth rate of total corporate loans grew above 10% in 2018.
These two factors usually benefit foreign firms. However, the Hungarian National Bank’s Funding for Growth Scheme (NHP) with an interest rate capped at maximum 2.5% has benefited several local firms, despite the fact that some of the lending was initially put into bank deposits or were used to purchase government bonds taking advantage of the arbitrage opportunity.
Most Hungarian companies and their customers cannot easily finance purchases locally as they tend to be too small to offer stock or issue commercial paper. As a result, businesses largely depends on self- financing.
U.S. companies can mitigate financing risks and better compete with EU firms by directing their Hungarian customers to services like those of the U.S. Export-Import Bank.
Because business in Hungary is based upon personal relationships and trust, U.S. exporters are encouraged to visit potential Hungarian customers when presenting a proposal and discuss all conditions of future dealings. Face-to-face meetings are essential to successful long-term business cooperation in Hungary. The U.S. Commercial Service Budapest, through its Gold Key Service and International Partner Search reports, can determine the export market potential in Hungary before U.S. firms commit resources.