HOW COKE IS INVADING EAST GERMANY
By

(FORTUNE Magazine) – ''Look out there,'' says Dieter Richter, pointing to a hill that overlooks the quiet town of Weimar, East Germany. ''That's a Soviet Army garrison that houses about 15,000 troops.'' Eyes rivet left, and on the next hill sits the old Buchenwald concentration camp. Straight below Richter's third-floor window: busy cranes, trucks, and tractors building what may well be Weimar's first market-driven factory, a Coca-Cola plant. As a manager in the government-owned beverage Kombinat (industrial group) in Weimar, Richter had cleared this tract eight years ago for a new soft-drink factory. A chronic shortage of construction equipment halted the building at its foundation. Now, with Coke pouring $30 million into the project, Richter is acquiring speedy bottling lines, new warehouse space, vending machines, and computers. He plans to stop producing Weimar's local cola, the foamy and foul- smelling Hit!, because, he says, ''we're building this business on quality.'' Coke is fighting formidable circumstances -- poor productivity, abominable quality control, lack of marketing knowledge. But occasionally you meet people in East Germany like Regine Hannemann who have selling in their souls. Hannemann, who had never been west before the Berlin Wall fell, is a six-foot 35-year-old who wears stylish outfits and gold jewelry. She was a distribution supervisor at an East Berlin beverage Kombinat where ''I sat there and the customer came to me with orders.'' An instinctive marketer who says her parents raised her to be confident and assertive, she catapulted early this year to head of sales and marketing at the Kombinat that handles Coke's bottling. Hannemann has been working 12 hours a day, vs. her old routine of nine. A walk around East Berlin with her quickly shows how her enterprise has paid off. Sidewalk vendors in front of the Brandenburg gate carry signs that say ''Trink Coca-Cola,'' and umbrellas bearing the famous red-and-white logo sprout from outdoor cafes along the Rathauspassage. Visiting the Centrum Warenhaus supermarket near East Berlin's Alexanderplatz, she complains to a store manager about an ugly end-aisle display. In an elaborate sports and social center that is among Hannemann's largest customers, the director of food and beverage operations haggles relentlessly about price. ''I must buy it for one mark seventy, and I sell it for two marks ninety. That's far too little profit.'' Hannemann won't back down. Making and selling Coke according to market forces will take getting used to all around. But as an affordable product that East Germans have seen pitched on West German TV for decades, it has appealing prospects.