It’s marvellous that Harvey Keitel likes our beer and the world is gaga over Middle Earth, but are such accolades enough to shore up your particular exporting reputation?
- Where in the world is my oyster?
- So you want to be an exporter
- Case study: Food for wolves
- Look out world, here you come
- Case study: Honey money
- From a place they've never heard of
- Case study: Future perfect
- Damn the torpedoes
- Case study: For the freight hearted
- Putting the intellect into intellectual property
- Taking care of business
- Does it matter where it's made?
They help, says Grant McPherson, NZTE group general manager, business solutions, but are hardly solid platforms in themselves for building an export business. “Generally the advantages of being a New Zealand exporter include the fact that by international standards most are comparatively small businesses, which means they can respond to the needs of customers in an agile and nimble way.”
But there are also disadvantages—being physically so far from many international markets and the fact that, in order to grow, New Zealand businesses need to turn to exporting earlier than their counterparts in many other countries. This means our businesses aren’t always as well prepared when they enter international markets.
More challenging is the perception many markets have of us as exporters. The good news is that we tend to rank high in human values. However we rank low in business acumen.
“This doesn’t mean we should compromise our personal touch,” says McPherson, “but it is essential that New Zealand businesses are able to demonstrate professionalism in their delivery if they are to be taken seriously.”
For example, Chinese business people respect New Zealand, but think New Zealanders need to be willing to make a commitment to a long-term relationship. Their US counterparts have a last-frontier romanticism about New Zealand but think we need to improve business basics, such as recognising the importance of having senior managers based overseas and being more proactive.
And in India, New Zealanders are seen as genuine, honest and unpretentious but need to be more flexible in terms of partnering with other New Zealand companies in order to meet demand for products in India.
In terms of trading off Brand New Zealand, more and more exporters see the benefit of having a united story and a collective front in marketing New Zealand overseas. From an overarching Brand New Zealand perspective, we know that both rational and emotive influences have an effect on whether international business people will deal with us. Credibility, reliability and meeting the customers’ needs are vital.
“Our businesses are less likely to downplay their New Zealandness than they were five years ago, as overseas buyers demand food, products and services that imbue traditional New Zealand values like safety, naturalness and honesty,” says McPherson. “NZTE, in fact, uses the New Zealand brand in its international marketing to build New Zealand’s business reputation in key markets. The stories and imagery we use to illustrate the brand are designed to highlight New Zealand values or attributes such as guardianship, welcoming, resourceful, integrity, refreshing.”
Rather than adopting our imagery as a whole, the product type and target will help to determine how much of Aotearoa can successfully be pushed.
“In the United States our research shows that those consumers are increasingly focused, and acting on, factors relating to sustainability. But the overriding consumer driver is quality and for many of them, quality and sustainability have similar meanings. This means New Zealand food and beverage producers, for example, should be factoring specific positive perceptions of New Zealand into their marketing in the US.”
Plan well, be prepared and do your research. Most export strategies require time, capital and a commitment to build relationships if they are to be successful.
“Too often we see businesses fail in new international markets because they haven’t put enough thought into these things. It is unusual to complete a complicated business deal in one trip to an international market. Taking time to build relationships before you start closing a deal is necessary to build trust and learn about how business is done.”
McPherson also suggests that familiarity with customs and etiquette will improve your chance of success.
“Your customers’ buying decisions and behaviour will be influenced by a number of cultural factors ranging from business methods, dress and diet to history and religious customs. A deeper understanding of the overseas culture may also allow you to spot new market opportunities. Simple things such as the colour of your packaging can have an impact on whether consumers in some markets will buy it.”
In addition, NZTE has developed a value creation model that can help exporters focus on the issues that matter.
“Businesses need to understand how they can create value, enhance performance and develop their export performance. The model is designed to get businesses thinking about how to make their purpose and business model innovative. It encourages them to find ways to share their purpose and ideas with customers so that they are connected to the people using their products and services. It also shows that businesses need a deep understanding where they can create the most value in the global value chain, and excellent production and delivery systems.”
Zomo’s Sebastian Krajewski says the New Zealand component of a product or service offer can definitely add value, provided the product stacks up.
“For example, if you’re going to work with European agents/ buyers, be aware they are brilliant businessmen and women, stemming from many centuries of trading experience. It’s in their blood. They will quickly see the potential in your products/services, provided you have the right goods.
“The question you must be able to answer is, do you have the right goods? Generally, if a Kiwi innovation, or even a Kiwi twist on something that exists elsewhere, has succeeded in New Zealand, then success in other developed nations is more than likely. Why? Kiwis are highly practical, so your widget is probably going to do the job better. But equally as important in a visually driven society, New Zealand design is unique and high-end. This transcends fashion, stretching into industries such as bathware, fireplaces, drinks ... the list is endless. And consumers buy into feel-good stories. They get emotionally attached to brands, and New Zealand as a brand is one of the most premium and desirable ones in the world”.
“Our businesses are less likely to downplay their New Zealandness than they were five years ago, as overseas buyers demand food, products and services that imbue traditional New Zealand values”
Some of the ways to attach Brand New Zealand to your offer includes using sustainable packaging; extolling the virtues of ‘Made in NZ’ (exotic, pure, pristine, innovative, fresh thinking and so on); developing visually stunning marketing collateral; and having the whole package presented by a professional, likable Kiwi.
Do that, says Krajewski, and you’ll be two steps ahead of your American or European competitor.
“Passion for what you have on offer is paramount. You need to infect others with it. Your budget is probably going to be a fraction of your competitors’, but it doesn’t need to be a disadvantage.”
AJ Park’s Alan Potter says leaping onto the country brand bandwagon without thinking through the issues could cause problems at a later stage. “You have to stand back and look at the overall brand approach and determine where Brand New Zealand might play into that. There is the name and the logo, but then you have to consider all the other elements that will identify your business as the source of the product or service via linkage to your brand.
“At some stage you may then consider, from an exporting view, what extent you want to trade off some of the elements of Brand New Zealand. There may be apparent advantages and links between the two brands—clean, green and so on. The drawbacks are that the linkage can inexorably link the two brands to the point that you lose control over your own brand. It may be that Brand New Zealand starts to go in a direction that may be detrimental to your product and service, but you are hamstrung. Some also try to shoehorn their brand into the Brand New Zealand space based solely on country of origin but in fact there may be little or no synergies between the two.”
The other challenge, he says, is that if you are one of a multitude of brands in the same space offshore it can make it hard to distinguish. Similarly, if one is faced with a product recall you’ll be tarnished too.
“So, yes, look at the advantages and disadvantages,” says Potter, “but try to construct the mix in a way that it benefits your brand direction but not at the expense of losing flexibility.”
“Passion for what you have on offer is paramount. You need to infect others with it. Your budget is probably going to be a fraction of your competitors', but it doesn't have to be a disadvantage”
If they don’t want it
Maybe your export pitch has been turned down, but if you can offer positive solutions you can overcome objections before they become deal-killers. If you are pitching a product, emphasise continuity, local maintenance and back up, and features that save money/time. Focus on your unique difference.
If you are pitching a service, the people aspect is more crucial. Outline how you will keep in touch through regular visits and/or local alliances on the ground. Remember the more credibility and the better track record you have, the easier it is to pitch, so quote other large companies you have worked with or work you have done.
Negotiations can take months or even years, so start prospecting early—it will take you longer than you think. Larger companies can often take some time to make decisions as the process has to move through layers of management. In the meantime, continue to develop your personal relationships with overseas customers. Visit them when you can, or turn up to events, conferences or trade shows where they can meet you. The more you can see them in different settings, the better.
They’re talking about us
Some anonymous quotes from NZTE research on attitudes towards Kiwi exporters:
“I am so convinced about the technology available in New Zealand, they have got a big scope … but they don’t try and understand Indian processes. I have better things to do than sit and explain to them— they should go to India.”
“Product acceptance takes time in India and it is critical to be around while the need is being created, but New Zealand businesses exit the market when faced with slight resistance.”
“They lack the finesse that Japanese people have. They’re a bit too wishful in their thinking. They expect us to put up with the variable quality but the market will not accept it. If we say that what we import from New Zealand has to be 100 percent, too often what we get is below 80 percent.”
“There was a compatibility issue with the JAS licence (organic certification), and New Zealand was behind. I’ve told them a number of times to match their standards to that of Japan, but they lagged behind. Instead, Australia gained that organic JAS license, so was able to tie up with Japan much quicker. In Japan, it’s considered illegal to make an organci claim without the organic JAS licence, and that’s why I discontinued importing beef from New Zealand.”
“I like to cooperate with those who have a real interest in China, have long-term and detailed business plans and goals, and come to China to understand and interpret us and our consumers more. I don’t like those who do not put much thought into the Chinese market.”
“There is a risk aversion in New Zealanders. It’s a simple matter of risk aversion. Nobody wants to pay out and failure is seen as a devastating experience. Whereas in America, failure is seen as proof of contest—you’ve actually done it. You have pushed the entrepreneurial idea up to the point that it could fail.”
The country brand trap
The ‘Made in China’ brand now carries some risks. From a food and health and safety viewpoint—think melamine in milk powder—those consumers who know or check the country of origin of a product will think twice about buying Chinese-made for the next several years. Then there are the low-cost/low-quality perceptions that sophisticated Chinese corporates travelling up the brand value chain have to fight against. Associations with ‘cheap’ and ‘poor quality’ can’t be changed overnight and often take long-term, concerted communications campaigns to dispel. This will require Chinese brands to find competitive advantages beyond price. Several global brands have migrated from low-price to good-value-for-money associations: Toyota and Dell are but two.
Once into a market, and to protect your position, try to think of the key objections customers are likely to raise and what reassurances or solutions you can offer. Involve your staff and your advisors in this exercise. It can be useful to imagine what a potential customer might ask. For example:
- Why should we use a non-local company?
- Will the product work in our climate, electrical systems or other local conditions?
- Does the product meet all our industry, health and safety regulations?
- What if something goes wrong—who do we talk to? Will we be able to talk to them on a regular basis?
- Will we have to set up a new supplier number?
- How long does it take to get spares/supplies/replies/additional product/ service?