The Paradox of the Kiwi Exporter
This is the catch cry of media and industry when discussing where New Zealand SME’s will find sustainable export success. So what is a niche when talking business and what does it mean for New Zealand exporters? The McMillan dictionary defines it as “an opportunity to sell a particular product or service that no one else is selling”.
Knowing your niche enables very focussed targeting of your proposition, maximising your ability to communicate to the target audience and craft messaging relevant to them. The challenge is to identify that niche where no one else is selling an offer that can compete with yours.
And there lies the paradox of the Kiwi exporter, to identify that niche, the exporter needs to know the market well. How does a small business achieve this when they are based at a considerable distance from many important markets and rarely have an unlimited market research budget.
It is possible for a small business to identify niches in export markets. Some of the key factors to look at are:
- What is the niche they are operating in New Zealand? If you are dominating a focussed food category such as Paleo foods for the FMCG markets what international markets can you identify that are in similar stages of development?
- Are you clear on what your unfair competitive advantage is and where in the market it is strongest? Once you know what is unique about what you do, how it makes you more compelling than your close competitors, who will value it and why, you can get about framing your offer in ways that are meaningful to both market partners and end users.
- Know how your offer is relevant internationally. A business in New Zealand that has carved a market leading position supplying products and services may find that they cannot compete against multinationals on price when comparing apples with apples but when they market based on their quick turnaround, rapid product development and ability to use their New Zealand plant to deliver short runs they find that they can become a market leader in service and innovation.
- What is your capacity and desire to supply? If you have a limited capacity and no desire to invest in greater production then a key factor will be to find a niche that has a need no greater than your ability to supply.
- What are your price requirements and what segments of the market are willing to pay the price that you need to market your products? Many products that are an everyday price in New Zealand will command a premium internationally once freight, clearance costs, additional margins, storage warehousing and distribution are all factored in. Different tastes and market sized also effect volumes and therefor margin calculations.
Do you understand your business well enough to recognise a niche in an international market when you begin to focus on it?
For New Zealand businesses this is both a barrier and an opportunity.
This is the paradox.
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