What’s New Zealand Doing Wrong In China?

Should Country Aim At Mass Market Rather Than Luxury?

Chinese

A growing number of Chinese students choose to study in New Zealand in recent years (Image: People.com)

Jing Daily wrote last year, New Zealand real estate agents looked to Chinese HNWIs to pick up the slack for anemic demand from local investors. With Western brands continuing their China expansion efforts, everyone from wine producers to lamb farmers in New Zealand has also looked to position their products in the Chinese luxury segment. But as Xinhua writes this week, New Zealand expectations and Chinese consumer education show a yawning gap, which provides an interesting case study in the way countries can and should market themselves in China. Is it always best to market products solely at the elite, or is a more mass-market approach a more sure-fire bet for long-term profit? From Xinhua,

New Zealand companies are failing to properly exploit Asian markets because they don’t understand Asian customers, said a leading New Zealand marketing academic in an interview with Xinhua.

Professor Kim-Shyan Fam said too many New Zealand exporters are also squandering opportunities offered by the free trade agreement with China because they overvalue their products and lack long- term marketing strategies.

Many New Zealand companies were stuck in a “short-term view” of Asian markets, believing New Zealand’s products could be sold as luxury or “exclusive” items to small upper income groups.

“A lot of companies when they start to sell, they make their products too exclusive and too expensive. They have the attitude that they want to mark up the price and think that the product must be good because it comes from New Zealand.”

In the interview, Fam suggested that many New Zealand exports, such as wine, mussels, dairy products and lamb, should be aimed at mass consumption in China and other Asian markets. When talked about marketing strategies, he proposed the idea of marketing in cheaper ways, such as using a cheap form of information, looking at supermarket sampling, word of mouth , and the Internet. In addition to aiming at mass consumption and using cheaper forms of marketing, Fam also warned,

New Zealand was losing some of its best Asian marketing talent when Asian students returned home from studying in New Zealand.

In this regard, Ministry of Foreign Affairs and Trade Deputy Secretary David Walker suggested that New Zealanders need to become more “Asia savvy” to better engage with Asia.

“We need to tap more effectively into the skills and networks of our Asian migrants. Asian communities, both new and old, bring Asia-relevant skills and connections to the region attributes which should be of great value to New Zealand business,” said Walker.

According to the article,  eleven of New Zealand’s top 20 export markets are in Asia, with the Chinese mainland 2nd. The Department of Labour has urged New Zealand businesses to consider the benefits of hiring Asian workers, a highly qualified segment of the workforce.

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