Business with Australia: homework

Going into a meeting unprepared is a business executive’s recurring nightmare.

So why would you enter a new international market without local knowledge? You wouldn’t, say New Zealand exporters to Australia.

From fashion to professional services, manufacturing to media, the companies I interviewed said research was a crucial first step to business growth across the Tasman.

Stuart Norris, co-owner of tourism photography business Magic Memories, knows the statistics and data of his company and industry inside out.

He considers research and local knowledge to be critical to the success of any venture.

“We have 84 million photos online and take 30 million photos per year,” he says.

“If 10 people walk past my camera, I know how many photos I can take and the figure of sales. We give clients a compounded annual growth of 5% and the only thing they need to do is look at their bank accounts once a month.

“We do a lot of research on tourism numbers, we’re plugged into Australian Tourism as well as each region’s macro and micro tourism. We know, for example, if Jetstar drops their price how that affects us. We are always monitoring the situation.”

Elizabeth Barbalich, owner of skincare brand Antipodes Nature, says enlisting a strategist to get a detailed understanding of the Australian retail market helped her business identify the best model for the Australian market.

Fundamental differences in channel strategies between New Zealand and Australia include finding local distribution partners, as well as logistical and warehousing arrangements. Shipping directly from New Zealand didn’t work for her business, she says.

“Mistakes come down to not understanding the Australian market. We did a lot of research into the brand, particularly around the customers of our target retailers in Australia. You have to research the market thoroughly before even considering putting toes in the water. Don’t assume the free trade agreement makes it easy, the regulatory environment is not the same as in New Zealand.”

In the early days, market research for Icebreaker founder and CEO Jeremy Moon consisted of driving around Australia with an old suitcase full of product samples, talking to store owners.

Some of them became customers, others did not, but the value he gained from first hand experience taught him a lot about the Australian market.

“It gave me a reference so that when I had a team there I could understand the lay of the land,” he says.

“The old export model of making extra production and trying to sell it doesn’t work. For me, New Zealand business needs to get stronger at developing international business models that are all about having offshore teams, who are locals, and supporting them with what they need to be successful in their own markets.”

Moon now chairs the New Zealand government’s Better by Design group, which works with over 100 New Zealand companies to redesign their model from traditional to international design-led businesses.

Ian Cooper, head of global sales and marketing at Modtec Industries, recommends that research includes a detailed analysis of the corporate structures of Australian businesses, to identify the real decision makers.

“In New Zealand you quickly work out the sphere of influencers,” says Cooper, “but they may not be immediately noticeable in Australia. The sooner you can get to the end customer the sooner you will understand the motivation for purchase. These discussions should involve others in your company beyond the sales people and if you use partners, you need to find those that will provide honest feedback.”

Leah Fisher, co-founder of business improvement consultancy TakeON! agrees decision makers can be less obvious in Australia – and that local partners can offer insight that may otherwise be difficult to find.

“You need to build relationships with people on the ground,” says Fisher. “We’ve been fortunate because we have relationships with people who have returned to Australia and once you have a foothold, you can actively build your understanding of the market.”

Annabel Langbein, whose cooking show is soon to launch in Australia, says she worked hard to get a breakthrough in Australian television and had to prove her model worked before Australia would take a chance on her business.

“Research is so important, because you need to see who’s playing in that field,” she says. “You need to know the price points and the size of the market. Then you need to get the product, the distribution and supply chain right. We didn’t do a lot of local research, but we decided we didn’t want to be a publisher in Australia. Publishers have big lists and a lot of Australian talent.

“As soon as you start exporting you have to be really astute. Our mantra is ‘assume nothing’. In fact we have a sign in our office with those words so we remember them every day.”

* * *

In part three, Katz asks whether a company’s New Zealand heritage should be a part of its positioning in Australia.