The Press, June 2007
Can Kiwi technology exporters really compete on a world stage? They're up against powerful, well-funded conglomerates with endless research and development budgets, armies of sales people and massive advertising budgets. A recent Consumer Magazine survey on the local PC market suggests there are ways we can stand out against the big guys.
The local PC market is analogous to the task our technology companies face around the globe. It is a highly competitive market with a number of giant companies like Dell, HP and IBM battling it out with many, smaller Kiwi companies. What chance do the local guys really have?
Consumer Magazine received 10,000 responses to its survey. Their conclusion was that there was little variability in product performance, "You're no more likely to suffer a malfunction with a custom-built brand (i.e. local) than you are with a common brand (i.e. international)."
Many of the big brands got a bad rap from survey respondents. "They really didn't want to know about the problem or (as the case may be) did not have the knowledge to give advice. I paid for a three-year extended warranty and ended up getting a private technician to fix the problem."
Or this comment about direct PC seller, Dell, whose ranking "was slightly below average, and a common complaint was the overseas call centre and the difficulties of dealing with problems over the phone because the call centre staff weren't fluent in New Zealand English."
Contrast these sentiments to the comments about a small, local company a participant dealt with. "I buy loads of tech and this is my chosen store for much of it. Parking, price, models, options, and people who talk well about their stuff maintain my loyalty - which they don't make me carry a card to verify."
The happy conclusion is that there is room for the small guys to compete. "The bottom line? If you want good service after you've bought a computer, go to the little guys who specialise in computers."
This differentiation is not built around technological advantage i.e. a super clever PC, but the ability to service customers fast and effectively.
When you consider it from a customer's perspective this makes sense. When PCs were relatively new, many people preferred to buy off the big brands they knew and trusted. As consumers have become more familiar with the technology and accept that any PC will typically be reliable, they look for other unique benefits. Service being one.
This is embodied by Insite Technology, a subsidiary of listed technology company Renaissance. A Christchurch-based PC assembler that sells nationwide through a network of resellers, Insite have achieved good growth in recent years. And while the quality of their product is as good, if not better, than their multinational competitors, that's not what helps them be successful. Having a good product just allows them to play the game, they stand out because they offer better, faster and more flexible service than many of their competitors.
The success of Insite shows that small and smart can compete against big and powerful in the technology sector. That is encouraging for any Kiwi technology company. It is all about finding how you can stand out.
Local success story Eaton (formerly Swichtec) is an example of a Kiwi technology exporter that has done this. Their initial success was built on their technological capability, but increasingly their market has matured, with a bunch of huge industrial conglomerates offering products that are relatively similar.
Eaton (now part of a large US company) have built a new era of success by earning a reputation in the market for providing outstanding back-up to their telecommunications customers. This is built on a real service ethic and constant attention to finding better solutions for each customer.
Kiwi technology exporters need to find these differentiators to succeed. They can't simply rely on the technological aspects of their product.
So how can you determine how you really stand out? Like any marketing problem it starts with the customer. The idea is to gain clarity around these kind of questions:
- What challenges are your customers facing in their business?
- How does your offering help with one of those problems?
- What customers like most about your product/service?
- What customers like least about your product/service?
- What do they perceive as your weaknesses?
- What is the competition delivering?
- How do you compare to the competition?
- What are the objectives of your distribution channels?
- How does your product/service support those?
The insights that can be gained from objective discussions with customers or prospective customers are often profound. What you are looking to find is clear space - a way to position your company as distinct from competitors.
Kiwi technology exporters are up against it on the world market. There are many things needed to compete successfully, but one key is finding how they can stand out from the crowd.