Fair suck of the sav Blue, Kiwis are not like you

By Dita De Boni

When is a boldly emblazoned, brand-wearing Australian surf-lifesaving hunk not an Australian surf-lifesaving hunk?

When he's a New Zealander.

It seems what may be a basic and proudly brandished home truth for Australian and New Zealand consumers is only now permeating the psyche of major multinational corporations.

As a steady stream of marketing departments is lost to consolidation across the Tasman, several companies are starting to realise that the economic benefits of squeezing Aussie and Kiwi marketing functions together is being negated by antipathy in markets which like to be treated as distinct.

American-based cereal and snack company Kellogg says it is reaping the rewards of playing up the distinction, after several years of grafting New Zealand information onto Australian-targeted ads.

The company has mounted a serious fight for market share in New Zealand by shifting to locally inspired sales and marketing decisions, and in the process has helped grow the breakfast market to 34 million boxes in 1999 - half a million more than the previous year.

Kellogg NZ's $12 million account - held by J. Walter Thompson worldwide - is handled locally by up to 100 different people and from the day staff were assigned a New Zealand focus for the New Zealand-bound product, "things started to go much better," says John Collignon, the agency's general manager here.

"Before we set up a local sales team in 1997, the NZ market was something the force in Australia thought about half an hour before they went home on a Friday afternoon - if at all," he says.

The company's Michigan-based parent operates in five continents and reported sales of $US7 billion in the 1999 financial year. But recent reports suggest Kellogg has experienced a slump in dry cereal sales, leading to a slew of new initiatives, including new product ranges and a focus on regional marketing with alignment to market-specific causes (water safety a pre-eminent one in the Australasian market).

As New Zealand-bound Kellogg product is made in Australia and Asia, and that business is less than 10 per cent of total sales, differentiating the markets has not been a high priority.

And looking at New Zealand as little more than a blip on a global company's radar screen is hardly unique to Kellogg. As multinationals continue to withdraw manufacturing from New Zealand, marketing teams are often consolidated into Australian or Asia-Pacific centres.

American and European multinationals often view Australia and New Zealand as one group for marketing purposes, with the logical choice of Sydney or Melbourne as the base.

Companies that can afford a localised approach - huge conglomerates like Coca-Cola and KFC - have often led the pack with advertising acknowledging New Zealand's distinct cultural make-up, often using elements of Maori and Pacific Island culture.

For most companies the 1983 closer economic relations agreement with Australia, as well as shareholder requirements against inefficient duplication, has led to efforts to homogenise marketing campaigns.

Australia as a strategic centre is also tending to cede ground to centres like Singapore and Hong King for the Asia-Pacific market. For example, Levi's New Zealand and Australian managers had to fight to differentiate themselves as vastly different from neighbouring Asian markets a few years ago.

While the Asian markets aligned Levis with "Americana and the whole heritage thing," in Australasia "the market is influenced by the cultural climate, the outdoor lifestyle and a more relaxed culture. They're buying jeans here for a different reason," says Levi managing director Sue McCormack.

But Ralf Harding, managing director of J. Walter Thompson in New Zealand, says there are fundamental cultural differences between the two cultures.

"I think of it as the difference between "English" and "American" countries; perhaps even Irish-settled like Australia versus Scottish-settled like New Zealand.

"In Kellogg's case, the differences are more specific. New Zealand has the highest consumption of [ready-to-eat cereal] after England and Ireland, and there is a level of market maturity here that is quite unique," he says.

"Also, Sanitarium is stronger in New Zealand than in Australia - in Australia Weetbix does not have the same iconic status."

While Sanitarium - mostly through Weetbix - remains the consumer's breakfast favourite at 47.1 per cent of market share here, Kellogg grew its share last year to 20.4 per cent, up 3.2 per cent in a hard-fought market.

The redesign of the Kellogg ad/marketing strategy in the late 1990s involved a more selective campaign for its portfolio of products ("advertising seasonally or when it suited the market, as opposed to all brands always," says Mr Collignon), and a close alignment with surf lifesaving and the Heart Foundation.

The corporate sponsorship routes were modelled on overseas initiatives, but Kellogg had a trump card. In order to take on Weetbix, the company offered virtually the same product (Wheat Biscuits) and the same marketing approach (cute, energetic kids), but dangled higher margins in front of retailers.

In other words, the campaigns for Wheat Biscuits were not unique but picked up on tried-and-true, New Zealand-friendly formulas.

"That product [Wheat Biscuits] is a me-too product, no doubt about it," says Mr Collignon. "But we had to get into a market we had not been in, and offered something that was not a loss leader."

To service Kellogg, J. Walter Thompson still takes ads from Australia or anywhere else in the world where the creative fits the bill.

"But we've found a coordinated approach with promotions and campaigns that focus on New Zealand really does, obviously, work better."

While differences in cultural and ethnic mix, taxation, import controls and subsidies can affect marketing efforts, Dr Brendan Gray, senior lecturer at the University of Otago's Department of Marketing, rejects the notion that there is that much of a difference between the two sets of consumers.

"Unfortunately, in many product and service sectors there are only minimal differences between New Zealand and Australian consumers, in terms of their wants, needs and buying behaviours."

He says the trend to push marketing functions across the Tasman will continue "unless companies can see the benefits of a locally based marketing office outweighing the extra costs involved."

"As long as the Australian economy outperforms [our] economy, particularly in terms of disposable income and market growth rates, then the trend to centralising marketing and other business planning functions in Australia will continue," he says.

But even if there is no real difference between Aussies and Kiwis, one thing remains certain from countless consumer feedback forums: New Zealanders, like people in most other nations, are ethnocentric campaign watchers. They are spurred into a buying mindset by seeing Kiwis and hearing Kiwi accents in advertising.

A story from Marketing magazine finely illustrated the point: one company recalled an incident where creative was adapted to the local market but New Zealand accents were dubbed over Australian characters, as often happens.

The company was still receiving complaints from viewers wondering why they used Australian actors.