Shush! Don't say it's made in NZ

By RICHARD WOOD

New Zealand's health IT firms can grab a decent slice of the US$50 billion ($90.6 billion) US health IT market, but they must "veil" the fact they are from New Zealand and get their strategic plans together.

This advice comes from a Trade New Zealand sponsored report prepared by the UCLA in California. The report suggests market entry strategies for New Zealand firms in the biotechnology, creative industries, health IT, software, and wireless markets.

A key market for NZ health IT firms to target is the community health centre sector, which the report says plays into New Zealand's history of Government-funded health, whereas US IT firms are more used to operating in the private health arena.

The NZ health IT cluster has immediately moved to do further research, partnering with Trade NZ's Los Angeles office.

General conclusions of the report, not surprisingly, found that New Zealand firms should establish a presence in the US, build up US reference sites, and network ferociously.

But the report identified problems in saying that a product comes from New Zealand.

It suggests that health IT firms leave New Zealand out of their marketing materials and "veil" their origin as New Zealand firms until they have established more reference sites in the US.

Ten per cent of those surveyed said they would not buy NZ software, and 45 per cent said they would require an 8 per cent discount compared with US software.

"Companies should continue to veil their origin until they have proven their worth in terms of established performance in various installation sites. It is after such proven successes that the [health IT cluster] may wish to consider promoting the country brand," said the report.

Health IT cluster executive director Robin Ducker said a lot of money had been spent trying to get its branding right.

He said it was not a disadvantage to be from New Zealand, but New Zealand needed to correct its image.

"The UCLA report is trying to say to NZ companies not to rush in and say 'Hey we're from New Zealand'. Instead say 'here's the the value to the user', and then once you've established your credibility then you can reveal your NZ origins."

Ducker said New Zealand firms mostly have .com web addresses as well as .co.nz.

The report also pointed to dangers in creating an overall New Zealand health IT brand because it would take only one bad experience with a New Zealand firm "for irreparable damage to the brand to ensue".

In another vein, New Zealand health IT firms were found lacking in strategic planning, which the report said was essential for a subsequent marketing plan.

"When asked about the goal of the company in terms of revenue, many New Zealand company representatives were taken aback, and ultimately answered that the goal was to sell as much as possible. The development of a deeper, realistic understanding of the capabilities of the respective products is required," the report said.

The 333-page report was a result of 12,000 hours of work by 60 students at a cost of about $200,000, half of which was paid by Trade NZ, the other half by 40 participating companies and business clusters.

In the software security industry, the report identified opportunities in encryption, appliances, and monitoring. It was not so positive about the immediate potential in the AS/400, point of sale, and wireless markets.

Creative and design firms need to focus on niche areas or form alliances, and biotech firms need to collaborate more.

Trade NZ's beachhead project is aiming to provide a low-cost method for New Zealand firms to set up in the US, and it is expected that the survey will provide an ongoing relationship and further projects with UCLA and its alumni.

Trade NZ has identified the US market as the number one target for New Zealand ICT firms ahead of Australia and the United Kingdom.

Points of entry advice to NZ health IT firms exporting to US:

* Target community health centres

* Get US reference sites

* Do not disclose NZ origins in marketing

* No room for "me too" products.

* Prioritise service and support

* Focus on clinical applications