Liam Dann on business

Business editor of the New Zealand Herald, Liam Dann, discusses New Zealand and international financial matters

Liam Dann: NZ Inc urgently needs a makeover

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New Zealand needs a makeover - the brand that is, not the place.

Okay, there's a few spots around the country that could also do with a spruce-up but the point made this week by Air New Zealand's chairman John Palmer and outgoing chief executive Rob Fyfe was a good one.

New Zealand's image as a global tourist destination is in danger of getting tired and needs urgent attention, Fyfe told Parliament's finance and select committee on Wednesday.

Tourism is the nation's second largest earner of export dollars - worth more than $8 billion a year. But unlike our largest export earner, dairy, it lacks a Fonterra to take our offering to the world.

It is a fragmented sector made up largely of small operators, a couple of decent-sized iwi operations and aviation players.

The burden to sell New Zealand as a destination falls heavily on Air New Zealand. In fact, it has been one of Fyfe's strengths in his time as chief executive.

And there's no denying the marketing success that both Air New Zealand and Tourism NZ have had in the past decade.

Underpinned by the nine-hour cinematic scenery show-case put together by Peter Jackson, tourist numbers have soared.

But the global financial crisis put the dampeners on growth out of lucrative markets like Europe, the UK and US.

Combined with the rise in jet fuel prices and the high kiwi dollar, New Zealand has lost its competitive cost advantage. It relies more heavily than ever on promotion as a premium destination. But the message is starting to get old.

Sure, Americans know where we are now.

We're that hobbitty place you go to if you like mountains, adventurous sports and laid-back, quirky people like those Conchords guys.

We're in danger of falling into the trap that caught out Australia's industry after the Crocodile Dundee highs of the 1980s. So, where do we go from here?

Keeping a brand fresh and relevant is not an easy task. It requires constant reinvention and innovation.

Somehow you have to manage that without losing sight of your core values. If you start trying to sell yourself as something you are not, then you are sunk.

No company in history has been as successful at finding that balance as Coca-Cola. Every year it has some hip new marketing campaign to connect with the next generation of teens.

It is one of the most liked commercial products on Facebook with something like 35 million friends.

It is just a flavoured fizzy drink, after all, the same old thing it has been for 100 years. It has a flavour that has been copied countless times since its launch in the 19th century.

Yet it is consistently among the most valuable brands in the world and is one of the largest companies in the world.

With the exception of an infamous misstep around the launch of "new Coke" in 1985 the brand's success is quite remarkable.

It always retains elements of its original 19th century design and packaging and is instantly recognisable.

It is big on values like vitality, the ability to add "life" and pep you up - though its actual ability to do that has been negligible since the removal of cocaine in 1903.

And it spends big.

Coca Cola Co (the US parent company, as opposed to regional bottlers such as Australia's Coca-Cola Amatil) spends about US$3 billion ($3.7 billion) a year on advertising on annual revenue of about US$46 billion. That's 6.5 per cent of every dollar earned.

New Zealand Inc faces the kind of dilemma Coke did perhaps 50 years or so ago and while it doesn't have hundreds of millions to spend it does need to look closely at how it is spending the money it has.

The worldwide release of the first The Hobbit film in December shouldn't be a bad thing, but we should be wary of relying on it or piggy-backing as we did with the Lord of the Rings series.

There is a risk of the New Zealand brand being hampered by Tolkienesque imagery in sophisticated markets and in Asia where it does not have such a cult following.

We need new ways to talk about the things that make us a good place to visit. We can't ignore the scenery but we should be making more of our food, wine and culture.

We're a Polynesian island in the South Pacific, not a mythic Nordic fantasyland.

If we're not "100 per cent Pure" that's because we are also a modern 21st century economy where you can keep tweeting and doing business while you lounge on the beach or kick back for a long lunch at a boutique winery.

We're going to need to spend some money if we want to get that message across and keep the visitor numbers up.

And, because we haven't got that much to spend, we're going to need a co-ordinated effort across a pretty disparate industry.

That requires leadership from the top.

Our Minister of Tourism, John Key, has a pretty tough day job but let's hope he was listening to Fyfe and Palmer - two individuals he must surely have a lot of time for - because the sector needs some attention.

twitter.com/liamdann

- NZ Herald

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