Learning curve for game exporters

By Yoke Har Lee

An effort to carve out a niche market for educational toys has thrown entrepreneurs Maurice and Marguerite Lovegrove into a specialised field that is demanding as well as exciting.

Competition from imported educational toys makes it demanding. But the business is exciting for the Lovegroves because of the potential to storm the world market with high quality wooden educational toys.

Brightway, based in Pukekohe, makes 250 lines of educational toys and puzzles and exports about 20 per cent of its products.

The Lovegroves' plan is to develop their largest market, Australia, and start working on new ones such as Japan.

Another strategy is to develop games for the higher age groups - the first being the Cathedral game, a property game which US Secretary of State Madeleine Albright bought when she was in Auckland last year for the Apec meeting.

Brightway was founded in the mid-1960s by teacher Bruce Clark and his wife Jean.

What started as small projects making resources for students and colleagues turned into a business enterprise, resulting in the commissioning of premises at Crosbie Rd in Pukekohe. The Clarks sold their business in 1983.

Mr Lovegrove left his insurance business in 1991 to take over Brightway with his son Stephen from a family then running the business at a loss.

Between 1991 and 1996, turnover for Brightway has grown an average of 12 per cent a year, tapering off over the last two years.

One of the first things Mr Lovegrove did when he took over was to identify from the myriad toys what was marketable and what was not.

"We are still working on that - retaining those with educational benefit that are marketable. Shops tend to only want to sell something with eye appeal."

Another thing Mr Lovegrove has done is to computerise the material handling process. That has allowed him to control inventory and manage the costing of material which runs into thousands of different components.

Mr Lovegrove said because everything was itemised, the company could easily replace parts of lost puzzles or games.

He pioneered the concept of cooperating with other toy manufacturers, recognising the limits of being small.

He founded the Quality Toy Manufacturers' Cooperative to help manufacturers do things more efficiently.

"This was way before Trade NZ developed their hard business network concept," he said.

The cooperative helps small toymakers build up economies of scale by, for instance, joint purchasing or joint freighting.

For small New Zealand toy and craft makers to continue flourishing, they have to turn into industries very quickly. "But that is fast reducing - the number of very good crafts people. That's because they can't get up and running as they need to be large industries quickly. We have been lucky we have been able to survive by the skin of our teeth. Most [toymakers] can't handle New Zealand, let alone the international market," Mr Lovegrove added.

New Zealand would have to break into the world market with high-quality wooden toys.

"It is the only answer for a small country. That's the only way to go. And unless we have got a unique marketing strategy, it is almost impossible to break into the world market," he said.

For small manufacturers such as Brightway, nothing is more useful than having some finance to help them explore potential markets.

Mr Lovegrove has been helped by the Japan External Trade Organisation to display his products in Japan but has had no help at all here.

The Business Development Board grant would be a help but Mr Lovegrove said for small companies it meant having to fork out a substantial amount to gain access to money the board offered.

The demise of the Business Development Board took away his only source of help for marketing finance.

He also felt the BIZ programme offered little for someone like him. "I went to a workshop on costing which I felt was a very important one for small businesses but got little out of it."

What would really help would be money to display products to the world. The internet was another option.

It is the Lovegroves' dream to be able to display their products at the world's leading toy fair in Nuremberg, Germany.

One of the most important lessons Mr Lovegrove has learned is that there is a price to be paid for being slow in developing markets as well as in protecting intellectual property for unique products.

It still pains him to talk about the company's lost opportunities with the Cathedral game.

"The lesson we learned was the need to develop and market something quickly to reap the benefits before the intellectual property is lost or before copies muck it all up for you."

Cathedral, he said, had the potential to develop further.

Brightway had also been an "absorber" of sorts for other small toy companies that had stopped trading or were thinking of stopping.

Mr Lovegrove has taken over the Kobba, Grandad's and Pinocchio ranges and has distribution rights for the Rainbow Connection.

What was he thinking when he took over the business?

He said: "We weren't really in for making a fortune. But it is a lifestyle business - in a very nice industry. There are lots of lovely people involved who appreciate quality toys and developed their own distribution business because of the love of it."

Age is Mr Lovegrove's dilemma. At 60, he wonders whether he will have the chance to put Brightway's products on the internet and "go global."