Entrepreneurship in New Zealand Farming - Marketing and planningSome barriers to farm businessesavailable time.

Market acumen
Market research
Advertising
Product assessment and refinement
Broad-based market outlets
Market distance

Marketing and planning

Market acumen

Respondents demonstrated a determination to be successful, a formidable edge of market aggression. For many the secret of success is a commitment to high standards. They were all ‘hands on’ entrepreneurs with direct responsibility to their clients for their products and services. Some sought commercial advice and assistance as they identified their particular market niche. For others the ‘market’ approached them, in the form of tourist operators seeking either accommodation or fishing/guiding services. Others approached tourist operators or ran newspaper advertisements describing their activity. Several became aware of their niche market simply by observation then deduction — the realisation that they could provide for that particular niche. Burgeoning global trends were also market stimuli for some enterprises.

Market research

When asked if market research was carried out the response was often ‘what’s that?’ Few hired market consultants and of those who had (6) only three reported it as a useful experience. Market identification ranged from a nationwide feasibility study to personal perception. However, the majority identified their markets informally: ‘I checked up on other nurseries and I undercut them’. Several of the respondents carried out their own research through discussion (with experts) and reading, often of international literature. In the early days of the development of their enterprise at least two entrepreneurs hired stalls at exhibitions outside New Zealand. Others used national exhibitions (e.g. tourism, fashion) as showcases to establish their market and then set up their retail outlet. A number described their early days of door knocking as they identified their markets, noting with satisfaction that today their clients call them. The overall picture is that having concluded they had a marketable product or service, the entrepreneurs then went about the process of gaining their market share with a single and deliberate determination and a pragmatic approach to competition. There was an appreciation that competitive prices were possible because of low overheads. Most importantly, these farmer entrepreneurs were no longer price takers. They were in a position to set a competitive price for their enterprise products, maybe for the first time in their farming lives.

Advertising

Generally enterprises rely on industry sector advertising, tourist guide books and accommodation directories, advertisements in local newspapers, or designing and printing their own brochures. They also rely on word of mouth, including international clients. Some now enjoy ‘free’ advertising; they have an established reputation and are assured of business. Their enterprises feature in magazines, on radio or television. One reported that ‘winning awards’ was the way to advertise. But the most favoured strategy is encapsulated in the comment, ‘Yes, I went around the shops, spoke to the buyers, showed the product — and it worked.’

Product assessment and refinement

Forty-one per cent of the enterprises were either ‘constantly’ or ‘continually’ re-assessing, refining and adapting their products to market demand. For others ‘selling was proof of the market’ and adaptations were made if products didn’t sell. Some respondents reported that their products were ‘one off’ and that they did ‘refine’ them, but only on demand. These entrepreneurs were sensitive to market changes and were ready and able to respond to market demands — their responses give the impression of great product flexibility and the keen trader’s eye to produce what the market demands.

Broad-based market outlets

The major market outlet for under half of the enterprises was wholesale, followed by 43% favouring retail outlets and just under 20% reliant on mail-order marketing, reflecting the specialist nature of their products. At least 5 enterprises extended across these three market types, while mail order outlets ran in conjunction with both wholesale and retail outlets. The great majority of the enterprises have established a broad market base which is a combination of local, regional, national and international markets. Within that broad base there are a number of market mixes. A surprising finding of the study is that 32 of the enterprises had an international focus. This means that many of these farm based entrepreneurs have gained international marketing skills, in comparison to their experiences with traditional farm products.

Market distance

Generally distance from their markets did not create problems. Selling arrangements were factored into the management of their product. A number of South Island respondents raised the issue of inter-island transport costs which impacted negatively on their operation, noting that the high costs either deterred their continued penetration of North Island markets or reduced the extent of their market there.

Some barriers to farm businesses

Planning issues

Over a quarter of the respondents commented on planning issues. Generally they had negative planning experiences. Others, noted the lengths to which they had gone to ensure that they obtained all the relevant, sometimes costly, permits. They reported ‘bureaucratic delays’ and ‘huge red tape’. Road sign policies were the greatest single cause of frustration. Generally the reaction was that if tourism was a national economic necessity there must be greater flexibility in the road sign policies of local government and Transit New Zealand. Respondents on the boundaries of one or more District Councils also noted the cross-border confusion arising from un or inconsistent policies and attitudes to tourism development.

Other barriers

A number of other barriers were identified for the early stages of development of the farm enterprises:

lack of management skills, particularly labour management;
naivety and poor planning and preparation;
lack of recognition for their skills, getting known, achieving confidence and credibility;
difficulty obtaining finance;
breaking into the market against competition;
establishing standards and prices;
local government with either a ‘negative approach’ or ‘red tape’;
regulatory laws based on large enterprises and applied to small ones;
occupational health and safety regulations;
available time.