Director’s Message

One of the ways to grow in challenging times is to differentiate yourself from your competitors and ensure that your service offering is in keeping with customers changing needs and demands.

At Brand Value we make it our business to research product trends and consumers needs. Here are some of the top five product trends, consumer needs and service demands that we have worked our brands towards:

Natural and eco friendly – More than ever before consumers are seeking out natural products and are looking to find more ecologically sound solutions to fulfil their needs. Following ecological and sustainable practices in business does come at a price, however the long term benefits far out weigh the short term costs. Good for the environment and good for you is no longer a cliché but a very real driver of sales. We publicise our commitment to these values and our customers and retailers are spreading and will continue to spread the message for us.

Specialised services – There is more pressure now than ever before for service-oriented businesses like salons to get their service and product offerings right. Time is money and the salon needs to review the time being spent in providing the service and the time required to set up for and clean up after the service. Specialisation also requires a commitment to training staff. Ensure that all the staff are aware of the value of differentiating the business from competitors and the importance of becoming experts in what they do. As an example, in recent years beauty salons have seen a big growth in specialised services like Brazilians that are in demand and provide a high margin to the salon. To provide a point of difference, significantly reduce cleaning time, provide a more luxurious service and reduce discomfort to clients, many salons in New Zealand have switched to using the new Phâro sugaring wax rather than the traditional hot wax. Specialisation requires a change of mindset and allows salons to focus on value services.

Social media and the web – Due to the abundance of products and services available, consumers are savvy and spend much more time researching online sites and media to find out what is good for them and what is not. Word of mouth spreads a lot faster now with social media and sites such as Facebook and Twitter. A personal endorsement from a friend is worth many times more than viewing an advertisement.

Quality does matter – If a customer likes your product/service they will most likely tell four others but if they do not like it they will tell at least 10! Pursue excellence, a high standard of hygiene and a commitment to using only the best products and in the long run it will pay dividends. Don’t trade long term reward for short term gain – remind yourself that you are building a business and not just making a sale. Avoid the temptation of making a quick profit by being price driven, using the cheapest products available and not paying attention to service. Compromising on quality of service gets noticed by customers and you may never be able to draw them back to your business. It is much harder to gain a new customer than to keep an existing one.

Grow New Zealand – In the past New Zealand businesses were often blind to the extremely high-quality products available in their own backyard and typically did not support New Zealand made products. There is now a strong trend that recognises that Kiwis need to band together in tough times and support New Zealand businesses. This is a win-win situation that results in keeping the money within New Zealand and increase the spending power of Kiwis. This in turn increases the discretionary spending of consumers which is directly linked to more customers to businesses. Additional benefits are the assurance of quality and the product and training support you get in buying a New Zealand-made product.

It is important for us as a business to see our customers as the final decision makers. We strive to recognise emerging trends early and take bold steps to position the business to take advantage of these. As business owners we can get distracted and make short sighted decisions but in the end it is the consumers of our products and services that will drive the sales. Consumers are past getting fooled by cheap marketing gimmicks and are more mature and look beyond the packaging, to products that actually deliver value.

At Brand Value along with product development, researching the market and client needs, our focus has been on monitoring global spa trends and this has led us to a successful launch of the Phâro brand in New Zealand and in many countries around the world. The Phâro Sugaring product with its natural, luxurious formulation makes hair removal a near spa experience and has gained wide acceptance among leading professionals. Our Radiessence brand has a wide loyal customer base around New Zealand and is quickly gaining market acceptance among salons and their clients across Australia.

The Family Business a Dying Institution in New Zealand?

March 2014

Can we allow the institution of New Zealand family businesses to die? It grieved me today to read of yet again another Family Business going into Receivership. This is become an all too familiar reality over the last 3-4 years and I believe it is time for our political, economic, national and local governing bodies to have a closer look at these occurrences and access the question of whether we can afford to see the death of Family business in New Zealand.

We all know of the family business start ups that have become great institution in this country two of the best known ones being the Farmers Trading Company and Michael Hill Jewellers who have contributed greatly to our economy in the form of jobs, taxes and products and services amongst other things.

In this case today here is what the NZ Herald has reported.

“A family-owned Auckland roading company that employs around 70 people in New Zealand has gone into receivership only days after winning an award.

Blacktop Construction was started around 40 years ago and has worked on the resurfacing of the Auckland Harbour Bridge for 17 years.

It won a Roading New Zealand Excellence Award on Monday night, with others, for its involvement with that project but on Wednesday afternoon was place into receivership. Receiver Brian Mayo-Smith from BDO New Zealand said Blacktop employed about 70 people in this country as well as some staff in Fiji”.

Asked what went wrong at the company, A Blacktop director and daughter of the company’s founder, Petah Dransfields said there was a “systemic problem” in the industry.

“In our roading industry, people are bidding very low tenders. For several years we’ve been basically doing New Zealand roading contracts for very low prices and debtors have been paying late and the outcome of that is we’re sustaining losses and running out of cash,” she said. There has also been some unconfirmed allegations that the big companies were involved in back hand deals and practices to keep the smaller companies out of the game, these practices were avoided by Blacktop Construction which has also contributed to their financial situation.

This is an all too familiar situation not just restricted to the construction industry, I have been closely associated with the Health and beauty industry for the last 11 years and I have seen family and small companies who have great innovative New Zealand made products get into financial difficulty as they cannot compete with the big International beauty houses who not only have larger markets but much bigger revenues and resources. In order to drown out the competition here they have also had the ability to dump products on the market here and at very low margins or incentivise, offer sweeteners or backhanders to buyers in distribution channels. The exclusive importers and agencies are left hapless as there is no protection for them against these big International Companies and the lack of legislation that legalises parallel imports is a knife in the heart of many smaller distributors.

A growing culture of ruthlessness in business and legalised bribes in the form of sweeteners, slack and unregulated parallel importing laws, poor regulation on quality of imports and lack of protection and assistance to our local companies could well see the death of family businesses who not only provide products and services for customers in New Zealand but have great International Export potential. When the downturn in the world economy began at the end of 2007 not many Family owned New Zealand companies had the resources to look at the situation and anticipate the next 5 years of change in consumer spending, the business environment and the change in the way customers would engage with businesses.

Fortunately Brand Value Ltd an IP Creation of Beauty Products and Brand Management company which I had founded in early 2007 was able to change tact and assess the situation and make plans and put additional resources to make the necessary changes over the last 5 years. The company when founded was developing and producing well over 80% for the New Zealand market, it now Exports over 80% of its products and 50% of its products that are sold here are sold directly to consumers though its on-line store. This required an absolute belief in the quality of the products which saw the company actually invest money in more research and development rather than react by implementing spending cuts. Identifying that the professional market for products would be a better place to invest than the retail market and putting in place an on-line presence to interact with customers resulted in an increased margin that helped fund the increased investment.

Making sales has not been the primary focus but maintaining and increasing margin over these times. As Blacktop have mentioned, in a cut throat market companies who simply chase sales are now facing difficulties. They sold or minimised their assets, cut costs and focussed on increasing their sales – all good elements of a sound strategy for any business small or large. However the problem occurs if a company implements the same strategy as a blanket rule without assessing its core strengths and value propositions. In order to support the overheads in these companies they begin to relentlessly focus on sales rather than margin, not noticing that their margin which is the life blood of a profitable successful future is slowly being eroded away. It is like entering a marathon and instead of the runner dealing and fixing the issue that is causing the limp in his leg just focuses on the finish line and hopes he will get there. The runner who stops and assesses the impediment and removes it and refocuses actually prevails in the end and has a chance of winning a medal for his efforts.

From a business perspective it is not lack of sales but an erosion in margin which is causing falling profits. Many family businesses lack the expertise, resources and ability to make these necessary changes hence the need for government assistance not just in the form of grants that only goes to keep government employees in work but actual market assistance and export grants for family run business. A lot needs to be done here to stop this erosion of the dying Family Businesses which I believe are the arteries of the economy and they are as vital as in the circulatory system where the arteries are vital for sustaining life. In the New Zealand Business Economy Family run business are vital to sustain Economic Health and Life, and also the delivery of innovation and growth to other sectors of the Economy.

Bernadette Soares is the Founder and Director of Brand Value Ltd. She has an Economics and Commerce background and a Masters in Business Innovation and Entrepreneurship. She is passionate about seeing New Zealand businesses grow and develop to their full potential. Bernadette feels strongly about her social responsibility to society and all the company’s brands support charities, sporting franchises or social causes. She uses her business endeavours to channel some of her resources directly and indirectly into the wider community.

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