Tech companies growing but could be achieving more

Press Release – Concentrate

Annual PricewaterhouseCoopers and Concentrate study shows tech companies growing but could be achieving much more. Annual PricewaterhouseCoopers and Concentrate study shows tech companies growing but could be achieving much more.

31 May 2010. – The second annual “Market Measures” survey of sales and marketing activity by New Zealand technology companies has revealed average growth rates for 2009 of 39%.

“Growth is down on the 2008 year but still impressive,” says Owen Scott, Concentrate’s Managing Director.

Mr Scott said the Market Measures survey, conducted with 144 companies, painted a picture of brave but lonely pioneers battling it out in tough export markets.

“Even the smallest of our technology companies are trading offshore, selling directly to customers rather than through a distributor.

Too many companies were out there fighting for one sale at a time, rather than taking a more strategic approach to growing large scale businesses, he said.

“A symptom of this in the survey results is that while our exporters are positioning their products as premium they are typically only attracting market or below-market prices – that is leaving a lot of value on the table and constraining what they could achieve in terms of growth rates and size.”

The highest performing companies surveyed were taking a more strategic approach.

“Typically they are focussed about selecting target markets, have developed a strong and convincing positioning around their brand, invest in building brand awareness and demand generation, and work with resellers and other partners in their chosen market.”

Given the Government’s renewed focus on fostering innovation, there should be concern about this overall weakness in our ability to commercialise our products effectively, said Mr Scott

“Despite some obvious success stories, Kiwis don’t have a great record at commercialisation i.e. finding people to sell our inventions to at a profit.

“That New Zealand hasn’t yet built a lot of large scale technology-based businesses, with a few outstanding exceptions, is evidence of this commercial weakness.”

Concentrate and PricewaterhouseCoopers are running a national series of seminars to present the survey results and identify the main implications for technology companies looking to review their export marketing strategy.

A copy of the report and details of the seminar series are available on www.concentrate.co.nz

KEY FINDINGS FROM THE SURVEY

Background information

• Results were compiled from an online survey conducted in late 2009. It built on the survey conducted 12 months earlier, testing the same issues but also exploring some new areas.
• 144 companies participated, covering a range of technology exporters, including electronic, software, telecommunications and associated services.
• Auckland and Canterbury were the most common locations, and firms ranged in age from start-ups through to established companies (20 years +). Turnover mirrored national statistics, with a large number generating less than $1 million annually up to those generating up to $50 million plus.

Key findings

• The study showed a strong correlation between strategic marketing and exceptional growth performance; top performers are also effective users of social media
• Annual turnover growth down, but still an exceptional 39%
• 77% of companies export, mainly sell directly with a small team
• Companies position their product as premium but attract market or below-market prices
• Investment in sales and marketing is high at 40.1% of turnover, but focussed on the sales transaction
• Companies feel their greatest sales and marketing weakness was promotion, and rated social media, advertising and sponsorship as their least effective tactics

ends

Content Sourced from scoop.co.nz
Original url

 

No comments yet.

Write a comment: