a tutorial by

Dana Miller 

Introduction

             New Zealand is an excellent country for studying the subject of consumer behavior. Although small, far away, and seemingly insignificant to the American marketing student, there are actually many similarities between our two countries when it comes to lifestyles and purchasing behavior. Located in the Oceanic region of the South Pacific Ocean, and composed of two islands with an area about the size of the state of Colorado, New Zealand does not appear as a major player in world economy. In fact, when anyone in the world thinks of “New Zealand”, they might be much more inclined to think “vacation”. The volcanic dual-island nation is comprised of some of the planet’s most spectacular topography, such as Mt. Cook National Park, which contains literally hundreds of miles of remote off-road trails that make their way through majestic mountains, fjord inlets, and lush forests: the back country adventure traveler’s ultimate dream. (Benning 2003, Clynes 2002/2003, Ferrentino 2003) In fact, a prime vacation getaway is a quite accurate perception of the country when viewed from the outside. Revenues generated from tourism are a large part of the services sector of New Zealand’s economy, which makes up 67 % of the GDP (MSN Encarta Plus, 2003).

            So why study consumer behavior in New Zealand? What is our relationship to this small, but beautiful part of the world’s geography populated with less than 4,000,000 people known as “Kiwis”?  From a world trade viewpoint, Americans are very important to them. The United States is a main source of imports and is New Zealand’s 2^nd largest export destination, with Australia being the first. However, the purpose of this tutorial is not to analyze the economy of New Zealand in a global sense by studying their relationship with the rest of the world, but rather to present an analysis of the people and how they live in relationship to their own market within their nation’s borders. Lifestyle analyses of New Zealand consumers show how trends in lifestyles drive consumer behavior and their resulting purchases. (Farris, Lawson and Todd 1998) The fact that New Zealanders have many similarities in lifestyle and current trends as the American population possibly has paved the way for major American corporations, using very similar marketing appeal as used in the States, to successfully expand into the New Zealand market. Some of these include Starbucks, Pizza Hut, and Nestle.

Explanation of the Topic

Before viewing the consumer behavior of the New Zealander, it is important to understand who the New Zealander is. Where did the people of New Zealand come from? Having a glimpse into the history of a nation can heighten understanding of the behavior of a culture of consumers. Most of the population (about 75%) originates from European descent, primarily from Great Britain, who colonized the nation in 1840. New Zealand is independent, but remains connected with the United Kingdom as a member of the Commonwealth of Nations. The native inhabitants are a Polynesian people known as Maori who settled the islands around 1100 A.D.  The original name they bestowed upon the islands was “Aotearoa”, or “Land of the Long White Cloud”. Maori citizens comprise about 15% of the population, and have their own language and culture. However, only a small number are fluent in the Maori language. The remaining 10 % are made up of other Europeans, Pacific Islanders, and Asians.

Education is extremely important to the New Zealander. This is reflected in the fact that 99% of the population over age 15 can read and write. (The World Factbook). Tuition is fully covered by the state from age five until age twenty. Religion is somewhat important, but has shown a decrease in importance to the majority. The major religion is Christian, with various groups represented, such as Anglican, Presbyterian, and Roman Catholic. Some Maoris are Christian, and others practice their ancient religion.

Results of a New Zealand Consumer Lifestyle Analysis

In order to fully understand consumer behavior in any culture, the history as well as the lifestyles of the consumers must be analyzed. People buy what they need and want in order to facilitate living their present lives and reaching their future goals. Diversity in lifestyles provides the foundation for segmenting the markets. A study was done in New Zealand in 1989, which had gathered AIO (attitudes, interests, and opinions) data, demographic data, and product usage data. Established as the first successful study of its kind in the nation, it recognized six lifestyle categories amongst New Zealanders. The University of Otago repeated the study in 1995, adding a seventh grouping. Like Americans, New Zealanders are characterized by a diversity of lifestyles and preferences. The findings are summarized as follows (Farris, Lawson, and Todd 1998):

Characterized by traditional family values, this segment is made up of conservative, religious, family-oriented people who are active in their communities, churches, and schools. Most have three to four children. Educated and earning good incomes, they like to shop and they spend more time reading than watching television. They also are concerned with healthy lifestyles and make healthy food purchase choices.

Located mostly in small towns, the conservative quiet lifer is typically retired and/or widowed. Living solitary lives centered around their home, they have low education and income levels, however, and most are out of debt and own their home. This segment is the least inclined to shop for other than what they really need and are not interested in modern banking, technology, healthy or ethnic foods, or convenience products. They watch television, garden, and attend church.

Nearly one in ten New Zealander falls into this group. Although the smallest statistically of the segments presented in these results, this is a significant group of consumers where spending power is concerned. Most are very highly educated professionals who make a lot of money, and the typical educated liberal is a female. They are into healthy foods, exercise, and high-tech personal items. Because they are so busy, they eat out frequently and rely on healthy convenience foods. Two-thirds have no children and most rent their homes.

Consumers in this category aren’t ambitious or progressive. They watch a lot of television and don’t worry about how they look or if the food they eat is healthy. Beer consumption is highest in this group, and frozen pizza is a popular purchase at the grocery store. Shopping is not a pastime for enjoyment, but watching sports on television is. Most of the accepting mid-lifers are of European male descent, age 30-34, married with children, and have average incomes and education levels.

Power players in terms of consumer spending, the members of this group are rich and motivated. The majority are married, typically well educated and between 20-39 years of age. They are highly concerned with their image, both personally and professionally. Success-driven extroverts are most concerned with the quality of products they buy. Convenience foods and carryout dinners (the Kiwis call it “takeaway”) are popular. This group is concerned with appearance and health as well as socializing. They spend a lot of time exercising and dining out with friends. Alcohol consumption is regular.

Generally comprised of lower income unmarried females less than 35 years of age, this group is not made up of typical traditional families. About one-third have children at home. There is a high number of Maori and ethnic minorities represented in this group. Not highly materialistic, their consumption patterns and lifestyles reflect this in simple, natural living that they enjoy. Shopping patterns for the pragmatic strugglers are laced with concern for prices and there is overall high dissatisfaction with the prices, products, and service they receive. Skepticism toward advertising is characteristic of this segment.

Social Strivers like to shop and prefer items made in New Zealand, or items that are from a well-known brand. They are price conscious, and many times will choose the best price over quality.  Although they possess concern for their image and health, it is not demonstrated in their eating habits, as this group enjoys a high-fat diet laden with rich foods and desserts. The majority in this group is of lower education and income, with many unemployed, part-time, or retired. A high divorce rate is evident, however traditional beliefs concerning family, religion, and the community are of high value. Within this category are the highest number of Maori and other minorities represented in New Zealand’s population.
 

Current Trends in Consumer Behavior in New Zealand

Examining the diversity and similarities of the Kiwi consumers’ lifestyles gives marketers a workable foundation from which to develop their strategies in satisfying the consumers of New Zealand. In reviewing the seven segments that were created from the lifestyle analysis study, there are some notable trends and characteristics that are apparent and crossover between several groups. Purchasing trends have developed as a result of the lifestyle behavior. They are similar and comparable to those of the average American consumer.

To begin with, Kiwis want convenience products. Life is busy, and time is scarce. Does this sound familiar to the time-starved working American? Consumers in New Zealand are gobbling up pre-packaged ingredients and frozen meal kits, coffee drinks from espresso bars, and relying on take-out and delivery as a staple for nutritional survival. Frozen “Kiwi Meals” with traditional fare such as Shepard’s Pie, have seen strong growth to the tune of 17.2% last year. In fact, frozen foods have grown at twice the rate of other categories in New Zealander supermarket sales. This is attributed to the fact that people are increasingly “time poor” and need convenient solutions for meals (AC Nielsen 2001). Household sizes are getting smaller, more women are working, and everyone is working longer hours. In fact, the number of women entering the workforce in New Zealand over the last thirty years has doubled, marking the developed world’s largest gain in this particular statistic. (FMCG in New Zealand 2001) Factors like these result in increased demand for convenience products because people tend to shop more frequently, but purchase smaller quantities.

New Zealanders also demand healthy and wholesome food products. Sales of bottled water were the fastest growing item in the food and beverage category in the AC Nielson report for 2002. Interestingly, wine was the largest dollar-growth category, with an increase of 14% in sales. How many reports have you heard in the States over the past few years concerning drinking a glass of wine every day for your heart? Over half of Kiwi grocery shoppers look for items that are marked as “heart-friendly”, and 18% look for “organic” products (AC Nielsen 2002). Similar to fitness trends in the United States over the past twenty years, outdoor activity, sports, and exercise are also important to many New Zealanders. Improving the quality of life through proper nutrition and fitness is becoming more important as global education continues and consumers on both sides of the Pacific are made aware of the preventive measures contributed by healthy eating and living.

Along with being concerned about time management and nutrition, Kiwis are also beautifying themselves! Does this sound a little familiar to the typical American consumer? Over the years 2000-2002, there has been substantial growth in consumer spending in New Zealand in the cosmetics and toiletries market, despite market maturity (Euromonitor 2003). In fact, hair colourants was the #1 top growth category in New Zealand supermarket shopping, growing at a rate of 38.6% in 2001 (AC Nielsen 2001). Beauty products ranked even higher than food products at the grocery store! This market represents an extremely competitive environment with large multinational players such as Unilever Australasia, Proctor & Gamble NPD Inc., and Colgate-Palmolive NZ, and Clairol. There are also a growing number of  New Zealand-based companies developing wholesome beauty products using the pure ingredients from nature. Good economic conditions over the past few years have laid a foundation for people to spend more money on “extras” and feel-good products, which most beauty products really are.

In conclusion, what can the American marketing student learn from observing consumer behavior in a foreign country like New Zealand? Even if a career in global business is not in everyone’s future plans, all marketing students do have the same need to examine consumer behavior. By studying lifestyle analyses of new Zealanders, and the resulting trends in purchase behavior, the marketing student can gain understanding and insight in how to develop marketing strategies for any culture. Whether one is interested in the nation of New Zealand or not has no bearing on the basic principle of humanity communicated in this tutorial: the way people live affects the way people buy, and understanding their lifestyles is a key into understanding how to target the market.

Examples

A Demand for Convenience.

   www.pizzahut.co.nz

 Pizza Hut of New Zealand is owned by Restaurant Brands New Zealand Limited, who also owns both KFC and Starbucks franchises in New Zealand. Restaurant Brands is recognizing the need of the modern New Zealander for quick service and moderate prices. Restaurant Brands is changing the image they began with. Barely ten years ago, Pizza Hut of New Zealand was a dine-in restaurant that offered not only the typical pizza and pasta fare, but steak, fish and chicken! It was also a little expensive. Over the past few years, however, management is evolving the business into one that is walking hand-in-hand with consumer demand for convenience by offering delivery and take-out service. ( www.restaurantbrands.co.nz “All Change at Pizza Hut”) Furthermore, customers can take advantage of an online ordering system. Prices for the pizzas have also dropped from $25.00 per pizza five years ago, to an average of about nine dollars per single serve pie.

Statistics over the last five years from the retail trade survey of the New Zealand Department of Statistics showed the growth of spending on takeout and eat-in foods as compounding by 9% annually. This is nearly 3 times as fast as total retail trade, which compounded at 3.2%( www.restaurantbrands.co.nz “All Change at Pizza Hut”).

For somewhere fun to surf, click on the link above to Pizza Hut New Zealand and check out the menu of topping choices. Do you know what cabanossi and capsicum are? What about ordering a Spicy Apricot Chicken pizza?

A Demand for Healthy Products.

Shown here is an example of a healthy food product from Nestle. As you can see from reading the advertisement, the infusion pastes target the consumers who want all-natural, quick and easy to prepare meals.  www.nestle.co.nz/whatsnew/news.asp

A Demand for Beauty:

This company www.livingnature.com is one of quite a few Kiwi-based companies that presents a fine example of the modern New Zealander’s demand for pure beauty and skin care products. Products at Living Nature have been developed using non-synthetic ingredients from the land. Commitment to their use of pure and natural ingredients is a competitive edge that the indigenous companies have over the large American corporations, such as Clairol.

 Similar to the trend for men’s skin care products in the States, there is included in their product line a full range of men’s skin care products, as well as for women.

Natural and wholesome ingredients are becoming increasingly important to consumers, both in the United States and in New Zealand. This importance is seen not only in what is ingested as food, but with all products used for personal care. Living Nature, along with other beauty products companies from New Zealand, stresses their use of natural ingredients, such as honey and plants from their land. Wholesome, pure ingredients are in increased demand. It is also interesting to note that New Zealand marketers have responded to this global trend of natural-based products in not only the beauty industry, but also in their huge exports of wool www.woolboard.co.nz and also dairy products www.milknz.com where the motto is, “Pure products from a pure land…”

Test for Understanding

Please choose the best answer for each question. You can check your answers with the key provided at the end of this tutorial. 

1.      New Zealanders are also known as

a. Blokes
b. Islanders
c. Kiwis
d. Brits
e. Newzies

2.      Most of the population of New Zealand originated from

a. Polynesia
b. Europe
c. China
d. Australia
e. A and C

3.      Analyzing lifestyles of consumers is important for marketers because

a. Examining the diversity and similarities of lifestyles gives marketers a workable foundation from which to develop their strategies to satisfy the needs of consumers.
b. In order to fully understand consumer behavior in any culture, not only the history, but also the lifestyles of the consumers must be analyzed.
c. Diversity in lifestyles provides the foundation for segmenting the markets.
d. None of the above.
e. All of the above.

4.      What are three purchasing trends that are evident in consumer behavior in New  Zealand?

a. convenience products, fitness products, healthy and wholesome foods
b. convenience products, healthy and wholesome foods, beauty products
c. healthy and wholesome foods, electronic gadgets, beauty products
d. beer, pizza, rugby season tickets
e. convenience products, healthy and wholesome foods, sea kayaks

 5.      People in New Zealand rely completely on American-imported goods for the source of their beauty products.

      a. True
      b. False

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Answer key : 1) C,  2) B, 3) E, 4) B , 5) False

Relevant Web Sites

www.acnielsen.co.nz AC Nielsen media company in New Zealand

www.encarta.msn.com  Information on New Zealand

www.euromonitor.com/Cosmetics_And_Toiletries_In_New_Zealand Information on cosmetics and toiletries in New Zealand

www.kfc.co.nz/menu KFC Corporation in New Zealand 

www.livingnature.com New Zealand-based skin care products company

www.nestle.co.nz Nestle Corporation in New Zealand

www.odci.gov/cia/publications/factbook/print/nz The CIA World Factbook entry on New Zealand

www.restaurantbrands.co.nz Information on Pizza Hut in New Zealand

www.state.gov/r/pa/ei/bgn/2791.htm US State Dept., Background Note on New Zealand

www.asiamarketresearch.com/nz.pdf Lifestyle information on New Zealand consumers

www.woolboard.co.nz The New Zealand Wool Board

Bibliography

Benning, Jim. “Wild Horizons, (#09 Kiwi Hot Tracks)” National Geographic Adventure, p.56, February, 2003.

Clynes, Tom. “Sir Ed’s Fantasy Island,” National Geographic Adventure, pp. 61-72, 115-116, Dec 2002/Jan2003.

Ferrentino, Mike. “Gold of a Different Shine,” Bike Magazine, pp. 35-41, July 2003.

Other references can be found in "relevant web sites."