From humble beginnings as a refrigerator importer, to a company renowned for its design and innovation, Fisher & Paykel (F&P) appliances is one of New Zealand’s great business stories. It’s had a rough time of it in recent years, but it’s navigated those choppy recessionary seas fairly well and, with the support of new Chinese parent company Haier, it’s just launched 70 new and redesigned products simultaneously.
Sonya Aitken, F&P’s New Zealand marketing manager, admits the company, which is 80 next year, has turnover in excess of $NZ 1 billion and employs over 3,000 people worldwide, has been on a “challenging journey” recently. But she’s full of praise for chief executive Stuart Broadhurst, who worked tirelessly during the GFC to reduce debt, address some serious financial difficulties (as of late last year, it hadn’t paid a dividend since 2008), sell 90 percent of the company to Haier at what most pundits felt was a premium and still allocate resource to research & development and marketing.
While Aitken, who is part of a five-strong marketing team in New Zealand, wouldn’t discuss specifics about the budget for this roll-out, she says it’s the most significant investment the company’s made in above-the-line marketing in ten years. And from a product design, testing and engineering perspective, it’s been three or four years in the making.
So why now? And why all 70 products (the bulk of them are in kitchen and around 50 percent are completely new to its product lines) at once?
“We were doing extensive consumer research, getting into how people were using kitchens, what they were looking for and how their lives were changing. That gave us hundreds of insights and we realised we needed to change the appliances.”
As an example, because more people are now entertaining and dining at home, they were cooking bigger meals. So the latest oven was ripped apart and redesigned and now features 30 percent more capacity than any other oven in the same category with no reduction in performance (the patented ActiveVent technology reduces what she calls ‘hot spots’).
“Because F&P is small, we don’t have the luxury of economies of scale, so it’s about being smart, about understanding where our expertise is. And one of our core areas is quality.”
This focus on quality has led to a big investment in R&D in recent years. And she says it even extends to the types of knobs it uses on the ovens, which now match the knobs used on the gas cookers. She says the company often makes a call to use a product that might be slightly more expensive or has better recyclability, but that is its point of difference and because of the rapidly evolving—some would say nigh-on competitive—food culture and increasing cognisance around the environmental and social issues of obsolescence and over-consumption, she says there is a developing trend for consumers to pay a bit more for something that lasts the distance.
“They’re looking for quality appliances but they’re also looking for things that finish off their homes.”
No matter how well-designed they are, appliances will eventually break down. But more progressive businesses are increasingly trying to ‘close the loop’ by thinking about what happens to their products at the end of their life-cycle. F&P is well and truly on this bandwagon, she says. It has a full recycling plant in East Tamaki (it will recycle anyone’s products) and it will even come and pick up products from customers’ homes. This is obviously better for the environment than chucking old appliances in a hole in the ground, but making waste streams into revenue streams (like Nike’s Footbal World Cup jerseys that were made from plastic) and designing products with their death in mind also make better business sense.
Having the grunt of Haier has been helpful, she says, but it hasn’t affected the company’s innovative “heart and soul” or changed one of its core values of being curious.
“That’s why it was purchased. For its research and development capabilities, the strength of the brand and the company culture.”
And that mix has been acknowledged with its brand positioning of ‘everyday premium’, a seemingly oxymoronic phrase but one that she says companies such as Air New Zealand, VW and “everyone’s favourite” Apple, have embraced successfully.
“We do look at those companies and see what they’re doing, but it’s also about being true to our brand,” she says.
This new positioning has led to a few aesthetic changes, like the company colours going from blue to a more premium black and white, a change that can be seen across the spectrum, from the logo to the comms.
F&P has manufacturing plants in Italy, Mexico, Thailand and the US, as well as a manufacturing plant in East Tamaki for refrigeration and a design hub for cooking and dishwashing in Dunedin. Its products are now sold in 50 countries, so it is certainly a global brand and it needed a campaign befitting one.
The brief for Colenso BBDO, which won the business in a pitch against DDB, was to develop a campaign that could be rolled out across different markets, but also “create a connection back to New Zealand because we’re really proud of being a New Zealand company.” It’s difficult to make a global campaign that resonates with different markets and also takes into consideration cultural nuances, something even more important when dealing with food or domestic habits. But the core idea was very human: celebrating moments of life (typically, middle to upper class Western life) and how its appliances can help make life better. And so far she says the feedback on the campaign, which has seen F&P go back on TV for the first time in a few years, has been great.
Aitken says a big part of its marketing budget has historcially been spent on experiential activations, such as the award-winning Social Kitchen, which was developed by its design agency Alt Group. And it again with worked with Alt Group, as well as exhibition company DE Group, to create the national roadshow.
“It’s a chance to get face to face with the stories, and remind everyone of the connection to New Zealand. We recognised we had an amazing story to tell the people who work with consumers every single day. So we thought ‘let’s get out there and tell some of those stories about the amount of innovation’ … We’ve had really positive feedback from the retailers. And also from the designers, engineers and product testers, because they get to see how [their creations]look in cabinetry, or in video format.”
It has told some of those tales in the past with its Inside Stories campaign, which was created by BrandWorld and attempted to show how passionate its staff are. And this passion is also evident in its food blog, which shows that the people who make the appliances are as interested in food as those who buy them.
As part of the desire to make New Zealand the group’s R&D hub (as well as F&P, the stable of brands includes Haier, Elba and DCS Appliances), the company aims to employ another 100 scientists, designers and engineers. And F&P’s executive vice president of product development and marketing Daniel Witten-Hannah says they’re likely to all be ‘part chef’—if not already, then eventually.
“The company’s passion for cooking and all things kitchen is infectious. If you join us without it, it won’t be long before you’re in the kitchen, a bit obsessed with testing products like the rest of us. It’s part of what gives us our competitive advantage.”
Aitken relates a story of a designer who spent days testing what effects different metallic tapes used in its refrigerators had on the quality of butter. And that’s the kind of passion that permeates the products—and the kind of story that F&P is keen to get out there.
This is where magazines come in, she says. Aitken, who spoke at a recent MPA sales event, is a big believer in magazines and has a reputation for dealing direct with the publishers to create more engaging content and, by extension, more inspiration and emotion among consumers.
“I very firmly believe in working directly and sharing strategy and insights. We invited all of our engagement partners to the roadshow so they could have a Fisher & Paykel experience; seeing the products but also hearing the designers and seeing their faces.”
She says F&P’s chief designer for cooking and dishwashing Lauren Palmer has done some beautiful stuff with Dish, Urbis and Denizen in the past. And it also works with Home, Mindfood and Trends. It does have a “two-pronged approach” now and the intricacies of a global campaign mean it is also placing media in different markets through independent agency MBM, which conducted a global study into media consumption that, among other things, informed a decision to put more emphasis on digital and magazines and “carefully using them to create more inspiration”.
From a marketing point of view, she says the team has been involved the whole way through the process. And she says the company definitely sees marketing as an important cog in the wheel.
“There’s the product development stage and so many cool and strong messages come out of that. Then we need to link back to the insights the consumers give us. And the third part is the sales team. A big part of our marketing budget is working with our sales team and educating sales staff at the major retailers so they can convert interest into sales.”
The store is obviously an integral part of the purchase cycle, so it has also invested in a new point-of-sale system, which promotes product features, uses QR codes and is scheduled to launch in August.
She says F&P’s sales in New Zealand are going well at present and it’s maintaining, if not growing, market share. And the powers that be will be hoping the recent re-discovery of a largely unknown product feature—appliances that can play various tunes, including national anthems—will keep those numbers heading in the right direction.