PRODUCT REBRANDING RELATED TO MERINO WOOL IN NEW ZEALAND
Over the 1990s entrepreneurs in New Zealand created a new niche export industry by remarketing the wool of the merino sheep flocks, a traditional product that had been in decline. Ă˘â‚¬ËśThere has been a radical shift, in a relatively short time, from merino being a raw material export into it developing high-value markets,Ă˘â‚¬â„˘ according to Cheryll Sotheran, director of creative industries at New Zealand Trade and Enterprise, a government agency (Marsh, 2005b).
Just ten years earlier the merino segment had no strategic direction, little knowledge of its customers, limited new product or market development and suffered from a perception that all New Zealand wool was coarse. In the mid-1990s there was dissatisfaction with the generic, global approach to marketing wool as well as rising concern at the shrinking relevance of wool as the popularity of fleece-based and other synthetic clothing grew. Both the broader New
Zealand industry, and merino farmers in particular, decided to break away to form their own marketing organization. The approach has created a separate identity and niche for merino and engineered a better commercial outcome for farmers.
When the organization was formed, sales were conducted through auctions with volatile prices. Currently, they are grouped into supplier clubs, with about 70 per cent of local merino sold through contracts arranged by NZ Merino. The company, which is owned by farmers and Wrightson, a local agriculture group, has introduced a rigorous wool grading system that enables it to match buyers with the most appropriate suppliers. The most favoured market segment is outdoor clothing, the niche occupied by Icebreaker, which is growing fast. In 2005 it consumed about 25 per cent of local merino production, up from just 5 per cent in 2000.
After being repositioned as a distinct fibre, it has become highly prized by international luxury labels such as John Smedley, the British knitwear group, and Loro Piana, the Italian suit and clothing company, which developed its range of fabrics based on it. In New Zealand it has been intrinsic to the success of new companies such as Icebreaker, which produces only merino clothing.
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