The marketing gap: The massive growth headache holding back small businesses

A question long hanging over New Zealand’s burgeoning small business sector is why so few manage to grow into sustainable businesses.

One contributing factor could lie in the fact that so few businesses have the
resources to invest properly in marketing. Without the economies of scale in larger countries, our small businesses rarely have enough budget to commit to marketing on a regular basis.

Marketing is sometimes derided as a nice-to-have, but there’s a reason why marketing is often referred to as the growth department. When done well, marketing can drive a business forward by increasing market share and opening the door to new opportunities. A product might be amazing, but remains hidden until you tell consumers about it – and this is the core challenge for smaller businesses. They simply don’t have the means, nous or time to tell enough people about what they’re selling.

Marketing Association chief executive John Miles tells the Herald that it’s often smaller businesses that are hit hardest by this absence of marketing budget and expertise.

“I don’t think there is a marketing gap in medium to large companies but yes there is a problem in small businesses.

“I believe some of the government programmes have missed a trick as they focus on deliverables rather than the thinking that needs to go in to decide which tactics should be used.

“There are no funding initiatives to help small businesses to develop their marketing skills and in fact, we have never even heard from anyone in government departments about how we might be able to help despite having every major organisation and agency in our membership.”

The Marketing Association is trying to fill this void through a number of initiatives that provide expertise to smaller businesses. The most notable recent effort is the Kiwibank Business for Better event series, which connects small business owners with the top marketing minds in the country.

Through this initiative, Kiwibank connected 70 small businesses from Tauranga, Hamilton, Christchurch, Wellington and Auckland with top marketing minds in the country over the course of five events in total.

“We have had over 200 marketers volunteer to help these businesses starting this week in Hamilton, and in Auckland we had to close registrations as 100 marketers volunteered their time,” Miles says.

“We have a huge array of people from all sorts of companies like Google, TradeMe, Wave Design, Plato Design, Tall Poppy, Research First, Fisher & Paykel Health Care, Frucor Suntory, Lion, LottoNZ and more.”

Among the top marketers involved was Kiwibank general manager of brand and marketing Simon Hofmann, who was declared Marketer of the Year at the 2023 TVNZ-NZ Marketing Awards.

“There’s a real gap in the market for small businesses across Aotearoa to get quality marketing expertise in a way that is accessible,” Hoffman told the Herald.

“We’re proud to be stepping in and filling that gap by bringing the marketing community together alongside the Marketing Association. We’ve heard from our customers that marketing is an area where we can provide additional value in a space that they may not be able to invest in themselves – for us this is all about business for better.

“It’s amazing to see how many marketers have volunteered their time and help solve a vast range of topics that are on Kiwi businesses’ minds whether that be AI, eCommerce, brand building, lead generation or understanding how they can use the vast number fast evolving channels that exist today. As a Kiwi-owned bank, we’re proud to be supporting Kiwi businesses in this way.”

While this series of events provides rare insight for these small businesses, it’s difficult for the Marketing Association to keep this going beyond the five events that have already been planned.

“If we were able to get funding to set this up we would love to do this,” says Miles.

“The NZ Marketing Association is completely self-funded and generates revenue from membership, learning and development and running events and associated sponsorships.”

Miles has called on the Government to do more to support the marketing of smaller businesses in an effort to give them the best possible opportunity to grow.

“I firmly believe that if more small businesses could get access to help in improving their marketing nous this would significantly help the New Zealand Economy,” he says.

“If the government looked at some funding in helping people’s thinking rather than always focusing on end deliverables, we could make a significant difference to their chance of success.”

Damien Venuto is an Auckland-based journalist with a background in business reporting who joined the Herald in 2017. He currently hosts The Front Page podcast.