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Creating value through brands:

the ZESPRITM kiwi fruit case

Creating value
through brands

Department of Marketing, Faculty of Business and Economics, Monash

University, Victoria, Australia

383

Michael Beverland

Keywords Fruit, Brands, New Zealand, Relationship marketing, Supply-chain management

Abstract Agricultural products are generally characterised by their commodity status. After
years of poor returns, the New Zealand kiwi fruit industry developed the ZESPRITM branding
program in an attempt to position New Zealand kiwi fruit as an upmarket fruit category that
appealed to today's consumers. The brand has recently been released in New Zealand. This
research assesses the effectiveness of ZESPRI's strategy and explores the implications for branded
fruit produce in general. The level of brand awareness of ZESPRI was found to be low among
consumers, however brand awareness could be increased through a relationship marketing
program involving targeted marketing and supply-chain management.

Introduction
Aaker and Joachimsthaler (2000) stated that the development of brands was the
only way to remove oneself from commodity status and price competition.
Gardner and Levy (1955) defined a brand as ``[a] complex symbol that
represents a variety of ideas and attributes. It tells the consumer many things,
not only the way it sounds (and its literal meaning if it has one) but, more
important, via the body of associations it has built up and acquired as a public
object over a period of time'' (p. 35). Brand equity consists of awareness,
recognition, and top of the mind awareness of the product amongst consumers;
positive brand associations; perceived quality and brand loyalty. Brand equity
will result in price premiums, consumer and trade loyalty, trade co-operation
and joint marketing efforts and pride of ownership among the company (Aaker
and Joachimsthaler, 2000).
Traditionally producers of fresh produce have seen their responsibility for
the product end when their produce leaves the farm gate (Crocombe et al.,
1991). White (2000) stated:
Agricultural producers [have] focused on large volume throughput to a large number of
independent buyers who purchased unbranded, undifferentiated produce on an ad hoc,
transactional basis from the supplier who offered the best price and quality at the time
(White, 2000, pp. 7-8).

Marketing for agricultural products has often been left up to single desk
producer boards that have focused on increasing production efficiency, price
competitiveness and product quality in order to develop a competitive
advantage (Crocombe et al., 1991). However, Lichtenthal and Long (1998) stated
that it was no longer sufficient for agribusinesses to produce a technically
superior product. Miles et al. (1997) stated that agribusinesses would need to
adopt strategic planning models if they are to be successful in the future. These

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Vol. 103 No. 6, 2001, pp. 383-399.
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models will need to address the development of strong brands, a unique selling
proposition, the formation of close relationships throughout the supply chain,
and the development of a market orientation. A number of researchers have
identified a link between these strategies and market success (Katz and Boland,
2000; Hobbs et al., 1998).
After years of poor returns and the inability of New Zealand producers to
differentiate their products or earn price premiums for superior quality,
Kiwifruit New Zealand (formally the Kiwifruit Marketing Board) developed the
ZESPRITM program. Kiwi fruit currently account for 25 per cent of New
Zealand's total horticultural exports (Clark et al., 2000). However, little is
known about the effectiveness of brands in the fresh produce sector, and the
receptiveness of consumers of fresh produce to branded goods in general.
Recently, the ZESPRI brand has been launched in the New Zealand market.
This paper explores the level of brand awareness within the New Zealand
market for ZESPRI, the effectiveness of the strategy employed by Kiwifruit
New Zealand, and the implications of these findings for agribusiness in general.
The ZESPRITM story
In 1987 the New Zealand kiwi fruit industry was estimated to account for 60
per cent of total world kiwi fruit sales (Crocombe et al., 1991). Kiwi fruit thrive
in New Zealand's temperate climate and for most of the 1980s the industry
enjoyed significant cost advantages over other producers. During the 1980s,
New Zealand kiwi fruit were marketed through the New Zealand Kiwifruit
Marketing Board (NZKFMB). To counteract the power of overseas buyers the
government established producer boards with ``single desk selling'' provisions
that enabled them to be the sole marketer and export distributor of their
specific products. While the kiwi fruit industry was first developed in New
Zealand, the barriers to establishing kiwi fruit orchards elsewhere were
relatively low. Consequently, growers in Italy and Chile rushed to plant kiwi
fruit. This resulted in the supply of kiwi fruit greatly outstripping demand and
prices of kiwi fruit in international markets collapsed. The kiwi fruit industry
of New Zealand had failed to protect the use of the name ``kiwi fruit'' and were
unable to differentiate their product from lower cost Chilean and Italian
counterparts who could market their product under the name ``kiwi fruit'' even
though it had no association with New Zealand.
Crocombe et al. (1991) noted that orchardists incurred high risks, heavy fixed
and variable costs, undertook long-term investments, were at the mercy of
consumer demand and climatic conditions and received relatively low returns.
In summary, Crocombe et al. (1991) stated that this industry was a price taker
rather than a price maker in export markets. They also stated that the New
Zealand kiwi fruit industry might have lost the opportunity to determine its
forward path.
In response to this, Kiwifruit New Zealand developed a new structure and
branding strategy under the name ZESPRITM. The new strategy was an

attempt to develop a market orientation within the kiwi fruit industry.

Kiwifruit New Zealand stated:
ZESPRI International is a market-driven, consumer-led international marketing company
and, as such, is structured from the market back to the orchard, rather than the other way
round.

The brand strategy aims to differentiate New Zealand kiwi fruit, marking it out
as a premium product, moving it from the category of perishable commodity
into the premium-priced consumer goods bracket. Branding is a key element in
the strategy, which aims to grow consumption of kiwi fruit by positioning it as
an ``exciting mainstream fruit that is eaten daily''. The brand challenge for
ZESPRI International was:
.
To establish a point of difference between ZESPRI kiwi fruit and other
kiwi fruit.
.
To identify the global brand equity of ZESPRI the core product values
and the consumer emotional triggers of the brand.
.
To find the brand positioning idea that encapsulates all the elements of
the ZESPRI brand equity.
.
To bring ZESPRI to life find the brand's eccentricity its difference.
.
To go beyond traditional research with brand concepts not only to find
out what is, but also what could be.
.
Over time, to develop a new category of fruit.
Research indicated that kiwi fruit eaters felt a strong emotional attachment to
the fruit. This led ZESPRI to develop the positing statement ``puts life into life''.
ZESPRI noted ``Its New Zealand nature was a very important component of the
brand and had to be incorporated, given the equity we had in our country of
origin''. The company is committed to remaining based in New Zealand,
producing New Zealand fruit. ZESPRI promotes kiwi fruit as a product that can
be eaten at any time during the day, whether it is a meal or a snack. The same
research showed that consumers were not fully aware of kiwi fruit's nutritional
benefits, so ZESPRI aims to promote this issue in its marketing campaigns.
ZESPRI New Zealand kiwi fruit is positioned as the fun, vibrant, healthy, good
tasting fruit for all the family. It is valued for its unique nutritional qualities,
particularly its rich vitamin C content, its consistent quality, superior taste and
environmental soundness. This positioning is contained in Table I, which
shows the results of research conducted by ZESPRI International on
consumers' perceptions of fruit and kiwi fruit. The table also contrasts this
with the desired positioning of ZESPRI.
ZESPRI International markets four key varietals of kiwi fruit: ``Organic'',
``Jumbo'', ``Gold'' and ``Green''. These new varieties of kiwi fruit were developed
in partnership with the former government owned ``HortResearch'' (who still
own the rights to these varieties of fruit) and ZESPRI International. These new
varieties were developed in order to appeal to different markets. For example,

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Positioning

Fruit

Kiwi fruit

ZESPRI

Personality

Good but
unimaginative

Exotic

Charismatic,
surprising, enjoys
life, intriguing, an
inspiration, an
achiever

Values

Wholesome/virtuous

Vitality

Rewards

Good for you

Good for you

Real, genuine
integrity, originality,
healthy and active
Feeling good about
life

Functional benefits

Healthy enjoyment

Refreshing taste,
healthy enjoyment
for many eating
occasions

Refreshing taste,
healthy enjoyment
for many eating
occasions

Attributes

Taste, nutrition,
convenient ready to
eat

Taste, nutrition,
ready to eat

Taste, nutrition,
quality, ready to eat,
appearance

386

Table I.
ZESPRI's desired
positioning relative to
fruit and kiwi fruit

the ``Jumbo'' (not released in New Zealand) variety is designed to be placed in

children's lunchboxes. The ``Gold'' variety was designed primarily for Asian
markets where the colour gold has positive connotations. This variety is also
sweeter, which also appeals to Asian consumers. The ``Organic'' variety was
developed in a response to consumer demands for organically grown produce.
Until recently, ZESPRI branded kiwi fruit were not sold in the New Zealand
market. However, in 2000 ZESPRI International launched approximately
38,000 tray equivalents (out of a total of 59,400 trays as at June 1999) of
primarily ``Green'' branded fruit into the New Zealand market (Kiwifruit
International, New Zealand, 1999). The fruit would retail at NZ$1.99 for a bag
of ten (the bag would not be branded with the ZESPRI logo). Prior to this, kiwi
fruit had been largely sold as bulk produce, with little or no branding or
packaging. Despite the lack of product availability, ZESPRI had a high profile
in New Zealand. A number of television documentaries aired on national news
programs had highlighted the development of the strategy, new types of fruit,
and the research program. The company is targeting adult consumers aged
between 18-50. The overseas success of the program (increasing grower returns
and kiwi fruit prices) has also received widespread news coverage. More
importantly, the program and brand were well known in the New Zealand fruit
trade.
The export program has so far been successful in increasing returns to
growers. The 1999 Annual Report for Kiwifruit International stated that
adjusted orchard gate return (the key measure of profitability for growers), was
NZ$257.9 million up from NZ$157.6 million in 1997. This equates to NZ$23,753

per hectare in 1998 compared with NZ$15,386 in 1997. The ZESPRI ``Gold'' kiwi
fruit was successfully test marketed in Japan, the UK, and New Zealand. Global
net revenues from sales of kiwi fruit were NZ$695 million, up 29 per cent on the
previous season. Net distributable returns to growers were up 27 per cent to
NZ$410.6 million as against NZ$323.3 million in 1997-1998. The report stated
that although the exchange rate was weak, success had come from increased
volumes and values of kiwi fruit sold (Kiwifruit International, 1999).
Method
The research was conducted in two phases. First, a series of qualitative
interviews were conducted with a distributor, ZESPRI International's Market
Analyst, Brand Manager and Regional Manager for Australasia (who provided
background material). The aim of these interviews was to gain some
background material on to the ZESPRI story, perceptions of how successful the
brand was, and the views of the major trade buyer in New Zealand (who
accounts for 90 per cent of all produce distribution in the country). A secondary
aim was to explore the branding topic with the aim of highlighting key issues
to be measured in the survey. Following this, a draft mall intercept survey was
developed and pre-tested amongst a small pilot group of consumers. Data was
collected outside three major supermarket chains (there was no difference in the
results due to location) in Auckland New Zealand. The sample was taken from
a population of adult (18 years and above) kiwi fruit consumers. The survey
was split into five sections:
(1) kiwi fruit-eating habits;
(2) kiwi fruit-purchasing habits;
(3) brand awareness;
(4) perception of ZESPRI; and
(5) demographics.
The questions contained a number of fixed option and five-point Likert scales.
In total, 106 surveys were completed. The surveys were coded and entered into
SPSS for analysis.
Findings
The results of the qualitative interviews are presented below in Table II.
Overall the interviewees agreed that branding fresh produce was worthwhile
and was an important part of guaranteeing quality and building customer
loyalty, although with regard to the ZESPRI brand, the respondents agreed
that the brand was young with end consumers. The ZESPRI representatives
believed there was significant brand awareness amongst the trade, a fact
confirmed by the distributor, although he believed that ZESPRI branded fruit
needed to be supplied all year round, wanted brands exclusive to his chain, and
noted that with all the recent media attention being focused on the new
varieties, that consumers confused the name ``ZESPRI'' with the new varieties

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Brand equity for fresh

fruit

Brand equity for ZESPRI

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Table II.
Results from the
qualitative interviews
Interviewee

Is there merit in branding

fresh fruit?

Are New Zealanders brand

loyal?

Distributor

Growing awareness of
branding
Branding represents
consistent quality
Cost is still an issue
Keen to see growth of
brands in store

Misconception that
ZESPRI was the new
name for a kiwi fruit
variety. This is slowly
changing and people
now recognise that the
brand stands for high
quality NZ kiwi fruit
Need a 12-month supply of
ZESPRI

Yes. We aim to work

with producers to
develop brands that are
exclusive to our chain

If people like the brand

then they are loyal,
however if the price is
too high, they will go
without the product

Market analyst ZESPRI

International
Brand manager ZESPRI
International

Brand equity is a
reassurance that helps
the customer purchase,
but doesn't directly lead
to the purchase
Brands of fruit need to be
linked to images of high
quality and consistency

There is some recognition

in more developed
markets such as
Germany and Japan, but
not much else
High recognition at trade
level and in time trade
will help build brand
equity with consumers

Branding is the only

means of separating
your product from
similar products in the
same category. It is also
the only link that
consumers can form
with your company.
Brands help to reinforce
messages such as
quality, country of
origin, variety and can
add an emotional
dimension to the process

New Zealanders still

trying to understand
brand

of fruit, rather than viewing it as a new brand (this was slowly changing). The
interviewees believed that branded fresh produce is new to most New
Zealanders and therefore they may be unwilling to pay a large price premium
for branded fruit. The distributor also pointed out that while brands may be
able to get a premium, the premium cannot be too large, and sellers will need to
make sure that consumers recognise what the brand stands for. Finally, the
distributor was keen to work in conjunction with suppliers of produce to
develop brands and branding programs. This view was different to that of the
ZESPRI representatives who believed that trade would make consumers aware
of the brand. This is reflected in the ZESPRI strategy, which does not market
directly to the trade. The fact that the distributor was keen to see the growth of
brands in store, wanted to work with suppliers, and believed that brands
needed to take into account cost (suggesting that value, not quality per se might
be a better positioning statement) suggests that there is an opportunity to
develop relationship marketing programs at a business-to-business level
between ZESPRI International and distributors.
The demographic characteristics of surveyed consumers are outlined in
Table III. There is an over representation of females in the sample, although
this was not considered a problem given that ZESPRI International considers
females an important target market (especially for ``Green'' kiwi fruit). The
Item

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Percentage

Gender
Female
Male

57
43

Age
< 20
21-35
36-50
> 50

3
61
22
14

Employment status
Full time
Part time
Not employed

84
12
4

Household status
Single no children
Married with children
Married no children
Single with children

46
34
14
6

Combined household income

< $20,000
$21,000-50,000
$51,000-80,000
> $80,000

4
26
27
43

Table III.
Demographics of
sample

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location of data collection may also have influenced this result, as females still
do the majority of the food shopping in New Zealand. We felt this would not
adversely impact on the final result, as understanding the perception of the
ZESPRI brand among the people making the purchase decision was important.
The differences between females' and males' perception of the brand and its
attributes are shown in Table VIII. As Table IV illustrates, females were more
likely to consume kiwi fruit at home than males. There is a reasonable
representation of all ages, income levels and household status.
Table IV highlights that the majority of the sample is not regular users of
kiwi fruit, although we believe that this result may have a lot to do with the
seasonal nature of kiwi fruit. In order to get a high percentage of everyday
users; kiwi fruit would have to be available all year round (a fact highlighted by
the distributor interviewed). The New Zealand kiwi fruit season runs from May
to December and New Zealand consumers are unlikely to buy imported kiwi
fruit (see Table V). The majority of respondents used kiwi fruit as a general
Descriptor

Table IV.
Use of kiwi fruit

Percentage

Frequency of use
Every 3-6 months
Once a month
Several times a week
Everyday

64.7
18.8
15.3
1.2

When do you eat kiwi fruit?

General snack (any time of the day)
Desert
Breakfast
Lunch
Morning tea
Afternoon tea
Dinner

62.8
15.0
9.3
4.7
3.5
3.5
1.2

Type of kiwi fruit eatena

Green
Gold
Organic

74.5
30.2
16.0

Who eats kiwi fruit in your household

Female adult
Male adult
Children under 18

48.8
37.2
14.0

Place of purchase
Supermarket
Fruit and vegetable store
Other

67.1
31.7
1.2

Note:

More than one answer was possible to this question

Descriptor

Mean

SD

Region of origin
Purchase NZ label only
Origin not an issue
Purchase overseas only

2.57
3.08
4.03

1.29
1.29
0.97

Organic vs. non organic

Growing method not an issue
Purchase only organic
Purchase non organic

2.67
3.28
3.47

1.22
1.10
0.94

Price sensitivity
Price not an issue
Pay extra for a preferred brand
Always purchase the cheapest

2.70
3.21
3.61

1.20
1.20
1.09

Motivation to buy kiwi fruit

Seasonality
Freshness and quality
In store discounts
Brands
Habit

2.04
2.20
2.88
3.27
3.28

1.06
0.97
1.23
1.20
1.31

Reason for eating kiwi fruit

Healthy/nutrition
Taste
Refreshing
Convenience

1.95
2.00
2.26
2.79

0.97
0.86
0.95
1.08

snack food. Given that ``Gold'' and ``Organic'' kiwi fruit have only just been
released in limited numbers into New Zealand, the response for ``type of fruit
eaten'' was expected. However, the high usage of ``Gold'' fruit suggests that
ZESPRI International has a potential winner on its hands with this variety and
should consider increasing the amount of fruit available in New Zealand. Adult
females eat the majority of fruit. ZESPRI targeted females partly in the belief
that they would buy kiwi fruit for their children, however there is little evidence
of this occurring. Perhaps ZESPRI would be better off highlighting the health
benefits of the fruit to adults, as well as giving greater emphasis to the
nutritional and health benefits of kiwi fruit use for children. As was expected
most consumers purchase their kiwi fruit from supermarkets and fruit and
vegetable shops.
Table V highlights some key aspects of consumer behavior in relation to kiwi
fruit. Interestingly, region of origin was not that important for kiwi fruit buyers.
It may be that consumers expected kiwi fruit to come from New Zealand, or it
might be that the past failure to differentiate the product has meant that
consumers are unaware of the differences between overseas and local kiwi fruit.
The method of production is relatively unimportant, although given consumer

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Table V.
Consumer behavior
(1 = strongly agree,
5 = strongly disagree)

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concerns about non-organic production, the ``Organic'' range may be better

targeted at consumers who express these concerns and are willing to pay a
premium for organically grown fruit. Consumers were relatively price sensitive
when it came to kiwi fruit. However, the majority of consumers do not buy on
price alone, with freshness/quality and seasonality the two biggest motivations
for purchasing kiwi fruit. Consumers were unlikely to pay extra for a preferred
brand of fruit (nor were brands seen as that important), although they may pay
extra for quality, freshness, and in-season fruit. Most consumers eat kiwi fruit
because of its health and nutritional benefits, and taste. ZESPRI has
incorporated these issues into its advertising campaigns. Convenience was also
relatively important and perhaps more emphasis on this could be incorporated
in advertising campaigns aimed at positioning kiwi fruit as a snack food (this
would also require packaging changes).
Table VI highlights the level of brand awareness for ZESPRI. Less than half
of the respondents had seen the ZESPRI logo, suggesting that the company still
has much to do to establish awareness of the brand (and supporting the claims
of the interviewees). Although ZESPRI does not have the level of brand
awareness of other fruit brands this may be due to the relative newness of the
brand. Seen in the context of low levels of marketing (consisting so far of
sponsorship and promotional events), a 48.1 per cent awareness rate is quite
high and bodes well for the future of the brand in New Zealand. Given that
ZESPRI branded fruit have only recently been introduced on to the New
Zealand market it is no surprise that most people have seen the ZESPRI logo on
fruit labels, packaging and promotional material rather than through more
traditional marketing mediums such as television and newspapers (which have
yet to be developed).
Descriptor

Table VI.
Brand awareness

Have you seen the ZESPRI logo?

Yes
No
Branded fruit awareness
Sunkist (Oranges)
Chiquita (Bananas)
Dole (General)
ENZA (Apples)
ZESPRI (Kiwi fruit)
Yummy (General)
Where have you seen the ZESPRI logo?
Labels
Packaging
Promotional material
TV
Magazines
Newspapers
Bill boards

Percentage
48.1
51.9
67.0
63.2
61.2
57.5
48.1
20.8
31.1
18.9
17.9
8.5
7.5
5.7
4.7

Tables VII and VIII below highlight consumer attitudes to ZESPRI as a brand.
Consumer reaction to the brand name and brand attributes was neutral at best.
Given that ZESPRI is targeting adults aged between 18-50, the mixed reaction
to the ZESPRI name, the association of quality with that name, and the view of
the brand as ``energetic and lively'' is of concern. Consumers understood that
kiwi fruit had high nutritional benefits and agreed that ZESPRI needed to have
a stronger marketing presence in New Zealand. They were also keen to try new
varieties of kiwi fruit. However there was a negative reaction to the slogan
Descriptor
ZESPRI is a suitable brand name for NZ kiwi fruit
ZESPRI represents high quality NZ kiwi fruit
You would purchase ZESPRI over other branded kiwi fruit
ZESPRI NZ kiwi fruit had high nutritional benefits
You agree with the brand's slogan ``ZESPRI puts life into life''
The ZESPRI brand is lively and energetic
ZESPRI should have stronger marketing presence in NZ
You would try new varieties of kiwi fruit if you recognised the ZESPRI brand

Descriptor
ZESPRI is a suitable brand name for
NZ kiwi fruit
ZESPRI represents high quality NZ
kiwi fruit
You would purchase ZESPRI over other
branded kiwi fruit
ZESPRI NZ kiwi fruit had high
nutritional benefits
You agree with the brand's slogan
``ZESPRI puts life into life''
The ZESPRI brand is lively and
energetic
ZESPRI should have stronger
marketing presence in NZ
You would try new varieties of kiwi
fruit if you recognised the ZESPRI
brand

Mean

SD

2.70
2.69
2.90
2.20
2.76
2.48
2.06
2.44

1.04
0.96
1.05
0.78
0.87
0.95
0.91
0.95

F Female F Male
F Female F Male neutral- neutralpositive positive negative negative
responsea response responseb response

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Table VII.
Attitude to brand
(1 = strongly agree,
5 = strongly disagree)

Total

30

12

41

23

106

29

11

41

25

106

27

43

27

106

49

21

21

15

106

18

53

27

106

39

15

31

21

106

42

28

28

106

43

19

27

17

106

Notes: Results for this question were recorded using a five-point scale with 1 = strongly
agree, 5 = strongly disagree. Positive results represent all recorded results that registered a
1 or 2 to the question at hand; b results for this question were recorded using a five-point
scale with 1 = strongly agree, 5 = strongly disagree. Neutral to negative results represent all
recorded results that registered a 3-5 to the question at hand

Table VIII.
Cross tabulations of
ZESPRI program with
gender

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``puts life into life''. Consumers were also unlikely to prefer ZESPRI to other
branded kiwi fruit. However, the demand for more marketing activity, the
neutral reaction to the name and brand attributes suggests that the brand is in
the early stages of development in New Zealand (see Table II for the
distributor's view). ZESPRI could build their marketing campaign on the
nutritional benefits of the fruit and through the release and promotion of new
products (rather than focusing solely on ``Green'' kiwi fruit).
Discussion
From the results we can see that ZESPRI still has some way to go to gain brand
leadership in New Zealand, and towards reaching its desired positioning (see
Table I). The brand has a relatively high level of awareness given the low levels
of marketing in New Zealand[1], but ZESPRI needs to do more if the brand is to
gain the level of awareness of other fruit brands. Within the trade, brand
awareness for ZESPRI is apparently high and trade customers also understand
the link between the brand and product quality. This suggests that the ZESPRI
program has only retained the positioning of kiwi fruit in relation to the
functional benefits and attributes, rather than achieving the desired positioning
for the brand (see Table I).
The high uptake of ``Gold'' kiwi fruit suggests that more work needs to be
done on ZESPRI's brand architecture (see Figure 1). Rather than stressing the
generic brand ``ZESPRI'', the company could place greater stress on the

Figure 1.
Brand leadership

individual varietal sub-brands and build up the generic brand awareness over
time. Building sub-brand awareness would require the development of targeted
marketing campaigns. The ``Organic'' kiwi fruit could be targeted at consumers
concerned about non-organic production and should be placed in natural/
organic food shops. Both ``Green'' and ``Gold'' fruit should be targeted at adult
consumers more so than at children. ZESPRI also needs to carry out further
segmentation work in order to improve the targeting of its brands to kiwi fruit
consumers.
Although consumers are unlikely to pay extra for the fruit, the majority of
kiwi fruit consumers do not purchase on price alone. One way of getting a
premium would be to stress the benefits of convenience, quality and freshness
through an advertising campaign. Highlighting the entire range of new
products may also help build the view that ZESPRI is indeed innovative,
energetic, and surprising.
The packaging of the fruit in the local market also leaves a lot to be desired.
Rather than packaging them in the convenient six packs used in overseas
markets, the fruit is packaged in netted bags of ten and branded with a small
sticker on each piece of fruit. This is hardly in keeping with ZESPRI's desired
image or positioning as an up-market convenient snack food. Given that
convenience was an important factor in driving kiwi fruit choice, ZESPRI
should use the same packaging in New Zealand as it uses in overseas
markets[2]. This would provide greater opportunities for promotion and brand
advertising as well as help position the product as a high quality, convenient
fruit. It would also help ensure that ZESPRI reached its desired attribute
positioning (see Table I) on the issue of design.
Aaker and Joachimsthaler (2000) stated that the key factors in developing
brand leadership included the development of a range of consumer, distributor,
and organisation related programs. These are shown in Figure 1. What is clear
from this figure is that focusing on marketing direct to consumers is only a
small part of developing an effective brand. Producers will need also to focus
on developing brand support structures within the organisation, a range of subbrands, close relationships with distributors, and other members in the value
chain. This suggests that a relationship marketing strategy will be more
effective for developing a brand than a traditional transactional (one off, mass
marketing) approach (Gronroos, 1996).
The development of relationships with strong retailers is critical because
these retailers often have significant power and more importantly, strong
brand equity among their customer base (Hughes and Merton, 1996). The
development of relationships throughout the entire supply chain utilising
principles of supply-chain management (SCM) has received increased attention
from agribusiness researchers (although none have made the link between SCM
and brand equity). Folkerts and Koehosrt (1998) found that modern customers
were more self-assured and were making new demands on agricultural
producers. This required radical change through the transformation of the

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Figure 2.
Distribution structure of
ZESPRI in New Zealand

traditional food supply chain from a product driven to a market driven chain.
Chain reversal required:
The redesign and repositioning of the complete food supply chain and of every company
(link) in this chain. In this respect, a food supply chain is defined as a set of interdependent
companies that work closely together to manage the flow of goods and services along the
value-added chain of agricultural and food products, in order to realize superior customer
value at the lowest possible costs (Folkerts and Koehosrt, 1998, p. 385).

ZESPRI's promotional material highlights the marketing work that it is doing

with the end consumer of kiwi fruit and the quality programs that it has
developed from orchard to pack house. However, there is little mention of the
distribution chain. Despite earlier announcements about the need to develop a
market driven strategy (see ``The ZESPRI story''), it appears that ZESPRI has
not yet undergone chain reversal. Figure 2 highlights the current distribution
set up for ZESPRI in New Zealand.
Figure 2 shows that ZESPRI relies on the trade (distributors) to manage its
kiwi fruit category in stores, and help market the product to retailers (reflected
also by a comment in Table II). If ZESPRI wants to develop strong brand
positioning within stores, via in-store promotions, separate shelf positioning, as
well as make consumers aware of the fruit (through cross promotional
advertising with the retailer), then they need to put more effort into marketing
directly to retailers. This may also help ZESPRI develop own-label products for
supermarkets, in-store marketing campaigns and gain better product
positioning within a store. Currently ZESPRI branded fruit are located next to
other non-branded kiwi fruit. This means that consumers get to compare the
prices of ZESPRI and non-ZESPRI fruit (the author has seen this occur in
Australian supermarkets). At this point it is very easy for consumers to
distinguish between different fruit on the basis of price (particularly given the
low levels of brand awareness, brand content, and poor packaging design). If
the aim is to establish a whole new fruit category, then ZESPRI labelled fruit

should be positioned apart from the non-labelled kiwi fruit. However, doing this
can only be achieved with the support of the retailer.
ZESPRI's stated aim is to increase returns to growers. However, to do so
may require a longer-term view that includes working with members of the
supply chain, rather than focusing solely on pull strategies (raising consumer
awareness). This will require ZESPRI to move away from the auction system of
sale. If the ZESPRI strategy increases kiwi fruit prices on open markets,
members of the distribution channel may not be able to pass on those increases
to other members of the chain, or in light of the findings, the end consumer (and
consumers may be unwilling to pay extra for brands). This may mean that in
the long term, kiwi fruit prices may fall (this problem faces many agricultural
producers, see Beverland, 2001), as demand falls, and retailers and distributors
reduce orders for the fruit. A better strategy may involve the use of SCM
principles. For example, rather than focusing on increasing prices to growers,
they could aim to increase the value of the brand, and allow growers to own
shares in the company (like the New Zealand Dairy Board). Part of this would
involve developing price and supply contracts with distributors and retailers
rather than selling at auction. This strategy has been used by Merino New
Zealand, the wine industry, and the New Zealand Game Industry Board to
increase brand equity and returns, as well as ensure a sustainable long-term
market positioning (Beverland, 2001). Kiwifruit New Zealand do intend to
develop contractual relationships with suppliers of fruit, however it is not clear
what the strategic intention of these contracts is. We would suggest that these
contracts be aimed at decreasing price and volume uncertainty for ZESPRI,
kiwi fruit distributors, and retailers.
All of this may be difficult to achieve within a compulsory single desk seller
structure. This structure has come under increasing strain in New Zealand, and
a number of reports have called for the removal of this monopoly protection
(Beverland, 2001). Currently Kiwifruit New Zealand and ZESPRI are controlled
by growers who are used to the commodity cycle of pricing and may not accept
the lower, albeit steadier returns, necessary for long-term survival (Beverland,
2001). Privatising this structure would enable ZESPRI's brand value to be
captured via shares held by growers. Privatising this structure may also be
necessary to develop a global brand. Given that ZESPRI is bound to develop
the New Zealand industry, they cannot source fruit from other countries,
licensing other countries to produce its four new varieties of fruit is different.
As a result they emphasise country of origin (COO) as a source of competitive
advantage. Whilst the origin of kiwi fruit may be seen by ZESPRI as important,
research shows that country of origin (COO) effects are at best neutral,
particularly when consumers have access to information about price, quality
and brand name (Agrawal and Kamakara, 1999). These authors found that
COO has no effect on prices, after considering the price differences between
brands due to differences in quality. ZESPRI International intends to develop
an all year round marketing campaign, but this may backfire if there is a lack of
year round supply (as such a campaign may create demand that the industry

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may not be able to supply. This is a problem confronting a number of

agricultural industries (Beverland, 2001)).
Developing global brands requires a constant level of year round supply
(Beverland, 2001). As noted in Table I, distributors would like an all year round
supply of the fruit, however the seasonal nature of fruit production means that
this is not possible if ZESPRI relies solely on New Zealand produced fruit. One
has to ask whether the real value of the fruit is derived from its ``New Zealand
ness'' or from the production and quality systems used by New Zealand
growers[3]. If it is the later, then franchising these systems to foreign growers
may help build the brand.
The producer board structure may also limit the ability of Kiwifruit New
Zealand to retain control of new varieties such as ``Gold''. Clark et al. (2000)
noted that HortResearch could license Northern Hemisphere producers to grow
the Hort16A (Gold) variety in order to enable a 12-month global supply of the
fruit. Clark et al. (2000) make it clear that HortResearch is moving to develop
constant streams of cash flow through royalties derived from their patents (due
to reduced levels of government funding) and are unhappy that many of their
industry partners are hesitant in trying to develop royalties from offshore.
Pressure on future research funding means that HortResearch may make this
move sooner rather than later. Finally, the producer board structure does not
allow for diversity in the marketplace. It is possible for producer boards to
source globally (where their growers allow) and the New Zealand Dairy Board
has done this effectively. Smaller producers who may want to develop niche
brands focused around their region of origin are denied the opportunity since
producer boards usually opt for a ``one size fits all'' strategy.
Conclusion
The development of fresh produce brands is a relatively new phenomenon in
world markets. The attempt by Kiwifruit New Zealand to position New
Zealand kiwi fruit as a high quality, distinctive fruit category is to be
applauded and encouraged. This research is exploratory, and raises more
issues than answers. Further research should be conducted on consumers'
reactions to branded fruit. Further case studies of successful brands should
also be developed. Research on the relationship between push and pull
marketing strategies, and SCM, in regards to strategic re-positioning should
also be examined. Based on this research, agribusiness brand strategies need to
include better targeting of consumers, strong links with distributors and
retailers, and where relevant, research laboratories. The focus may also need to
move away from increasing prices to growers in the short term (similar to
complaints about the narrow focus of big companies on quarterly earnings) to
developing long-term brand equity. This can only be done through stabilising
prices and moving away from the auction system. Producer boards may have
an important role in negotiating such contracts and in bringing growers and
buyers together, but may also limit the ability of producers to take the
necessary steps to develop a global brand.

Notes
1. The brand is generally marketed using promotional type activities such as sponsorship,
news stories, and in-store advertising (the small product stickers on the fruit). No targeted
advertising or mass marketing is carried out.
2. In export markets such as Australia, ZESPRI is clearly identifiable by its packaging.
ZESPRI is packaged into convenient six packs, which includes an eating tool (a plastic tool
that cuts the fruit and allows you to scoop it out), the design of which was based on
consumer research that highlighted that kiwi fruit were generally cut open and scooped
out. Product related information, as well as offering the opportunity to run competitions or
offer endorsements are also included in these packs.
3. The need to develop global brands is apparent even in an industry such as wine where the
region of origin can lead to important product differences. This has resulted in a number of
large producers such as Robert Mondavi or BRL Hardy placing greater emphasis on global
brands as opposed to region of origin (Beverland, 2001).
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