13 May 2010

Marketing costs higher than research for NZ firms

9:27 pm on 13 May 2010

An industry group has welcomed the Government's boost to research and development funds, but says the real challenge facing New Zealand manufacturers is the cost of selling their products overseas.

The Government is pumping $224 million of new money into science and research over the next four years.

The Medical Technology Association of New Zealand says for every $1 spent on research, a further $6 is needed to market the product internationally.

The association's chief executive Faye Sumner says the Government's focus should be on marketing costs.

Fisher & Paykel Healthcare, the association's largest member, agrees the focus should change.

Chief executive Michael Daniell says the cost of international marketing a medical device far exceeds the cost of development.

His company spends about 6% to 7% of revenue on research and development and more than 30% on selling and marketing.

However Mr Daniell concedes research and development is the riskier activity, with less certainty, and welcomes the Government support.

He says Fisher & Paykel Healthcare would put any money saved from a cut in the corporate tax rate towards research and marketing.