any lessons on market penetration

Hi Elizabeth,

> I recently found a manufacturer/supplier of
> exotic butters and oils. These products are
> mainly used by companies in the cosmetics,
> soapmaking, aromatherapy industries. The
> company is local (Canadian). Some of their
> biggest clients are in the US, Europe and
> Asia. They capture a VERY small segment of
> the Canadian market.

> This is where the story becomes mind
> boggling. I was speaking with one of the
> partners, who has an engineering background.
> She was telling me that many Canadians
> actually buy her product from those same
> suppliers in the US that she sells to. My
> background is in business systems analysis
> for the life insurance industry so I know
> nothing about the retail and manufacturing
> sector. But I'm sure that I'll be learning a
> lot real fast.

Hmmm.... It does sound strange. Do the US companies put their own brand on the products? Maybe some Canadians assume a US-sourced product will be better quality than a Canadian product?

Or perhaps the US companies in this case simply have stronger (and better known) brands in that industry?

It's hard to know without a few more details, but there are a few possible guesses as to what might be happening.... I could be completely wrong too though....

> This case is in no way an isolated one. I
> also recently met a colleague who imports
> essential oils from Egypt and pretty well
> told me a simiilar story. Her biggest client
> base is in the US. She has the hardest time
> cracking the Cdn. market.

There are about 10 times as many Americans as there are Canadians, so the US market is clearly the bigger market. Maybe that's partly why her US client base is bigger than her Canadian one? I don't really know - just some more guesses as to what might be going on....

Another factor could be culture. US culture and Canadian culture are not identical, so there might be some differences in demand for different things due to this.... The economy might also be another factor too.

Anyhow, I don't know if I helped but at least there are a few possible guesses....

- Dien Rice