Online Global Marketing Profile 2010 Forecast – Canada

Market Opportunity

With a population of 33,487,208, Canada is a country that has developed in parallel with the United States, both economically and technologically.

In the past year, tight global credit conditions have restrained many businesses and investments in Canada despite the high number of stable Canadian banks. Although this is the case, the latest Monetary Policy Report from the Bank of Canada states that the economy is projected to recover in 2010. The real GDP is projected to grow by 2.5% in 2010 and 4.7% in 2011.

In the last four years, Canadian’s real disposable income grew twice as much as that of Americans’. Since 2005, the per capital disposable income has risen by 2,600 Canadian Dollars ($2,399.70), while that of the U.S. has risen by only $1,300. It is likely that this trend will continue after the recession.

As the U.S. Dollar depreciates in value against the Canadian dollar, there are more incentives for Canada to buy from U.S. exporters. Thus, Canada provides excellent opportunities for U.S. exporters and U.S. companies who seek to expand globally.

Best Industry Segment

The United States is Canada’s main import partner. According to the CIA World Fact Book, 54.1% of Canada’s imports come from the United States. The best industry segments for U.S. exporters include machinery and equipment, chemicals, motor vehicles and parts, electricity, crude oil, and durable consumer goods.

Tariff and Regulation Landscape

The relationship between Canada and the U.S. is one of the closest and most extensive in the world. According to the U.S. Commercial Service, the volume of bilateral trade is staggering and about 300,000 people cross the shared border every day.

In 1988, Canada and the United States established and signed the Canada-United States Free Trade Agreement. The goal of the agreement was to remove several agricultural trade restrictions over ten-year period. Provisions of this FTA were incorporated into the North American Free Trade Agreement (NAFTA) in 1994. NAFTA removed most barriers to trade among Canada, the United States, and Mexico. As a result, trade has increased tremendously after the implementation of the agreement. According to the Office of the United States Trade representative, in 2008, the NAFTA countries were the two top purchasers of U.S. exports; Canada imported $261.2 billion from the United States.

Online Market Opportunity

According to Internet World Stats, there are 28,000,000 Internet users in Canada. This number represents 84.8% of the population thus making Canada a country with one of the highest online penetration rates in the world.

Most of the purchases made online by Canadian consumers are from retailers from the United States. eMarketer estimates that by 2011, Canada’s online consumer spending will reach 37.2 billion Canadian Dollars (approximately $30.2 billion).

Online Language Preferences

In Canada, there are two official languages. About 59.3% speak English and 23.2% speak French. The other 17.5% comprise of other non-official languages.

Companies from the United States with English websites already receive many online purchases from Canadian consumers. However, to further expand their sales in Canada, it is recommended to also include a French version of their website.

Search Engine Profile

According to Ipsos Reid, 80% online users in Canada agree that they are receiving the best results from their primary search engine. As indicated by Hitwise, the most used search engine in Canada is the ever-popular Google. Google takes 80.17% of the online search engine market share. Following Google are MSN with only 8.84%, and Yahoo! with 7.34%. Other search engines comprise of the other 3.65%.


With a large English speaking population, a high online penetration rate, and close relationship with the United States, Canada is a very promising market for U.S. companies looking to expand online. For these reasons, Global eMarketer (GeM) gives Canada a Tier II ranking for global online marketing opportunity.

Strategies For Reaching Global Markets – Contract Manufacturing and Joint Ventures

With many companies scrambling today to become more competitive on a global level and meet consumer demands for lower prices, many of the methods for reaching global markets and joint ventures with foreign firms are looking more and more attractive. One of the options available to product manufacturers is contract manufacturing with foreign producers. Much like licensing, contract manufacturing involves a foreign company that produces goods for another company. However, where licensing involves the manufacturer using the company’s trademark or brand name under license and the sale of consulting services on the part of the licensor, contract manufacturing involves a company that already produces a private-label product and another company attaching their brand name or trademark.

In contract manufacturing, the manufacturer has no rights to the trademark. Contract manufacturing is often a form of offshore outsourcing where a company produces a product for a specific brand. Examples of this can be seen in a number of large US corporations. Singapore contract manufacturers often produce cell phones and other electronics for a number of US brands, and China is a leading contract manufacturer for US computers and laptops like Dell.

The benefits of contract manufacturing for startup companies or smaller businesses can be great, as contract manufacturing often allows these companies to experiment with different product variations in different markets without having hefty production costs associated with a local manufacturing facility. In addition, for established companies, production of successful products can easily be expanded to meet new demands without incurring additional costs and overhead.

Aside from contract manufacturing, forming international joint ventures and strategic alliances are also great ways to expand into the global market. However, these type of joint ventures have traditionally been used more by larger corporations. A joint venture is a type of arrangement where two companies join together for a particular project. Examples of this are often seen in the motor industry where American car companies enter into a joint venture with Asian car manufacturers in order to produce vehicles for all markets. The two companies, which are often from two separate countries, share technology and risks associated with the project, along with marketing and management skills.

The advantage of these kinds of ventures is that many companies who would not otherwise be able to enter some markets are able to work together with local companies that have access to those markets. A strategic alliance is much of the same thing, tying together two or more companies with a common goal. However, in a strategic alliance, companies typically do not share costs, management, or profits. While these kinds of arrangements can be beneficial at reaching other markets, the disadvantages are much like in a licensing agreement, where one company can take the other companies technology and expertise, leave the arrangement, and use the ideas to promote their own company or profits.

Global Marketing Research Possibilities


Business of today can be done whenever and wherever. Thinking global is something that is quite feasible already. Reaching out to the opposite hemisphere is now just clicks away with the right internet connection.

The abundance of online messaging tools such as Yahoo Messenger (1 of the 1st of its kind) up to the rise of Skype, and now, Facebook. Globalization has been in the table since the late 90’s though it is just but now that the whole concept is starting to materialize.

So it is safe to say that technology was already there, it is the idea and the means where more people will be able to use that technology and have a market for it. Internet connectivity is the key to globalization, the cheaper and faster internet connectivity becomes available to people, the faster and better reach will internet technologies would have, a clearer sense of globalization is achieved.

Global Marketing Research

Marketing research as it was with any type of research would be mainly limited to one’s locality, one’s reach. If you want to know about something, you would usually simply can only reach out to where it is feasible and easily accessible to your means like inviting different people to attend a brainstorming session or focus groups. Handing out surveys in your local school, or mall that can easily get you a good demographic of your area.

These endeavors are definitely not obsolete and for all you know can provide such raw data that companies or businesses can really utilize. But right now, with the technology at hand, business can now venture into the global market and with that said, for them to be able to know how to do these businesses, what works, what demographics a country, or a region may have, what they need is reach and that is what technology provides.

Technology nowadays offer virtual collaboration experiences, believe it or not, even the hiring process can be done via Virtual IDIs (In-depth Interviews). Research and brainstorming sessions can now be done online hence coining the term Online Focus Groups.

Marketing research can now be very versatile and most of all cheap. It is still better to rent facilities from marketing research services companies than have people travel overseas and do the research and travel back. With the online facilities and capabilities of marketing research services companies, your respondents can come from different parts of the world rolled into 1 virtual focus group session.

Technology today is the reason why businesses have a more global reach and it is just a matter of how people would want to elevate their game in the business arena. It will just be senseless not to utilize such advantages in the modern internet age.

Globalization – A Boon Or a Curse to Mankind?

What is globalization? Different people from different aspects of life have different concepts about globalization. Some view it as the movement of people, language, ideas, and products around the world (IMF, 2002). Others see it as the dominance of multinational corporations and the destruction of cultural identities. Some of these people feel globalization is a beneficial process (IMF, 2002), while others look at it with suspension and hate. Whatever their thoughts maybe, globalization is nothing new, be it the use of the ‘silk route’ to trade products (Jing, 2004) or the spread of paper world wide; it has been here for centuries.

The only thing that has changed is the speed with which it is taking place. The results and effects of modern globalization have become more visible than ever and like any other thing, globalization too has come in a package of good and bad things. The earth is no longer what it used to be. The direct and indirect effects of globalization have had far-reaching results with very few things left untouched. However, in a broad sense, the most noticeable and widely affected forms of globalization have been the technological revolution, the modification of food and food habits and urbanization. In other words, the world is globalizing and the outcome is a much faster, fatter and a more fashionable earth.

Technological Revolution
One of the largest off-springs of globalization has been the technological revolution. Globalization of technology maybe regarded as the biggest boon or the biggest threat to mankind depending on how the world uses it in the coming years. Even though the matter is of a delicate nature, the wide spread use of technology has put us in a spot where very few would want to go back. Computers, television, cars, electricity, fridges, bottle openers, telephones, pilot pens, cash card, etc have added so much luxury and value to a person’s life. The advent of internet has brought people closer to each other. Information now travels at the speed of a click of a button and along with it millions of ideas and innovations. Modern technology has had hugely dramatic and drastic impacts on all fields.

As one researcher from North-east regional forum rightly points out the impact of technology on education by stating, “Technology is not going to fix the problems associated with schooling, but, at the same time, the problems that plague our educational system are not going to be remedied without the presence of technology” (USDE, 2003).
Not surprisingly though, the innovation of new technologies has resulted in substitution and dematerialization. For instance the demand of copper wires in telecommunication in the 90’s had dropped to half of what it was in 1979 as it fell prey to other advanced technologies (Black, 1992). Technology, it is said makes the world a smaller and better place. But this is only half the truth. Technology has also made the world a feared place. Fear of nuclear disasters, employees being replaced by machines, increasing gap between rich and poor, addiction and dependence on machines, sedentary life styles, genetic food, etc are all negative effects of modern technology.

Altered Food and Food Habits
The earth is becoming fatter. Modern day food and food habits are causing severe health problems and obesity. No doubt, the food has become more delicious and many more varieties of food are available in the market owing to globalization. But the fact remains that the food sold in the market maybe unhealthy. In today’s world, a lot of the food we eat are genetically modified or sprayed with pesticides. Kathleen McAfee, ‘Genetically Modified Morals’ (McAfee, 2003) seems to be unsurprised over the decline of U.S. genetically modified food aid by south-African countries. She argues that modified crops are designed for dealing with pest problems and not food production.
On the other hand, the world is witnessing a total globalization phenomenon known as ‘the McDonalization of Society’ according to socialist like George Ritzer.

Ritzer defines McDonaldization as a process in which the principles of fast food restaurants are coming to dominate society (Ritzer, reprinted, 1993:1). Today’s world has seen a growing domination of delicatessens and fast foods. People everywhere flock to food courts thinking they had able to save time and money. But fast foods are under attack for selling unhealthy food and inducing people to overeat for profit. Such intake of processed low nutrient food has led to wide spread epidemic of obesity and health related problems. If we continue this trend of McDonaldization, we could end up in grave danger by putting our own bodies at risk.

Globalization Leading to Urbanization
Global change has led to radical urbanization and the effects of urbanization have led to the process of unifying the world at an alarming pace, transporting fashion, music, products and cultural trends to all corners of the globe. For example, the ‘fashion gap’ between countries like USA and Asian countries is not very wide compared to a few years back. One can now buy the latest products, view the latest films or listen to the latest songs, be it in Nepal or in the United States. Lifestyles have changed but become almost the same everywhere, as designer and strategist David Gensler puts it “Everything is about information and speed. The trends are global. The consumption patterns are global” (Sharett, 2004).

But in all this, cultures are being lost to modernization, lifestyles are becoming monotonous and sedentary and social values are being torn apart by globalization. Backed by trends and power of influence, Western ideals are falsely established as universal, over-riding local traditions and cultures. Products and ideas are being misused without knowing their consequences. These consequences and effects of urbanization have raised several and serious questions about mankind’s futures.

While one can try to weigh the pros and cons of globalization, the whole issue of globalization is very complex. This makes it impossible to judge and categories globalization at least for the moment. Globalization has caused the world to change and some of these changes have been good while other have not. Globalization in itself is inevitable and people will always have different opinions on it because of its diversity. To underestimate it and not take the right actions to curb ‘unwanted globalization’ could be disastrous. One may therefore talk about globalization, not as a boon or a curse but as a necessity to mankind for all-round world development. Globalization, thus one may add, must be handled with care.

Global Markets Sunny Side Up

The key question for investors going forward is will the current financial turmoil work itself out like the savings and loan problem of the 1990s or will it spread to the real economy. Another issue is whether the U.S. grown financial problems will spread to international markets or will they lead to ETF investors increasing their exposure to overseas markets.

There is little doubt that real estate markets are weaker than expected. The backlogs of existing unsold houses rose to 16-year high and average prices in America’s ten main cities fell by 4.1% this year to June. JPMorgan expects average house prices to fall between 7.5% and 15% by the end of 2008.

There are several ways that real estate problems could hurt the real economy. The first is consumer sales. Across the world, household spending has been supported by both property and equity prices. If the US housing slump deepens and markets continue to be weak, consumption growth will likely slow. Then there is the spillover effect whereby homeowners having mortgage payment problems, start having credit card payment problems and so on down the line.

In addition, there is the negative effect of rising borrowing costs on companies’ capital spending and hiring. Global business spending has been supported by record cash flows, as well as by debt funded investment. While expenditures in these areas may slow gradually as companies adapt to the new environment, there is already some evidence that equipment spending is softening in the US.

Watch for signs that indicate what is happening to the real economy: jobs, spending and capital expenditures. But keep in mind that despite the steady drumbeat of negative stories on TV business channels, the record of the American and global economy in weathering challenges is actually quite extraordinary. Take a look at the “sunny side” before going to cash and hibernating for the winter.
Here is the big picture which you can find in the American Funds mountain chart. The S&P 500’s total return has exceeded the return on “risk-free” Treasury long-term bonds in all but four of the ten-year periods — the ones ending in 1974, 1977, 1978, and 2002.

Despite wars, inflation, recessions, gasoline shortages and housing crashes in various parts of the nation, the S&P 500, with dividends reinvested, has yielded an average ten-year return of 243% vs. 86% for the highest-grade bonds. Since 1959, there has only been one year, 1980, when consumer spending fell.
Here are some more reasons to be optimistic that the U.S. and global markets will again be resilient.
First, consumer spending will likely stay strong because the top 20% of income earners account for a higher percentage of total consumer spending than the lower 60%.

Second, share buybacks from a broad range of firms may help soften the blow of weaker share prices. Some of the companies with sizable pending buyback programs are P&G, Home Depot, Nestle, Wal-Mart, ConocoPhillips, UBS, Bank of America Johnson & Johnson, JP Morgan and Walt Disney.

Third, corporate earnings seem to be rather firm. According to data from Thomson Financial, earnings per share for S&P 500 companies in aggregate are expected to rise 8.1% in 2007 and 11.5% in 2008. For the MSCI World index companies, the number is 13.2% for 2007 and MSCI Asia is even stronger at just over 18%.

Fourth, corporate balance sheets in aggregate have improved. The net debt of S&P 500 companies has fallen 11% since 2001.

Fifth, there is now a wide expectation that the Federal Reserve will cut interest rates next month and central banks around the world have demonstrated their willingness to take actions to inject liquidity and calm markets.

Sixth, valuations in the U.S. and around the world do not seem overdone to me. The S&P 500 is trading at 16 times earnings and international markets, with the exception of Indonesia and India, appear undervalued. Ireland, Germany and the UK are trading at 11 times, the Netherlands at 10 times, Sweden and Singapore at 12 times and Mexico is trading at 13 times earnings.

Lastly, many global companies are increasing the proportion of their total sales to emerging market countries and economic growth in these fast-growing markets seems to be alive and kicking. The major themes driving this growth which has averaged well over 7% in annual terms over the past five years seem clear.

Economic market reforms, openness to foreign capital, better balance sheets and fiscal discipline leading to higher credit ratings and bulging FX reserves, urbanization leading to higher productivity, and the ability to catch up more rapidly due to breakthroughs in technology and communications have all helped emerging market countries catch up fast. The world is truly filling in leading to tens of millions moving from poverty to the middle class.

Indeed it appears that sophisticated global ETF investors are not backing away from international and emerging markets.

While the S&P 500 Index is up 11% this year, Chartwell ETF Advisor picks have done much better. Brazil (EWZ) is up 62%, South Korea (EWY) is up 36%, Germany, up 32, and Singapore (EWS) is up 35%.

Bottom line: Keep healthy cash positions for flexibility and use dips in markets to accumulate shares in high quality U.S. and global ETFs that have strong currencies and that have demonstrated fiscal discipline and a commitment to market reforms.