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7 / 20

GAIN Report #CA9142

Page 6 of 19

a) Entry Strategy This segment and it’s 4 key retailers dominate retail food distribution in western Canada. As such entry into this segment requires a very well planned entry which should include the following:

  • 1.

    A solid marketing plan for the Canadian market.

  • 2.

    A well planned and financed communications plan with a clear focus on awareness building and trial and repeat purchase generation.

  • 3.

    Of particular interest are new and unique product offerings that are not currently in the Canadian market and that tie into the current consumer trends.

  • 4.

    A proven track record in other markets. The US market is seen by retailers as a unique source of new products and test market proving ground.

  • 5.

    Of key importance in this dominant segment is the exporter’s willingness to ‘invest’ in the brand with retailer listing and slotting fees. These fees vary depending on the category, yet an investment of $US 70,000 per stock keeping unit would not be uncommon to secure 70% to 80% All commodity distribution across western Canada.

  • 6.

    In addition to a consumer marketing program funding and the initial investment in listing fees, a budget must be developed for ongoing retail support - including cooperative advertising funds, store level funds, and supplemental trade promotion funds.

  • 7.

    A successful western Canadian launch into this channel will require sales expertise - both at key account and field/store level. This sales expertise can take the form of a traditional sales force, a merchandising sales group, or a broker sales arrangement. Key account expertise will be required to secure initial appointments, negotiate listing and slotting fees, lead the product/brand through it’s initial distribution challenges, and finally to manage the long term process of the product/brand sales management.

    • b)

      Market Structure

Distribution Channel Flow Diagram

Ship product from Manufacturing Facility (U.S.)

Clear Customs

Broker/Sales force

Set-up Western Canadian Warehouse/Distribution Centre

T h e f l

ow o

f

warehouse/

distribution F . O . B . C a n a d i a n w center a r e h o u s e C a n a d i a n R e t a i l e r R e c e i v e s G o o d s f r o m S h i p p i n g D e s t i n a t i o n s : g o o d s i s s t r a i g h t f o r w a r d . S h i p f r o m U . S . d e s t i n a t i o n t o a ( s u g g e s t i n C a l g a r y a n d V a n c o u v e r ) , then

ship

F.O.B.

Canadian

to

Canadian

customer’s warehouse. This- isiwhen, thencustomeruwouldntake ownership of the goods. Assuming - S a s k a t o o n , S a s k a t c h e w a n - th E d m o n t o n , A l b e r t a e p r o d u c t i s s h e l f s t a b l e a n d o e s n o t r e q u r e i r e c t s t o r e d e l i v e r y ( e . g . , d a i r y , b r e a d ) . - Calgary, Alberta Some retailers are interested-inabcackeh,auliif available.

UNCLASSIFIED

Foreign Agricultural Service/USDA

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