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 Business News | August 2007 
Are Canadian Companies Really Taking Advantage of the Huge Potential of the Mexican Market?
 Mark Borkowski - Canada Free Press
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 |  | According to Ruiz, it's easier and cheaper dealing with Mexico than doing business with such current hot markets as China, India and other emerging markets. |  | |
I had the pleasure of meeting Mr. Ramon Ruiz at an Opportunities Ontario Seminar, sponsored by the Ontario Government. Ramon is a professional sales Coach and consultant now working in Canada In our discussion, he stressed that for many Canadian businesses, it's time to re-think their approach to Mexico.
Increasingly, Canadian companies are thinking about how they're going to take advantage of the huge potential that represents the Mexican market. They're thinking they know the best ways of going there and selling a lot of their products and services in several possible ways: direct exports, joint venturing with a Mexican partner, opening an office themselves and hiring and training people.
The potential for Canadian businesses is huge and this potential is helped greatly by the fact that many of the products and services that Canadians offers are those that Mexicans already are seeking and buying.
But the advantage for doing so is right now, not at some far off future time when the usual very high Canadian trade with the United States runs into "trouble" with sectoral disputes (for example, softwood), U.S. economic downturns and legislative obstacles.
According to Ruiz, in fact, it's easier and cheaper dealing with Mexico than doing business with such current hot markets as China, India and other emerging markets.
A market with a lot potential
What does Mexico offer to Canadian businesses?
First, Mexico and Canada are members of the same free trade agreement as they are with the United States. This offers a sense of security and familiarity.
Second, Mexico has a growing middle-class economy, with over 100 million population, all eager to take advantage of the first class goods and services that Canadians can offer.
Third, the currency conversion rate is favourable for Canadian businesses, a factor that ads a built-in extra profit to the bottom line.
A fourth but often overlooked factor is that more of 75% of the exports of both countries go to the U.S. and as mentioned above, if the U.S. runs into trading problems that adversely affects both Canada's and Mexico's ability to continue to sell their exports at the same 75% rate, then the obvious solution is therefore a more increasingly direct trade with each other. This need for both countries to diversify their trade relationships can serve to not only provide a buffer but also allow both countries to take advantage of each other's trading strengths.
Critical points to remember
Acknowledging that the Mexican market offers immense opportunities, it is important to keep in mind that selling to this market does not necessarily follow the same rules of trade as Canadians do with the United States.
Ruiz stresses that Canadians need to understand how Mexicans buy. If they understand this, they are going to be more successful more often.
Maybe Canadian companies have acquired important contacts; conducted meetings together and even negotiated some business.
But, just as they get to know more about Mexicans, Canadian companies will need to know such as how Mexicans buy or how they can manage the salespeople they hire in Mexico.
A "Mexican Sales Process"?
To fully understand the so-called "Mexican Sales Process", Canadian businesses must have a deeper understanding of the sometimes-complicated cultural differences.
At this moment, many Canadian businesses are missing out on millions of dollars in potential sales simply because they did not appreciate nor understand the way Mexicans like to be approached in the marketplace.
Moreover, the simple idea of recruiting local salespeople is not so simple. Recent experience has rudely told Canadian companies that "Canadian selling techniques" are often insufficient and counter-productive.
Even the simple process of setting up the sales force can be daunting: Let's say, for example, that a Canadian company wants to hire salespeople because they want to sell a particular product. OK, who's going to hire them? Who is going to conduct all the recruitment process? Who is going to conduct training? Who is going to conduct the day-to-day supervision? And so many other questions.
Thus, it is becoming increasingly critical for interested Canadians to recruit a skilled and experienced Mexican consultant to be both the guide and mentor, just as it is also important to engage carefully selected international trade lawyers and accountants.
Ramon Ruiz is a professional Sales Coach working with companies interested in Mexico. He can be contacted at ramon.ruizg@gmail.com
Mark Borkowski is president of Toronto based Mercantile Mergers & Acquisitions Corporation. Mercantile is mid market M&A brokerage firm. He can be contacted at mark@mercantilema.com |
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