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Manufacturers wave maple leaf to marketing advantage

Trail Blazer Products Ltd. vice-president Shawn Levangie holds a Trail Blazer shovel manufactured at the company's Dartmouth, N.S. plant.

BEN CUMMING/COURTESY OF TRAIL BLAZER

The Cambridge Towel Corp. has proudly sewn a small maple leaf logo on its label for the past 30 years.

The bathroom accessories company employs 200 people at its Cambridge, Ont.-based plant, which produces about 33 million towels every year. Its entire towel operation – comprising about 85 per cent of its total business – is in Canada.

President and chief operating officer Hugh Thompson said that when Cambridge's hotel and retailer customers in North and South America see the maple leaf, they know they can expect well-made towels to be delivered on time. It helps customers avoid the risks of shipping delays caused by issues like political upheaval or poor weather that occur in countries halfway around the world.

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"We're in very close proximity to the market we serve here in Canada. Goods do not have to travel 5,000 miles on a steamer to get here and we don't have the uncertainty and the risk that exists even today with goods that are purchased offshore," he said.

But as reliable as Canadian-made goods are perceived to be globally, sticking to homegrown manufacturing comes at a price.

Canadian companies must factor in higher labour, environmental and production costs. In a competitive global market, manufacturers face the question of whether to move offshore to factories in places like Asia, where costs can be significantly cheaper, or keep their manufacturing operations in Canada.

Some savvy companies have chosen to stick to a "made in Canada" approach, and are finding it can be a successful marketing strategy.

Just look at trendy parka manufacturer Canada Goose Inc., whose high-end jackets are coveted by Hollywood stars. Ernst & Young specifically cited "made in Canada" branding as one of the reasons it last year named company chief executive officer Dani Reiss entrepreneur of the year.

The made-in-Canada label works as a marketing tool because it shows good will toward Canadian workers and makes products stand out to more discerning customers, said Niraj Dawar, a professor of marketing communications at the Richard Ivey School of Business at the University of Western Ontario.

"It's a way of appealing to people who are more willing to buy, more willing to pay more for locally made products," Prof. Dawar said.

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The made-in-Canada label is valued abroad because it ensures the products have passed stiffer quality controls – avoiding problems that have in the past come out of places like China, such as lead paint in toys or pet food laced with melamine, Prof. Dawar said.

A shopper simulation study conducted by Agriculture and Agri-Food Canada in March, 2010, found support for the idea that the maple leaf could boost sales when it came to food packaging.

In the simulation, a stylized maple leaf was pictured on 17 per cent of the labels of products, but those items made up 29 per cent of all goods chosen by respondents, according to the survey's findings.

Companies that label their products with a maple leaf have used it to help snag clients.

For the past 16 years, made in Canada has been proudly labelled on the packaging of goods manufactured by Trail Blazer Products Ltd. The company, with 29 employees, manufactures specialty garden tools like saws, tree loppers and pruners at its plant in Dartmouth, N.S.

Vice-president Shawn Levangie and his father, Curtis, who founded Trail Blazer and designs the tools, made the deliberate choice to keep manufacturing operations in Canada because they wanted to employ Canadians, Mr. Levangie said.

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But the owners also get the added benefit of being able to check the quality of goods being produced firsthand. They couldn't do that if they had outsourced their plant to somewhere in Asia, Mr. Levangie said.

While moving offshore could have lowered the company's production costs, Mr. Levangie said he has no regrets about keeping manufacturing in Canada, even though Trail Blazer has competitors who have lower manufacturing costs in China and can provide lower price points to consumers.

By promoting Trail Blazer as a higher-quality, niche brand that prints "made in Canada" on its packaging, the company now sells its products in 40 countries.

Mr. Levangie said there's more than marketing behind his choice to keep manufacturing Canadian.

Going offshore, "I wouldn't get the pride of walking in and seeing people making [tools]myself right there and employing people in Nova Scotia. Sometimes that pride is worth a lot more to me than increasing volume," Mr. Levangie said.

Jeff Brownlee, a spokesman for Canadian Manufacturers & Exporters said Canuck businesses are also known abroad for being friendly to work with and paying bills promptly – and it's time they stopped being so shy about it.

He said companies with local operations also save on shipping costs, avoid potentially costly language and cultural differences, and skip different laws and financial systems that may be hard to navigate.

"Being typically Canadian, we don't want to stand up and beat our chests and say that we have some of the best products in the world," he said, adding that Canadian goods are well sought after abroad.

But for some industries, a maple leaf emblazoned on the packaging isn't sexy enough.

Isabelle Remy, founder of marketing and advertising agency Buy Canadian First , said that, in her experience, cosmetic companies often play down their status.

"If they're selling to Europe or whatever, Canada is not known for our cosmetic industry – although we have a huge one. But the brand is not there," she said from Montreal.

And south of the border, it's hard for Canadians to compete with a strong "buy American" push, she said.

"A lot of [companies]have had to adjust their pitch and call themselves 'made in North America,'" she said.

Ms. Remy added, however, that there appears to be increased interest in Canadian-made products, and that she is being asked to appear on more TV lifestyle segments to promote Canuck goods.

Her firm took advantage by launching its biggest ever advertising campaign in the weeks leading up to Christmas. Large Canadian-made LED billboards near Toronto's Eaton Centre promoted Canadian-made items – everything from shoes to food to furniture to music stars like Justin Bieber.

Increasing awareness of locally made goods is a good reason for Canadian small businesses to take a closer look at their books, Mr. Brownlee said. As wages rise in Asia, the cost of doing business in that region could soon be comparable to homegrown ones.

And he said there are lots of ways to incorporate Canadian-made components into the production process besides the assembly line.

"It's also marketing, engineering, design, sales," Mr. Brownlee said..

"Even though some elements of the process might be done offshore, there are other elements you can do here."

Special to The Globe and Mail

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