MEXICO’S CONSUMER PROFILE

1. MEXICO’S CONSUMER PROFILE . ITESM – Campus Guadalajara

2. PEOPLE • Most populous Spanish-speaking country in the world. • Second most populous country in Latin America, after Brazil. • About 70% of the people live in urban areas. • Many of them emigrate from rural areas that lack job opportunities to the industrialized urban centers, such as: • Mexico City • Guadalajara • Monterrey • Puebla • Tijuana • Ciudad Juárez

3. People • 20% of mexican nationals live in the US • Representing a 58.5% of all US hispanics • More than 12% of the US populiation are Americans of Mexican origin (20 million people).

4. 18.7% 33.8% 28.0% 19.6% Social Classes % Population % Buying Power A 1.5% B 10.9% C 22.4% 65.2% D/E

5. Regional Differences Nuevo Leon Sonora Oaxaca D.F.

6. Segmenting the Mexican Consumer • Home Profile • Age Groups

7. Home Types

8. Home Types

9. Home Types

10. Home Types

11. Home Types

12. Home Types

13. A Youthful Population • With more than 50% of its population under the age of 24, there is an incredibly youthful market that will swell the job and housing markets in the comming years. • 54% in 2000 compared to 37% in the US • Just 30% of the population is age 35 or older • 46% in the US • Only a very small 5% is 65 or older • 13% in the US

14. Teens • Segmenting Teens • De la Riva

15. SOCIOECONOMIC VISION • As seen, Mexico is a young country, resulting in an important opportunity to launch innovative products that are out of the ordinary. • This situation is reinforced by the reach of the advertising media to this segment.

16. PRODUCT MARKETING AND ADVERTISING • Mexico has a wide range of broadcast and print media. • There are over 100 full-service advertising agencies, including branches of well – known U.S. companies. • Mexican advertising rates are comparable with most large international cities.

17. PRODUCT MARKETING AND ADVERTISING • Six television networks provide national coverage, with close to 100 stations providing local or regional broadcast coverage. • The largest national television networks are Televisa and Television Azteca. • Some U.S. channels, including some with advertising in Spanish, are received through cable television. • Approximately 11 percent of the homes with at least one television set subscribe to cable television.

18. PRODUCT MARKETING AND ADVERTISING • Radio has the widest coverage throughout the country. • Approximately 1,300 radio stations (500 FM and 824 AM) broadcast in Mexico. • Most of the radio stations broadcast 24 hours a day.

19. PRODUCT MARKETING AND ADVERTISING • Over 450 newspapers are published and distributed (both locally and nationally) in Mexico. • The major Spanish – language newspapers include • El Economista - El Financiero • Excélsior - El Universal • Reforma • In addition there are English – language newspapers: • Mexico City Times - USA Today • New York Times

20. PRODUCT MARKETING AND ADVERTISING • Over 300 magazines are published in Mexico, many of which are specialized business and industry – specific magazines. • Important business publications include: • Industria - Expansión • Business Mexico - Al Detalle • “Medios Publicitarios Mexicanos, S.A. De C.V.” publishes a directory of advertising media in Mexico, including newspapers, magazines and radio and television stations (available by subscription).

21. PRODUCT MARKETING AND ADVERTISING • There is one MKTG specialized magazine: • Merca2.0 • And Expasión has a very MKTG oriented focus, even though is a Business magazine

22. PRODUCT MARKETING AND ADVERTISING • Billboard advertising is also popular in Mexico. • Approximately 60 companies offer various types of billboard advertising, from plain paper to electronically controlled billboards. • The direct marketing industry in Mexico is growing. • Telemarketing centers have been developed that can also handle toll – free telephone services and improved overnight package delivery.

23. CULTURAL FRAMEWORK

24. CULTURAL FRAMEWORK

25. MEXICAN CONSUMER’S BEHAVIOR • Prefer well – known or familiar brands • Buy brands perceived to be more prestigious. • Are fashion – conscious tending to obsessed. • Historically prefer to shop at smaller personal stores, but lately are moving towards the mall. • Tend not to be impulse buyers (i.e., are deliberate.)

26. MEXICAN CONSUMER’S BEHAVIOR • Likely to buy what their parents bought • Prefer fresh to frozen or prepared items • Tend to be negative about marketing practices and government intervention in business. • Mexican consumer gives more importance to appearence than functionality and also, sometimes, quality.

27. MEXICAN CONSUMER’S BEHAVIOR • Mexicans often enjoy comparing prices. • Don’t have preference for generic brands.. • At least 49% of sales value come from supermarkets and the rest (51%) from traditional stores.

28. MEXICAN CONSUMER’S BEHAVIOR • Small stores are still extremely important in Mexico, the “abarrote” sindrome. • Wal – Mart is the transnational with more presence in Mexico. • In general, Mexicans tend to be loyal to brands.

29. MEXICAN CONSUMER’S BEHAVIOR • Price factor is not always decesive in what Mexicans buy. Specially with meat, dairy products, fruits and vegetables. • In the case of cleaning, cosmetic and toilettries price factor is important.

30. 5 New Types of Consumers • Sales Hunters • High Income Sales Hunters • Frustrated Buyers with Low Income • Variety seekers with a limited budget • Consumers that value time and quality.

31. Price Perception Factors Reference Price Assortment Architecture Store’s Ambiance MENOS IMPORTANTE -------------------------- MAS IMPORTANTE Promotions Communication

32. Young Market

33. Kids

34. Palacio de Hierro

35. COMMERCIALIZATION CHANNELS • The participation of traditional stores still remains as important (there are more than 404,000) • Also, there’s an increasing importance of supermarkets. • Inspite of the numeric difference, supermarkets have a huge impact in sales, talking about product volume and diversity of products.

36. QUESTIONS