MEXICO’S CONSUMER PROFILE

.ITESM – Campus Guadalajara

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

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).

% Population % Buying Power

65.2%

22.4%

1.5%

10.9%

19.6%

28.0%

33.8%

18.7%

B

C

D/E

A

MIN MAX

A/B $85,000 +

C + $35,000 $84,999

C $11,600 $34,999

D + $6,800 $11,599

D $2,700 $6,799

E $2,699 -

Social Classes

Regional Differences

CLASS % ofpopulatio

n

A/B/C 25.7%

D/E 74.3%

CLASS % of population

A/B/C 32.8%

D/E 67.2%

CLASS % of population

A/B/C 34.3%

D/E 65.7%

CLASS % of population

A/B/C 8.2%

D/E 91.8%

Segmenting the Mexican Consumer

• Home Profile

• Age Groups

Home TypesConsciousHome

27% of total spending

Demographics:•Tends to be formed by medium-high social class.•2-4 members•With kids

Attitude:•Rational thinking applied to family well being and personal growth.•Seeks life quality

Media Exposure:•Minimum exposure to tadio and tv.•Reads books•Goes to the movies and theater.•Romantic music

Home Types

SacrificedHome

23% of total spending

Demographics:•Tends to be formed by los social class.•Runned by a house wife older than 45 with low or none education level.•With several kids.•Blue collar jobs.

Attitude:•Family is the rulling center.•No interest in personal growth.•Live day by day.

Media Exposure:•High exposure to tadio and tv (novelas).•Listens to the Radio.•Salsa and norteña music

Home Types

Mature TraditionalHome

10% of total spending

Demographics:•Tends to be formed by medium-low social class.•Runned by a house wife older than 45 with low or none education level.•With several grown kids/w family.

Attitude:•Family is the rulling center.•No interest in personal growth.•Live day by day.

Media Exposure:•High exposure to tadio and tv (novelas).•Listens to the Radio.•Banda music.

Home Types

FashionHome

5% of total spending

Demographics:•Tends to be formed by medium-High social class.•Runned by a young house wife or high education level.•With one or no kids.

Attitude:•Individualistic.•Interest in personal growth.•High social life.•Seeks life quality.

Media Exposure:•Shows interest in advertising.•Medium consuption of tv and radio.(cable)•Reads books and magazines.

Home Types

Pragmatic every dayHome

30% of total spending

Demographics:•Tends to be formed by low social class.•Runned by an older house wife with low or none education level.•With several kids.•Blue collar.

Attitude:•Main concern is the family.•No interest in personal growth.•Active social life.

Media Exposure:•High consuption of tv, telenovelas and talk shows.•No interest in reading.•Salsa music.

Home Types

Mature successfulHome

5% of total spending

Demographics:•Tends to be formed by High social class.•Retired.•Empty nesters.

Attitude:•Individualistic.•High interest in leisure.•High social life.•Main concern life quality.

Media Exposure:•Low exposure to tv.•Reads books.

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

Teens

• Segmenting Teens• De la Riva

• 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.

SOCIOECONOMIC VISION

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.

• 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.

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.

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

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).

PRODUCT MARKETING AND ADVERTISING

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

• 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.

PRODUCT MARKETING AND ADVERTISING

CULTURAL FRAMEWORK

ASPECT MEXICOFAMILY •Family is the top priority.

•Children are celebrated and sheltered.•Wife fulfills domestic role.•Mobility is limited.

RELIGION •Long Roman Catholic tradition.•Fatalistic outlook “As God’s will”.

EDUCATION •Memorization.•Emphasis on theoretical.•Rigid, broad curriculum.

NATIONALISM •Very nationalistic, shown trough humor.•Proud of long history and traditions.

CULTURAL FRAMEWORK

ASPECT MEXICOPERSONAL SENSITIVITY • Difficulty separating work and

personal relationships.• Sensitive to differences of

opinion.• Fears loss of face, especially

publicly.

PERSONAL APPEARENCE • Dress and grooming are status symbols, the more the better.

STATUS • Title and position more important than money in eyes of society, because of spanish heritage and “narco culture”.

ETHICS • Truth is tempered by need for diplomacy.

• Truth is a relative concept.

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.)

• 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.

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.

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.

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.

MEXICAN CONSUMER’S BEHAVIOR

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.

Price Perception Factors

AssortmentArchitecture

ReferencePrice

Store’sAmbiance

Promotions

Communication

Young Market

Kids

Palacio de Hierro

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.

QUESTIONS