a tutorial by

Alicia Contreras

Introduction

Tequila, Corona beer, tortillas, beans, spicy food, and tacos are just some of the popular consumer products in Mexico. These are just some of the items that have brought Mexico onto the world market.  For the Mexican, however, these are just common place items that exist in the everyday consumer world. A Mexican consumer may not necessarily have to think to hard about purchasing these items - they are habitual products that are consumed everyday in their culture.

A brief definition about what consumer behavior is might help one to understand Mexican consumer behavior. Consumer behavior is “the study of individuals, groups, or organizations and the processes they use to select, secure, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer society” (Hawkins, Best, Coney 2001). The behavior of consumers in Mexico is unique to that of its North American counterparts. The Mexican population is comprised by a diverse group of people, even though they all reside in the same country. Every state in Mexico has its own little traditions, and consumer behavior varies to a degree from state to state, just as it does in the United States. In general, however, strong cultural ties and strong traditions are what unite Mexicans all across the country. This does not imply that all Mexicans consume the same products, but it does mean that how Mexicans view of a product and thought process behind purchasing is very similar. This consistency is one of the reasons why the Mexican consumer is becoming an increasingly attractive target market for many products.

Explanation of the Topic

Mexico has a population of 102,555,000 people with a real gross national disposable income of $444,585,400 (Wilke et. al 2002). The unemployment rate in Mexico reached a high in 1995 standing at 6.3%, which was felt throughout the consumer market. Since then, the unemployment rate has fallen to 2.5% and has stayed steady (Wilke et. al 2002). With unemployment staying below 3%, and a 4.6% growth in real gross national disposable income, people have begun to spend more money (Wilke et. al 2002). Annual consumer expenditures are estimated to be near $300 billion.

The North American Free Trade Agreement (NAFTA) and Mexico. NAFTA has had various effects on Mexico, some good and some bad. Companies are moving to Mexico in herds to reduce their manufacturing expenses, obtain inexpensive resources, and especially to take advantage of cheaper labor. In the beginning, NAFTA resulted in lower wages in Mexico, due to fewer jobs resulting from an overload of US and Canadian imports. This led to a devaluation of the peso, and consumers steered clear of purchasing anything. Their peso was worthless against the United States dollar, making it hard for people to buy imported products from the US (Hanson 2003).

Mexican immigration to the US has increased dramatically, increasng from 800,000 in 1970 to over 8,000,000 in 2000. However, things have slowly begun to change. Foreign direct investment in Mexico is booming at over $12 billion and jobs are becoming a littler easier to find (International 1998). Exports are now beginning to surpass imports, thereby helping to alleviate some of Mexico’s national debt.

Outdated Mexican Stereotypes. What does one think when one thinks of someone from Mexico? Poor people, illegal, drugs, tequila, or maybe even spicy foods – these are all things that often come to mind when people in the US thinks about Mexicans. In the past, much about what Americans have heard about Latin America has been negative. The news coverage of Mexico and other Latin American countries has often focused on drugs, corruption, crime, and political instability (Galceran 1995). Latin America often means either a poverty-riddled border with Mexico or the illegal immigrant in California. Today, Mexico is beginning to enjoy a dynamic consumer economy that is being restructured by new technologies, the media, and relaxed trade laws much as it is in the United States.

Mexican Consumers vs. American Consumers. Mexican consumers can be characterized as

There are other key differences as well.

The typical Mexican consumer does not have the purchasing power of the American consumer, so they tend to be more particular when they are looking for a certain product. Shopping around is something that a Mexican consumer does for many products. Mexicans shop daily or twice a day. On average, a typical consumer will make 11 or more shopping trips during the week (Anonymous 1995). This happens for various reasons, one of which is convenience. Many consumers will go to the Mercado or the street market to buy groceries. Freshness is important when buying: milk, bread, meat, chicken, fish, fruit, vegetables, and eggs. The consumers do not want those items to perish, so they frequent the market often, thus making so many shopping trips. Unlike their Mexican counterparts, American consumers go to large supermarkets once or twice a week. Fewer then one in seven Americans say that in the past year they had changed the grocery store where they shop most often (Anonymous 1995).

Driving to a central, larger shopping location is frequently important to American consumers. Mexican consumers, meanwhile, often prefer to shop around at the nearest Mercado. However, once the Mexican consumer finds something they like, they are likely stick to it. Americans tend to try more new things, but Mexicans generally “aren’t going to change brands unless they believe there’s a good reason to” (Turner 2001). This makes Mexican consumers an ideal group for product marketers. Higher degrees of brand loyalty generally create more profitable market segments for marketers, since consumers are less likely to change from one brand to another for a few cents.

The Emerging Mexican Consumer. Even though many Mexican consumers are set in their ways, the younger Mexican consumer is setting new trends without completely ignoring the old. “Young people are increasingly independent financially, and like all young people from any generation, (they) are rebellious and want to blaze a trail from that of their parents” which is changing Mexican consumer behavior (Day 2002).
Some of these new trends include:

Examples

1. McDonald’s Corporation has targeted the Mexican consumer by coming up with the McBurrito a la Mexicana (i.e., burrito Mexican style.) Not all Mexicans eat the traditional American hamburger or chicken nuggets, so McDonald’s made the proper changes to meet Mexican consumer needs. Mexicans take a lot of pride in their food so McDonald’s took a traditional Mexican food and made it McDonald’s style to accommodate the Mexican appetite. It is a win-win situation – the consumer can have a traditional burrito and still have American McDonald’s fries. For those that do eat hamburgers, McDonald’s just translated the food names into Spanish. The Big Mac is the McNifica, which means magnificent. It will still satisfy the Mexican taste for a big fresh meal.

2. Auto retailers also have targeted the large Mexican market. Ford has taken into consideration the wants and needs of the Mexican consumer and has designed the Ford Fiesta. Mexican consumers need small, compact cars to drive in their narrow, busy city streets. They also want a spacious car to fit their large families, groceries, and other shopping bags. Therefore, Ford has marketed the Fiesta as “Compacto por fuera, muy amplio por dentro,” which means, “Compact on the outside, very spacious inside”. This seems to be just what the market ordered.

Relevant Web Sites

The following are web sites that have relevance to Mexican Consumer Behavior and/or mentioned in this tutorial.

References

Anonymous (1995) “Food shopping trends in Mexico,” American Demographics Marketing Power Supplement, p10 (December)

Byrne, Eileen (1994) “Mexican consumers & their appetites,” Business Mexico, v4 n 54, p16-18 (May)

Day, Paul (2002) “Shock of the new,” Business Mexico, v12, n11, p42-48 (November 2002)

Fromson, Derek (1992) “Mushrooming malls: Developers search for the perfect lure,” Business Mexico, v2, n10, p14-19, 43 (October 2)

Galceran, Ignacio (1995) “A new world of consumers,” American Demographics, v17, n6, p26-33 (March)

Hanson, Gordon (2003) “NAFTA, Wages, and Mexico” [Online] http://www.geocities.com/CapitolHill/2197/economics/economics.htm

Hawkins, Del I., Roger J. Best, and Kenneth A. Coney (2001) Consumer Behavior: Building Marketing Strategy, Eighth Edition. Boston: McGraw-Hill

International Marketing Data and Statistics, (1998) London: Euromonitor Plc,

Mizrahi, Tanya (1999), “Reinventing Sushi,” Business Mexico, v9, n10, p60-62 (October)

Triplett, Tim (1994), “Middle-class Mexicans share traits with U.S. counterparts,” Marketing News, v28, n21 p8 (October 10)

Turner, Molly (2001), “Dream Niche,” US Business Review [Online] (October) http://www.usbusiness-review.com/0110/01.html

Wilke, James, et. al (2002), Statistical Abstract of Latin America, v38 California: UCLA Latin American Center Publications.

Test for Understanding

1. Mexican product views and thought processes tend to be:
A. very similar
B. not similar
C. complex
D. easy to understand

2. Since 1995, unemployment in Mexico has:
A. risen
B. fallen
C. stayed the same

3. Compared to US consumers, Mexican consumers tend to be:
A. brand loyal
B. family oriented
C. price conscious
D. all of the above

4. What communication method in Mexico is growing at a rapid rate?
A. newspapers
B. televisions
C. cellular phones
D. home phones

5. Which of the following are the new Mexican consumer trend setters?
A. the high social class
B. the media
C. the younger population
D. parents


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Answers:

1. A
2. B
3. D
4. C
5. C