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Market in focus: Mexico

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Jorge Vargas, CEO of TNS Mexico, reveals how a national campaign against obesity is creating new challenges and opportunities for brands.

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Market in focus: Mexico

  1. 1. Intelligence Applied Emerging markets Intelligence AppliedShare this From the Spanish conquest of the Aztec Empire in 1521, Mexico has evolved into a federation comprising thirty-one states and a federal district, Mexico City. The country has grown to become the tenth largest oil producer in the world, the largest silver producer globally and its economy is predicted by Goldman Sachs to become the world’s fifth largest by 2050. It is no coincidence, then, that Mexico represents the ‘M’ in the acronym ‘MINT’. Together with Indonesia, Nigeria and Turkey, the North American nation forms part of a group of emerging markets renowned for exceptional growth and favourable demographics. However, despite its prosperity, Mexico is a country dogged by issues surrounding obesity. In response to official figures revealing that 70 per cent of adults and 30 per cent of children in Mexico are obese or overweight, the government has launched a campaign targeted at leading FMCG brands. In the cities, for example, international brands such as Coca Cola, Bimbo, Danone and Nestlé are very well known and widely consumed. However, marketing efforts were hit earlier this year by a government restriction on television advertising for high-calorie food and soft drinks. This significantly limited the volume and impact of adverts for FMCG brands in this category, prompting a rethink in strategy and an exploration of other forms of marketing. The government has also increased tax on unhealthy snack foods, forcing brands to change the ingredients of certain products in order to comply with the new regulations. As a result, there is a growing market for companies producing diet products which avoid the increased taxes. However, obesity is not the only factor for brands to consider. Challenger brands looking to establish a presence in Mexico must be mindful of the important role of family values. TV icons and Brands to take the initiative in Mexican battle with obesity Mexico has grown to become the tenth largest oil producer in the world, the largest silver producer globally and its economy is predicted by Goldman Sachs to become the world’s fifth largest by 2050. However, despite its prosperity, it is a country dogged by issues surrounding obesity. At almost two million square kilometres, Mexico is the fifth largest country in the Americas by area and the 13th largest independent nation in the world. Its estimated population of over 113 million also makes it the most populous Spanish- speaking territory on the planet.
  2. 2. Intelligence AppliedShare this Brands to take the initiative in Mexican battle with obesity About TNS TNS advises clients on specific growth strategies around new market entry, innovation, brand switching and stakeholder management, based on long-established expertise and market-leading solutions. With a presence in over 80 countries, TNS has more conversations with the world’s consumers than anyone else and understands individual human behaviours and attitudes across every cultural, economic and political region of the world. TNS is part of Kantar, the data investment management division of WPP and one of the world’s largest insight, information and consultancy groups. Please visit www.tnsglobal.com for more information. celebrities are regularly seen in adverts and public appearances surrounded by family, with brands using them as role models to portray the importance of family life. That being said, the dynamic of families in Mexico is changing. Divorce rates have started to go up over the last 10 years, although they are still around 15 per cent, which is very low in comparison with rates in Europe and the US. Women are increasingly becoming senior figures in the business world, leading to double income families and a change in the role of men and women at home. This mirrors the role of women in many traditional families in Mexico, where it is often they women who decide where the family budget is spent. Despite the perceptions of the country as having ‘macho’ values, brands must not be wedded to traditional notions of the Mexican family. They should look to target mothers who are most likely to be buying products for their families. Mexico is a traditionalist country, mainly based on the Catholic and indigenous culture. This tradition is shown in several Mexican celebrations, like the Day of the Dead; a mixture of the Catholic “Day of all saints” and the cult of death of the ancient indigenous cultures. As a result, many Mexican brands tie their advertising into local and religious festivals and events. For example, the Day of the Dead is a focus for Jose Cuervo’s ‘Tradicional’ tequila brand. While this may seem an unlikely partnership, the marketing is based on honouring the deceased using their favourite foods and beverages. Being attuned to cultural idiosyncrasies and associating themselves with popular events can help international brands gain the widespread notoriety needed for a stronger market position. Alcohol in general is a major source of international advertising, particularly beer brands such as Corona, Victoria and Tecate. The most successful advertising and social media campaigns in Mexico are those that aim to amuse consumers, using humour to create affinity with the brand. There is a clear opportunity for international brands to target the younger generation who are more impressionable and increasingly open to a greater choice of products. This is particularly true of challenger brands that should be looking to capitalise on Mexico’s status as a fast-growing MINT country. Gaining popularity with Mexico’s youth population could prove to be very lucrative in the long run. Jorge Vargas is CEO of TNS Mexico. Since his appointment in 2012, Jorge has used his extensive experience to help clients make better decisions and develop expertise within the Mexican business. For more information about TNS Mexico, contact Jorge.Vargas@tnsglobal.com About the author If you would like to talk to us about this report, please get in touch via enquiries@tnsglobal.com or on Twitter @tns_global

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