Doing business in mexico1

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A short intro to Mexico Market scene for International Business students from Incarnate Word University of San Antonio, Texas, by Carlos Diaz, professor at Centro Universitario Incarnate Word, Mexico City campus. Comments are welcome at cdiaz@ciw.edu.mx.

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Doing business in mexico1

  1. 1. Doing Business in Mexico Special Presentation by Carlos Diaz, Professor at CIW-México City November 9, 2012
  2. 2. Doing Business in Mexico• Brief introduction of presenter• Mexican Market Highlights• Products and services available• Pricing comments• Distribution schemes• Advertising and Promotions• Cultural aspects• Simple tips about Doing Business in Mexico• Q&A
  3. 3. Brief introduction of Carlos Diaz• Attended Eagle Pass High School, BSEE from The University of Texas at Austin• Worked mostly in Multinationals like IBM, Xerox, Honeywell, Duracell.• Started two companies of his own, – Distributor of Home Appliances and – Managerial Seminars for Austin-based company• Part-time professor here and another University, teaching Marketing and Business subjects
  4. 4. Mexican Market Highlights• Total country population: 115 million• GDP: 1,155 trillion US• GNI per capita: $9,240 US• Life expectancy 77 years• How do they compare to US, and what about Mexico City by itself versus…San Antonio, and Texas?
  5. 5. indicator Mexico USA Mexico San Texas Mexican Market Highlights Country Country City (DF- metro) AntonioPopulation 115/ 313/ 9-22/ 1.4/ 22.8/• Totalinmillions/Ar country9,100 1.4 1,943 population: 115 million 0.742 420• GDP: 1,155 trillion USea 000’s sqkm• GNI 8.5/ USA AND MEXICO,Mean yrs ofper capita: $9,240 US 12.4/life expect.expectancy 77 years BY SIDE SIDEschooling/ 77 78.5• LifeGDP In 1,032 15,094 -- -- --• How do they compare to US, and what aboutmillion US Mexico City by itself versus…San Antonio, andGNITexas? per $9,240 $48,450capita in US
  6. 6. indicator Mexico USA Mexico San Texas Mexican Market Highlights Country Country City (DF- metro) AntonioPopulation 115/ 313/ 9-22/ 1.4/ 22.8/• Totalinmillions/Ar country9,100 1.4 1,943 population: 115 million 0.742 420• GDP: 1,155 trillion USea 000’s sqkm• GNI 8.5/ MEXICO CITY, SAN ANTONIOMean yrs ofper capita: $9,240 US 12.4/schooling/ 77 78.5 AND TEXAS, SIDE BY SIDE• Lifelife expect.expectancy 77 yearsGDP In 1,032 15,094 -- -- --• How do they compare to US, and what aboutmillion US Mexico City by itself versus…San Antonio, andGNITexas? per $9,240 $48,450capita in US
  7. 7. Products and services available• In big cities like Mexico City, Guadalajara, Monterrey, almost all available, like in US• Food, medicines, automobiles, computers, phones…. – Maybe few days/weeks/months after US• Less variety, or different presentations• Few niches still available for US products or services, mostly technological, services
  8. 8. Pricing comments• Most products and services are somewhat more expensive than US• Cheaper than US: public transportation, public schools, taxis, haircuts, fresh produce, fruits• Big Mac in US $4.20, $2.70 in Mexico• 16% VAT in most products and services• 25% income tax• Minimum salary: – Mexico $4.80 per day, – USA $7.25 per hour
  9. 9. Distribution schemes• Wal-Mart is biggest retailer (and employer) with 210,000 employees and 1,500 outlets• Plenty of competition from other super markets, department stores, malls, convenience stores and ‘changarros’ (mom-and-pop small stores in most neighbors)• Sears/Mexico is owned by Carlos Slim, one of the richest men in the world (Telmex, America Movil, Sanborns, etc)
  10. 10. Advertising and Promotions• Heavy TV advertising in soap operas, news• Newspaper circulation very low, print ditto• Exterior ads growing, specially in urban areas, bus stops (and buses), metro stations• Heavy promotion action for consumer goods in supermarkets, malls• Many small companies doing promotional actions for P&G, Colgate, Kelloggs in SM
  11. 11. Cultural aspects• Mexico is similar but different from USA• Young population influenced by US in clothes, music, movies, life-style, wants, needs – With much less disposable income• Adult population also, travels to US often, uses internet to buy products & services cheaper• Senior citizen group growing, aging similar to US, needing special products and services• Several Mexicos: urban & country, employees & self-employed, private industries & governments
  12. 12. Simple tips about Doing Business in Mexico- If you are planning to do business here, live here before you do- Learn Spanish, read a Mexican newspaper every day- Know the people, the lay of the land, the customs, the traditions- Look for unmet needs, wants, desires, dreams, and plan accordingly- Find a local partner whom you can trust and join forces- Start small, think big- Do not expect to make big (or any) profit the first year- Be patient and persistent- Accept the slow way we do business here, do not lose your temper- Enjoy your stay, your work, your neighborhood, your amigos, and
  13. 13. Simple tips about Doing Business in Mexico- If you are planning to do business here, live here before you do- Learn Spanish, read a Mexican newspaper every day- Know the people, the lay of the land, the customs, the traditions- Look for unmet needs, wants, desires, dreams, and plan accordingly- Find a local partner whom you can trust and join forces- Start small, think big- Do not expect to make big (or any) profit the first year- Be patient and persistent- Accept the slow way we do business here, do not lose your temper- Enjoy your stay, your work, your neighborhood, your amigos, and

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