2008 presentation from Crossborder Group, given to the AMA Beyond Borders Conference in Dallas. Many marketers don't understand the interconnectedness of crossborder consumers in the US-Mexico border region -- nor the concept of La Tercera Nación, the 10-state region of largely Mexico-derived Spanish speakers that share many consumer preferences...and marketing opportunities... For more information, contact Crossborder Group at 1-888-492-6733, or 619-710-8120.

1. Crossborder
Consumers &
Borderland
Marketing
What’s “La
Tercera Nación”?
2008 Beyond Borders Conference

2. Niches: Marketing Opportunities
 Looking at niches “Beyond Borders”
 Too often, we have “border mentality” – whether for
business or public policy planning
 Think maps…
 Part of today’s goal: break perceptions, and
open minds to new opportunities…
 Can Think Big – “Capturing Next Billion
Consumers”…
 …or, can also look at overlooked “nearby
opportunities”

3. Opportunity: the Borderlands
 US-Mexico Crossborder Consumers &
Borderland Marketing
 “Borderlands” or “La Tercera Nación”
 “Markets don’t stop at borders”
 Borderlands span the US-Mexico border
 Blend of two countries, cultures and consumer
tastes…not quite US, not quite Mexico
 69 million in US States
 19 million in Mexican States
 …Focus will be on Spanish speaking populations

4. Where is La Tercera Nación?
 US States
 Texas
 New Mexico
 Arizona
 California
 Mexico States
 Tamaulipas
 Nuevo León
 Coahuila
 Chihuahua
 Sonora
 Baja CA

5. Spanish Speaking Marketplace
 Not “one billion” consumers…but about 36 million
Spanish speaking (19M in MX, 17M in US)
 Area contains nearly ½ of US Hispanic population

6. Area of Relative Wealth in Mexico
 Despite perceptions, Mexico Borderlands have some of
the highest proportion of upper-earners in workforce…
 Many of these have visas to visit the US…

7. Metro “Hispanic” Ranking Changes
Hispanic Additional Mexico
Market (metro/DMA) U.S. Rank
Population Metro Population
Los Angeles 8.4 million 1 NA
Miami-Ft. Lauderdale 2.1 million 3 NA
Chicago 1.9 million 4 NA
+1.1 million
McAllen Metro 1.1 million 10
Matamoros/Reynosa
+1.7 million
San Diego 951,000 11
Tijuana Metro
+1.3 million
El Paso-Las Cruces 839,000 13
Ciudad Juárez

8. Who Are Crossborder Consumers?
 Depending on MX state, 20-
35% of population has visa
(can cross)
 Tend to be mid- and upper-
earners
 Very familiar with US brands
and stores
 Tend to cross on regular basis
– about 18-20 million US-MX
border crossings monthly

9. Crossborder Consumers (2)
 About 75-80% of Mexico-Residing
Motivation for Crossing
crossborder travelers (n=1321)
are Mexico Residing 0% 20% 40% 60% 80%
Shopping 60.9%
 Motivation for crossing: Family or Social Visit 12.8%
 Shopping (50-70% - Work or Business 21.2%
Visit to a Casino 0.6%
depending on season)
Medical or Health Reasons 1.1%
 Work or business (20- Vacation or Tourism 0.3%
25%) School 0.5%
 Family or social visits Other 2.6%
(10-15%)

10. Crossborder Consumers - Shopping
 MX-Residing Crossborder NA/No Response 0.4%
Consumers shop in the US More than 10 5.3%
on a regular basis 9-10 times 0.4%
 About 15% more than 7-8 times 3.5%
weekly 5-6 times 5.3%
 Nearly 80% more 1-4 times
3-4 times 28.9%
per month 50.4%
1-2 times
 Expenditure: borderwide
0 - ZERO 5.7%
ranges from $110-160 per
0% 20% 40% 60%
trip (average)…
 $25-30 million per day…

11. Crossborder Shoppers – Where?
 Visit many of the same stores you do
 Walmart, Target, Sears, groceries, etc.
 …even if similar stores in Mexico (product mix
issue)
 Mx-Residing Crossborder Consumers tend to
visit Walmart more frequently than Target…
 More frequent Mx-Residing Walmart shoppers
tend to report income in the $1k-$3k per month
range
 More frequent Mx-Residing Target shoppers tend
to be older than Walmart shoppers…

12. Crossborder Consumer Tastes
Most Preferred Stores in SD
 Not dissimilar from US-Residing 0 50 100 150
Borderland consumers re: store WalMart
Target 72
127
preferences & brand demands CostCo
Ross 31
52
Home Depot 24
 Some of these preferences Sears
14
19
Swap Meet
shaped by strong social ties JC Penny 14
12
Vons
across borders Kmart
Payless
11
10
Macy's 8
 Opportunity to reach and shape Food4Less 8
preferences through crossborder Albertsons
Sams 7
8
family & social networks Mervyns
4
7
Ralphs
 …and use Borderlands for Old Navy
"Las Americas"
4
4
“nearshore” product testing and Nike
BestBuy
4
4
product roll-outs

13. Crossborder Advertising
 Can be effective way to target
Crossborder Consumers…if done
correctly
 Case Study: “Why are we advertising
at border?”
 Hadn’t done research
 Had rolled out new service offering, but
thinking “Hispanic”, not Borderland
 Never fully explored Borderland market
options or marketing strategies
 Also…had own internal “borders” within
company (pre-set territories limited
options)

14. Borderland Marketing
 Brings me to some of my last points:
 Focus has been on Mx-Residing Crossborder
Consumers, but 20%+ are US-Residing
 Mostly Hispanic (about 80-90%)
 Mostly Spanish-speaking
 Strong familial connections in border regions
 All have to cross the border at some point…
 Cost to market to this segment can be lower
 At-border marketing campaigns
 At-border samples
 Mexico-based media that spans border (radio, TV, print)

15. Borderland Marketing (2)
 Other key points:
 Don’t assume Mexico City-based HQ understands
the Borderlands…
 Often,
not connected to region, may have “elite”
perspective of border populations…
 Don’t assume that “Mexico” data applies to
Borderlands
 Higher degree of English-language capabilities
 Higher incomes
 Better telecom and internet infrastructure (and use)
 Get your own data!

16. Gracias!
&
Thank You!
CrossborderBusiness.com
1-888-4XBORDER