Bordered to the north by one of its biggest trading partners, the US; Mexico has a very healthy small and medium sized enterprise ecosystem, which accounts for 52% of GDP, and almost 72% of job creation.
With 31 states, and a special federal entity, which is Mexico City, the country’s most densely populated city, there are several other grand metropolitan areas, like Gaudalajara, León, Puebla, Monterrrey, Tijuana, and Toluca. A regional power in Latin America for some time, some say that Mexico is now en route to becoming a significant global power also, and could become the world’s fifth biggest economy by 2050.
Some of the bigger companies operating in Mexico include multinational beverage and retail company Femsa; the Belgian-Brazilian owned brewery Grupo Modelo; US owned paint-maker Grupo Comex; mass media Grupo Televisa, which airs much programming in the US; global conglomerate Grupo Carsa; and baking giants Grupo Bimbo. Growing consumer sectors include education and training; electronics; energy; automobile; environmental protection equipment; construction; telecommunications; security; and tourism.
Home to almost 120 million people, and with a landmass of nearly two million square kilometres, the average disposable income per capita in Mexico is USD$14k. However, there is a vast gap between the rich and the poor, with the highest earning fifth of the population earning around fourteen times the wage earned by the lowest earning 20% of the population.
A governmental social services programme called Oportunidades (now rebranded as Prospera) was founded in 2002, and offers a cash transfer to around six million impoverished homes, or around quarter of Mexico’s population, and is said to have greatly impacted enrolments rates at secondary level, particularly for girls. Child and maternal morbidity improvement have also been linked to this project.
Educationally, Mexico is still developing, with only 37% of the population aged 25-64 having completed secondary school education. While Mexicans spend an average of almost 15 years in the formal education system, levels of reading, literacy, mathematics, and science in Mexico are the lowest in the OECD, which Mexico was the first Latin American country to join. Test results are improving, however, and enrollment rates and outcomes show steady upward movement on progression graphs. Younger Mexicans are staying in education for longer, and netting better results than the generation that preceded them. Education levels and bilingual abilities are directly linked to income bands.
Around 61% of those aged between 15 & 64 are in paid employment; 79% of men have a job, while only 45% of women work outside the family home. A happy nation, Mexicans rated their life satisfaction at 6.6 out of ten, just higher than the OECD average of 6.5. Social networks (not specifically online social networks, but the traditional meaning of the term) are given great importance in Mexico, where family values are very strong. 80% of Mexicans said they had someone to turn to in a time of need. New companies coming into the Mexican marketplace should invest strongly in professional networking, working with a local Mexican PR agency to ensure new arrivals to the market meet the right people and influencers from the outset.
That said, quality of life is improving quickly for Mexicans, and there are as many as 17 million people with an income of more than USD$40k annually. This sector of society regularly heads to the US for shopping excursions, and represent a well-established e-shopping population. Mexicans are increasingly time-poor as the demands of work and family life leave little spare time. Consumers want high quality products that will help them to save time as well as money.
The best PR agencies in Mexico appreciate that most consumers seek a relationship with the brand, rather than a simple trade transaction, this efficient and individualized customer service supports are crucial for any new company. While men are involved in big purchases, it is largely the women in a Mexican household that makes the spending decisions.
When the global economic crisis hit hard in 2008, Mexicans cut back on spending, ate out less, spent less on travel & tourism, etc. However, it was noted that the population largely remained loyal to preferred brands, and did not trade off for cheaper versions of products, as was witnessed in north America, one of Mexico’s main trading partners.
While Mexicans spent less on food, for example, they stuck with their favourite brands, albeit buying less, overall. Loyalty marketing is particularly potent in Mexico and those that tried out new brands during tough financial times, generally report that they now consider themselves loyal to the new brand, which exceeded their expectations.
Mexicans tend to stick with what they know and trust. Companies offering money-back guarantees, and simple product return policies, when introducing new brands to the market may note increased sales, as Mexicans shoppers can be quite risk averse, a consideration that should be incorporated into any Mexican PR strategy. Removing the risk means it is safe to test out new products and brands.
Even through tough financial times, Mexicans continue to invest their cash on education. During the economic downturn, spending on education actually increased, with many Mexican families investing in extracurricular activities and remedial assistance for children.
Foreign produced goods are seen to be of superior standard to locally produced goods, creating a distinct advantage for companies that focus their brand messaging on the quality of their product, while ensuring to benchmark pricing, to ensure that products are not over-priced in comparison to the local equivalent, or nearest competitor. Mexicans will definitely pay more for a foreign brand that is deemed to be superior in quality, but at the same time, so not wish to feel that they are being ripped off in any respect.
Foreign companies entering the Mexican market will be glad to know that the government has a sustained focus on opening various industrial sectors, with the aim of retaining close trade relations with the US, and the rest of Latin America, which has netted increased on foreign trade investment.
Put simply, the government wants to see more global trade, and is willing to create a favourable business environment for foreign companies. Commentators have also described a recent case of “malinchismo” in the country, a predilection for the foreign and foreigners.
A national English language policy, to ensure the presence of a bilingual workforce for multi-nationals is one such measure taken by the Mexican government, although it may fail to reach all sectors of society. By 2015, the National English Programme in Basic Education had reached 6.7 million students, or 18% of the population. A deficit of adequately trained English teachers is thought to have slowed the progress of this programme.
While overall proficiency levels in English are low across the population, it is interesting to note that 33% of businesses in Mexico use English daily, as the regular language for internal communication, while 47% communicate in English for external business. 51% of businesses offer English language tuition to staff members, while 69% of companies in Mexico said English was an essential skill when hiring new staff, with business leaders stating that English proficiency in the workforce allowed them to deal effectively with foreign clients and customers, vital in this age of globalization.
While English may be spoken in many companies, it is still vital that you are prepared, via your Mexican PR agency, to present yourself to your target audiences in Spanish. Even in business meetings, a few social niceties in Spanish will always be well received, even if you do not have the fluency to conduct a full business conversation. It shows that you have a real interest in the country and its culture.
The Mexican sense of humour or famous for its likeness to mockery, and political correctness has yet to find its feet in the country, so don’t be too alarmed if you earn a stereotypical nickname from Mexican associates. It’s meant in mirth, and not intended to hurt your feelings, but rather as a stepping-stone to friendship. The dark sense of humour pervades every area of daily life, and while Mexicans can casually make jokes at a moments notice, they may be very offended if visitors join in the fun, making jokes about certain aspects of Mexican culture. Jokes about religion are not tolerated in the predominantly Catholic country.