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MEXICO
THOUGHT LEADERSHIP
TOP 50 MOST VALUABLE LATIN AMERICAN BRANDS 2015
CONSTANCY
AMIDST CHAOS
Once, in some book by a classic author, I read
that in Greek mythology the word chaos did
not refer to “disorder”, but to a “different
kind of order”. Now that I’m looking for
that concept in texts by Ovid and Hesiod,
I wonder if my memory is true or rather
something I invented about my college
days. In any case, I think the idea is worth
mentioning in current times, when we live
surrounded by headlines that keep reminding
us change is all around us at a regional level,
but also day after day in our country.
FERNANDO ALVAREZ KURI
Vice President
Millward Brown Vermeer, Mexico
Fernando.Alvarez@millwardbrown.com
CONTRASTS: A WAY
OF LIFE IN MEXICO
I remember a foreign friend of mine, who
has been living here for years, defined
Mexico as ‘the country of eternal crisis’.
I think this term accurately describes
the constant change we experience as
a society. This is not only reflected in
our fluctuating economy: commercial
opening policies and media development
display before us a whole new array of
brand options, of experiences and needs
we now consider ours. Mexico’s opening
up, which started in the late 80s — a
process that positioned the country in
second place in terms of commercial
opening, preceded only by Chile — created,
probably unintentionally, consumers who
are more and more sophisticated, who
search for experiences they know are
ordinary in the First World and which they
expected to arrive here, but did not. Thus,
Mexicans became consumers avid for new
experiences, for new brands that let them
dream about an alternate reality where
they can foresee a better future.
Mexicans are people of contrasts, and
we must remember the country itself is
that way: urban and rural, modern and
traditional, a country with high poverty
levels but with the world’s richest man.
Mexicans might seek modernity, but
they will never relinquish the sense of
security that tradition offers them.
We are consumers who follow habits,
finding a kind of comfort — extremely
appealing — in the options we are
already familiar with.
IN PURSUIT OF
MODERNITY AND
TRADITION
In this context, it is no surprise that
the most valuable categories in our
country are the same year after year:
retail, beers, and telecommunications.
Together, the 18 brands within these
three categories represent over 70%
of the country’s Top 30 value. Retail
and beers are examples of brands that
have long been part of Mexican life
— they have the earliest foundation
average among the categories
listed in the ranking: 1927 and 1925,
respectively, against the median
foundation of the portfolio, which is
1945. Telecommunications is not that
new, either: its foundation dates back
to around the 1950s. Although these
categories and the brands within them
have “a history”, most of them are not
considered old brands by consumers,
since in Mexico they are the categories
that change the most.
Mexico’s telecommunications sector
is witnessing the entry of new
competitors as a result of last year’s
reform. Brands entering the market,
such as Izzi — an element in Televisa’s
strategy to steal share from Mexico’s
historic telecommunications giant,
Telmex, — are trying to simplify the
category’s value proposals, offering a
fresh perspective against the virtual
monopoly of its main competitor. The
presence of new options has posed an
important threat to the new leader,
which has responded by adopting the
same distinctive element that Izzi
used in its attempt to dethrone the
king: service prices, whilst also taking
advantage of the long-lasting tradition
in consumers’ minds.
ENTER THE GIANTS
In the case of beers, the past few years
have been decisive. The acquisition
of the two large Mexican brewers by
Heineken International and Anheuser-
Busch InBev marked a “before and
after” in the category. Large brands
with sophisticated practices suddenly
faced an environment of increasing
competitiveness as the introduction of
new brands — iconic in the rest of the
world — became a reality they were
forced to confront.
The entry of these two giant players
intensified the competitive scenario and
led local large brands to seek closeness
with users so as to gain relevance. From
Corona and its massive investment in
media during the FIFA World Cup 2014
— being official sponsor of this global
event for the first time — to Tecate,
which has chosen to try to become a
masculinity and pop culture maestro.
It’s done this through campaigns like
the one with the already famous phrase
“te hace falta ver más box” (“You need
to watch more boxing”). In short, beer
brands have sought to create solid
positionings that bring them closer to
their consumers’ daily lives.
As for retail commerce, 2015 was
a year of reorganization. The sale
of large formats and foodservice
of Comercial Mexicana —the third
largest supermarket chain in the
country — stands out. Soriana, the
second largest chain, surpassed
only by Walmart Mexico and Central
America, has strengthened its
presence by the purchase of large
areas (a total of 160 stores). Grupo
Gigante acquired Comercial Mexicana’s
foodservice business, which included
2 brands: California and The Beer
Factory. In this way, Grupo Gigante
has also strengthened its portfolio,
which includes the management in
this country of brands as important
as Petco and Panda Express. This
rearrangement of Comercial Mexicana’s
assets will result in an enormous change
in the retail sector in Mexico, since
it means not only a transformation
in terms of sales floor, but also the
disappearance of key promotions that
marked consumption trends in the
country, such as Julio Regalado: a 35
year-long discount campaign that set a
parameter for all competitors.
There is no doubt that Mexico is not the
same country as it was 50 years ago.
Furthermore, it is not the same country
as in the early years of the past decade.
Today, Mexicans live in an environment
quite different from the so-called
‘Mexican miracle’, a period in the late
20th century when commercial opening
and neo-liberal policies claimed, through
official statements, the country’s
triumphal entry to the ‘First World’.
Global financial crisis and public policies
to tackle competitiveness issues, and
delayed structural reforms – that are
only recently starting to take shape in
the Mexican market – became burdens
that undermined Mexican ideals in favor
of ‘the path to the glories of the First
World’. Brands and consumers grew up
in this environment: one where small
adjustments were —and are— made
here and there in pursuit of a better
future. Consumers expect brands to be
allies capable of fulfilling their promises:
we are a society looking for new
traditions that bring the certainty of a
better lived life.
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