DOING BUSINESS IN MEXICO

Mexico

Fear of the unknown –Language, culture –Export paperwork –International Insurance, Business Loans Budget Market entry

Mexico 102 million people 1.7% population growth per year 62% pop between years 33% pop between 0-14 years

The Mexican Market Why is it important? –2 defined economic groups: rich & poor Poor majority does not equal insignificant market 30 million consumers w/discretionary income Concentrated in major cities Sophisticated shoppers Rich = really rich = 24 out of 500 richest men are Mexican.

The Mexican Market –Largest number of FTAs Trade US & CAN tripled since NAFTA 1994 –Lots of $ in Mexico - Income distribution: top 20% earn 55% of total & private consumption lead growth in past 2 years –Actively seeking foreign participation in its economy: no. state owned enterprises fell 1982 >1000, 2000 <200

The Mexican Market Exports: $168 billion Imports: $176 billion Infrastructure –Airports: 238 (paved), 1610 (unpaved) –Seaports:15 (major) –Expressways: 3960 miles –Highways: 56,178 miles

Expressways

Mode of Entry Exporting –Direct & Indirect Joint Venture –Licensing & Franchising –Management Contracts –Turn-key projects –Ownership arrangements Foreign Direct Investment

Challenges/Success Factors Foreigner Language Barrier Work approach Relationships Perception Skills: blending in Few words Access to high levels & business etiquette Networking

Mexican Flag

Doing Business in Mexico Conscious of history and tradition - proud and patriotic Patience is advised - skeptical of foreigners in their country and business “Despacio que tengo prisa” Establish reputation by keeping every commitment

Business Savvy Initial contact with key decision maker Networking: opens doors Chambers Government contacts Before: Research & Recommendations

Business Savvy Telephone or verbal? In writing, or fax & follow up Need signature for agreements Translations & translators - avoid mistakes Do you really speak Spanish? Advertising - hire a professional

Business Savvy Direct selling –Control over product –Expenses: staff & inventory Branch office –US trained personnel in control of ops –183 days over 12 month-period

Business Savvy Broker/Representative –Familiar with your market –Not exclusive Master distributor –One client, large shipments –One more on his list?

Business Savvy Joint venture –Ownership position in your business –Finding Mr. Right

Business Protocol Non-smoking areas - unknown Who pays? Whoever extended invitation A woman NEVER pays. Refer to people by their prefix Prefix, First Name, (Middle name), Paternal Last Name, Maternal Last name

Business Protocol NAME Maiden –María (Elena) Gómez Ramírez Address –Lic. Gómez / Srita. Gómez Married –María Elena Gómez de Rodríguez

Business Protocol ETIQUETTE Woman enters room - stand up Carry plenty of business cards Don’t be hyperactive Don’t look at the watch constantly –allow at least 2 hours per meeting (+ traffic) Be on time, expect others to be late

Business Protocol ETIQUETTE Personal space closer Touching, hugging, kissing Louder Hand gestures

Business Protocol ENTERTAINMENT May or may not discuss business –Avoid talking about income, status, investment & historically sensitive topics Watch out for altitude & alcohol! Dining takes long, no rush Different hours - snacks

Business Protocol Weekly Schedule 8:00-9:00/10:00 Breakfast 10:00-2:00 - Office hours 2:00-4:00/5:00 - Lunch 4:30-6:00/7:00 - Office hours 7:00-9:00 - Cocktails, happy hour 9:00-Midnight/beyond - Dinner