According to Thiago Moreira, director of Telecom for Nielsen in Brazil, the purpose of the research was to determine how much advertising agencies in these three important Latin American markets knew about mobile marketing and what kinds of campaigns they typically undertook.  “What we learned is that while mobile marketing is just emerging as a marketing discipline in all three countries, it is taking on very different characteristics in each of these markets, with Brazilian agencies being the most active in mobile marketing.”

Brazil

• 83 percent of agencies in Brazil believe that mobile marketing is a channel that can be better exploited.
• 62 percent of the agencies surveyed in Brazil launched mobile marketing campaigns in 2010, a figure that is expected to increase to 87 percent in 2011.
• Most mobile marketing initiatives in Brazil use multimedia with games and music and video downloads, and for 2011, 50 percent of campaigns will reach iPhones users alone.

Argentina

• 65 percent of agencies in Argentina believe that mobile marketing is a channel that can be better exploited.
• 43 percent of Argentinean agencies will develop mobile marketing campaigns in 2011 aimed at iPhone users
• The most used content within mobile campaigns: Product information and alerts, sales and offers (30%), games (26%) and music and video downloads (21%).

Mexico

• 59 percent of agencies in Mexico believe that mobile marketing is a channel that can be better exploited.
• 41 percent of agencies in Mexico are expected to direct their mobile campaigns to iPhone users
• The most-used content within mobile campaigns: Product information, alerts, sales and offers (32%), music and video downloads (27%) and games (20%).

With a population of more than 112 million people and an area about three times the size of Texas, Mexico is a vast country.  As the second most populous country in Latin America and the most populous Spanish-speaking country in the world, it is a vital market for marketers and consumer packaged goods companies to understand.  But to view Mexico’s consumers as uniform in their shopping habits and trends would be a mistake: consumption patterns vary widely based on where people live.  Retailers and CPG manufacturers seeking to win in this diverse nation would do well to appreciate its regional diversity.

On a national basis, the average Mexican consumer belongs to a medium sized family (between 4-5 members) with low to modest purchasing power largely wielded by a head of household who has no formal job outside of the home.  However, there are stark and important regional differences in both household composition and consumption behavior throughout the country.

When it comes to income, there seems to be a great divide:  The northern half of the country has higher income and in turn, purchasing power, since women tend to work outside of the home in addition to raising families; in the southern half, income levels are generally lower.  Consumers in the North, Pacific, and Lowlands regions of Mexico tend to have above-average purchasing power and live in households where the homemaker generally has a formal job.  In the Valley of Mexico and in the Central and Southeast regions, consumers have much lower levels of income and purchasing power.

Nielsen research and analysis identified certain similarities in consumption behaviors between certain regions with geographical proximity to one another: between the Pacific and North regions, which border the United States, and the Lowlands and Central Mexico. Consumption patterns in both the Valley of Mexico and the Southeast, meanwhile, tend to show significant differences compared to the rest of the country.

While the majority of the country’s population is concentrated in the Valley of Mexico region – which is dominated by Mexico City – consumers in the Pacific, North and Southeast regions tend to spend more money per household than the average consumer in the Valley.

Retail Channels and Shopping Frequency
With respect to retail channels, traditional stores remain resoundingly prominent throughout the country.  This is especially true in the Lowlands and Central Mexico, where alternative channels have not yet grown as much as in other regions.  Convenience stores and small-format supermarkets are most popular in the Pacific-North areas.  Large-format supermarkets, on the other hand, play a bigger role in the Valley of Mexico and in the Southeast than in the rest of the country, although the other regions are catching up.

In all regions, traditional stores are visited on a daily basis—and sometimes twice a day.  The typical consumer visits the supermarket twice weekly, with Sunday the most popular shopping day.  Shopping during the week is most prevalent in the Pacific-North and Southeast areas.

The Nielsen Company recently analyzed the demographics of Brazil, Chile, Colombia, Mexico and Puerto Rico, and estimates that people age 50+ currently make up 19% of the population.  But that number will rise to 26% by 2025 and 38% by 2050.  Households with mature housewives (who drive buying decisions in the home) account for 30% of the region’s populace.  In Puerto Rico, such households make up more than half (54%), while in Chile they represent 40%, in Colombia 35%, in Brazil 29% and 28% in Mexico.

Per Capita Spending Power
These older households – while being 13% smaller than the average home – have higher levels of per capita spending than other age groups:

• Chile: 17% higher
• Brazil: 15%
• Mexico: 15%
• Colombia:13%
• Puerto Rico: 12%

“In the next 10 to 12 years, one of every four consumers will be over age 50, and as in other countries around the world, older Latin Americans are defying the traditional stereotypes.  They are more affluent, spend more money and are open to new brands and products,” said Mary Paz Roman, Consumer Panel Services, Product Leadership Latin America at Nielsen.

Categories that currently attract a greater preference among more mature Latin Americans include hot and cold beverages, sweeteners/sugar, pet food and hair dyes and coloring, and retailers and manufacturers can expect increased popularity in years to come.  But other categories that could benefit – if manufacturers innovate and appeal specifically to this demographic – include a number of health and beauty segments such as shampoo, conditioners and deodorants.

“As competition for a greater share of consumers’ pesos, reals and dollars grows more intense, retailers and manufacturers should re-assess how they view this consumer group if they hope to seize the opportunities this new reality offers,” concluded Roman.

As we focus our attention on 2010, clearly the global marketplace is redefining itself. Not only in economic terms but more importantly in consumer terms. Consumers are more diverse, demanding and connected than ever before. To help give you a clearer look into what’s ahead, Nielsen has assembled videos from our global team to deliver insights into what consumers watch and what they buy. With evidence of a recovery emerging, understanding the global trends and local conditions is essential to success.

In Latin America, Nielsen reports sales of mobile phones have had a noteworthy increase in the last years, even though they are starting to have a diminution in the growth rate. Comparing the first quarter of 2009 against the same period of 2008, the sales rate has slowed down to 12%.

Countries such as Mexico and Brazil—where the density of devices per inhabitant is still smaller than that of the regional average—prompted sales with double digit unit gains of 20% and 16% respectively. Corresponding U.S. dollar sales rates were more modest, at 3% for Mexico and 6% for Brazil. Together, given their relative size, mobile device sales in these two countries offset the combined unit sales losses unilaterally in Argentina, Chile, Colombia and Venezuela.

Considering the market size in the region, if each mobile phone owner has at least one line, it is estimated that there are 460 million active lines in Latin America. This represents an important new growth channel and significant opportunities for the Telecom industry. It is estimated that in the next few years, sales of Smartphones will continue to increase, giving rise to the growth of the Value Added Services (VAS) penetration.

Like their North American counterparts, Latin Americans were interested in mobile phone features. In the last year, handsets sold in the region included camera (61%), radio (55%) and MP3 player (35%). All of these features showed considerable growth when compared to the previous year.

Motivating factors
An in-depth segmentation analysis in Brazil was conducted to understand what cell phone users in the region were looking for—convergence, greater connectivity, more entertainment or features. Four distinct segments of cell phone consumers were identified: 16% of Brazilian subscribers use only voice features, 28% use voice and SMS capabilities, 37% use features offline (such as; camera, MP3 player, etc.) and finally, 19% use value-added services, which include Internet access, ringtone downloads, etc.

Value-added service users accrue greater expenses—bills are typically 20% more than the average voice-only mobile user’s tab. These consumers tend to be younger (almost two-thirds are under age 34) and 40% reside in more affluent socio-economic levels, which makes the middle class an important market opportunity for expansion.

In Brazil, the VAS consumers are using the device as a downloader tool, when going online.

Understanding the particular segmentations in each market becomes crucial in order to reach the consumer with the most appropriate offer. This kind of analysis provides a more complete and insightful look into subscribers to understand motivations that drive the decision-making process.

Growing trend
While the trend of women working outside the home has been more evident in developed countries, it is also present in developing nations—as is the case with Latin American countries. According to the International Labor Organization (ILO), 53% of Latin American women are linked to the labor market—a proportion which reaches 70% of the women between the ages of 20 and 40 years old. Further, the United Nations Population Fund (UNFPA) estimates that roughly 44 million women joined the labor markets of Latin America and the Caribbean in the last decade.

A Nielsen analysis in Latin America of more than 20,000 households across countries in Brazil, Chile, Colombia and Mexico further support the findings that there is a clear growing trend of women working outside the home. In Chile, for example, the percentage of working women grew from 31% in 2007 to 34% in 2008. In Mexico, the number of working women increased 10% over eight years reaching 35% in 2008. Of the four countries, Columbia has the greatest percentage of working women at 40% and Brazil follows closely at 36.6%.

Education creates opportunities
As women’s education levels increase, so do job opportunities. By the end of the 1990s, the United Nations reported that Latin American women between the ages of 30 and 45 with a formal education at the elementary level had a workforce contribution of 55%. That rate rose to 60% when women had an unfinished high school education, 65% with a high school education and more than 80% with a professional degree.

Nielsen data reinforced these findings—as the socioeconomic level increases, more women are educated and therefore have more opportunities for employment. The chart below shows occupation trends of housewives in Mexico from April 2008 to March 2009.

Lifestyle drives purchasing decisions
The rising purchase power of Latin American women is similar across most of the countries in the region. To better understand how this growing economic trend is impacting shopping behavior, Nielsen conducted an analysis in the Mexican market to compare the growth of shopping volume among households where women work vs. the total population.

The findings show that time-starved households—those balancing both work and home responsibilities—are looking for convenient products that save time and are easy to prepare. Categories that over index among households where women work include soups, ready-to-eat cereals, mayonnaise, flavored water, ready-to-drink beverages and packaged bread. And since women who work outside the home generally have more social interactions, hair treatments/conditioners and deodorants also have a high spending index.

Driven by the lack of time to go shopping at the supermarket, door-to-door sales is growing significantly in households where the woman works—spending is up 2.8% in 2009. Health care and beauty categories are the primary drivers of this growth—women who work have increased spending 15% in 2009 vs. 2008. Household products have also contributed to this growth, increasing 8.9% among working women vs. a spending decline of 20.9% among women who don’t work.

Reaching women
Women who are balancing both home and career are becoming increasingly important in the Latin American markets—those between the ages of 20–40 with higher education levels make up the highest percentage. Key purchase drivers for this segment include:

• Ready-to-eat food categories
• Convenient shopping outlets
• Health care and beauty products

While 53% of those surveyed by Nielsen think their country has hit a prolonged recession that will last more than 12 months, 18% of consumers, concentrated in a handful of emerging markets, like India, Vietnam, China, and Russia, told Nielsen they expect their countries to be out of recession within the next 12 months.

In contrast, consumers in Japan, Germany, Argentina, Mexico, Turkey, Italy, Taiwan, the U.S., and Spain were the least optimistic about the prospects for quick economic recovery.

Nielsen surveyed 28,663 Internet users in 52 markets across Europe, Asia Pacific, the Americas, and the Middle East between September 22 and October 6, 2008, as part of its Global Online Consumer Survey.

The survey’s results reveal that global consumer confidence fell to a new low this month, dropping from an index of 88 in May 2008 – previously the lowest index on record – to 84 in October, according to Nielsen.  Only Brazil, the Philippines, New Zealand, China, Thailand, South Africa, and Hungary showed improved consumer confidence, compared with May 2008.

Not surprisingly, consumers worldwide are adopting new strategies to reduce discretionary spending and shore up household finances.
 
On average, 49% of global consumers plan to spend less on new clothing, as well as gas and electricity, according to Nielsen. 

Meanwhile, 47% report reducing out-of-home entertainment, 40% say they’ll delay upgrading to new PCs and mobile phones, and 39% will cut down on take-away meals from restaurants. 

Even necessities, like groceries, are on the chopping block — 36% of global consumers report switching to cheaper grocery brands in order to reduce their expenses.

Overall, consumers in Australia, New Zealand, Germany, the U.K., Turkey, the U.S., Colombia, and Argentina plan to make the most changes in their spending habits, as they search for ways to weather the current economic turmoil.

View the full press release.

Read a related press release on consumer confidence in Hong Kong and Great Britain.

Read coverage of Nielsen’s findings by Sky News and in the Shanghai Daily, the Business Standard (India), Forbes, the Financial Times, The China Post, the Thanh Nien Daily, and the Malaysia Star.

Learn more about global consumer confidence levels in the December 2008 issue of Nielsen’s “Consumer Insight” online newsletter.