Crossborder

Consumers &

Borderland

Marketing

What’s “La

Tercera Nación”?

2008 Beyond Borders Conference

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”

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

Where is La Tercera Nación?

US States

Texas

New Mexico

Arizona

California

Mexico States

Tamaulipas

Nuevo León

Coahuila

Chihuahua

Sonora

Baja CA

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

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…

Metro “Hispanic” Ranking Changes

Market (metro/DMA) Hispanic

Population U.S. Rank

Additional Mexico

Metro Population

Los Angeles 8.4 million 1 NA

Miami-Ft. Lauderdale 2.1 million 3 NA

Chicago 1.9 million 4 NA

McAllen Metro 1.1 million 10 +1.1 million

Matamoros/Reynosa

San Diego 951,000 11 +1.7 million

Tijuana Metro

El Paso-Las Cruces 839,000 13 +1.3 million

Ciudad Juárez

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

Crossborder Consumers (2)

About 75-80% of

crossborder travelers

are Mexico Residing

Motivation for crossing:

Shopping (50-70% -

depending on season)

Work or business (20-

25%)

Family or social visits

(10-15%)

Motivation for Crossing

(n=1321)

60.9%

12.8%

21.2%

0.6%

1.1%

0.3%

0.5%

2.6%

0% 20% 40% 60% 80%

Shopping

Family or Social Visit

Work or Business

Visit to a Casino

Medical or Health Reasons

Vacation or Tourism

School

Other

Mexico-Residing

Crossborder Consumers - Shopping

MX-Residing Crossborder

Consumers shop in the US

on a regular basis

About 15% more than

weekly

Nearly 80% more 1-4 times

per month

Expenditure: borderwide

ranges from $110-160 per

trip (average)…

$25-30 million per day…

5.7%

50.4%

28.9%

5.3%

3.5%

0.4%

5.3%

0.4%

0% 20% 40% 60%

0 - ZERO

1-2 times

3-4 times

5-6 times

7-8 times

9-10 times

More than 10

NA/No Response

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…

Crossborder Consumer Tastes

Not dissimilar from US-Residing

Borderland consumers re: store

preferences & brand demands

Some of these preferences

shaped by strong social ties

across borders

Opportunity to reach and shape

preferences through crossborder

family & social networks

…and use Borderlands for

“nearshore” product testing and

product roll-outs

Most Preferred Stores in SD

127

72

52

31

24

19

14

14

12

11

10

8

8

8

7

7

4

4

4

4

4

0 50 100 150

WalMart

Target

CostCo

Ross

Home Depot

Sears

Swap Meet

JC Penny

Vons

Kmart

Payless

Macy's

Food4Less

Albertsons

Sams

Mervyns

Ralphs

Old Navy

"Las Americas"

Nike

BestBuy

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)

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)

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!

Gracias!

&

Thank You!

CrossborderBusiness.com

1-888-4XBORDER