Fresh Perspectives
Director, Mexico Business, Senior Consultant Hispanic Practice
Maria Flores Letelier is a Senior Consultant and directs Cheskin's Mexico Business. She is a leader in the area of consumer research for the sake of innovation, service design, and word of mouth marketing. She has developed tools and techniques with Bob Calder, Kellstadt Professor of Marketing at the J.L Kellogg Graduate of Management, that are now taught at the J.L. Kellogg Graduate School of Management. Her experience covers a range of industries including media (Time Warner, San Francisco Chronicle, and Telemundo); finance (American Century Investments, BBVB/Bancomer, Banco Santander Central Hispano, and manufacturing (cement and construction materials). She has developed a particular expertise on working with companies to understand Latino markets in both the US and in Mexico.
27 January 2006
When Mexican treasury officials released the numbers on how much money passed through the US to Mexico in the form of remittance in 2004, companies began to pay attention to the cross-border opportunity. The $16.6 Billion figure was enough to draw people’s attention, second to Mexico’s oil income and accounting for 2% of Mexico’s GDP. But what was even more astounding was the 33% increase compared with the previous year. The question several companies have asked us is obvious: how can we get a piece of that income? The leading companies in financial services have quickly understood that money transfers will become commoditized as price competition increases, and as senders learn that they can simply send an ATM card to receivers in Mexico. Some banks, led by Bank of America, have tried to entice customers by offering free remittance if they open a checking or savings account with the rational that they will be able to cross-sell higher margin products later. Still, for the most part, financial service firms are finding it difficult to cross-sell. In fact, wire transfers make up 70% of the mechanism for sending money. Other financial service companies, such as HSBC, are starting pilots with Mexican mortgage providers to offer peso denominated mortgages for homes in Mexico. Looking at the numbers alone, companies tend to assume that there must be a large opportunity if they move fast. But when pilots take along time to show results, or when revenue expectations are not met, companies are stifled about how to address the cross border opportunity. The question changes into a more interesting one: What is the next generation of offerings for cross-border offerings that offer a significant opportunity for companies?
Our experience with the Hispanic market in the U.S. and Mexico shows that the opportunity can only be adequately measured if the offering is well articulated as one that will truly add value beyond transactional value. Offerings that add value are those that set lower income consumers on a productive path to wealth building rather than simply accelerate the use of money (credit only) or offer convenience.
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Hispanic Markets
by Maria Flores Letelier
10 January 2006
This blog takes up a second element of cultural innovation. Previously, I wrote about thematizing an ad hoc practice so as to re-articulate it for consumers. A second important element is intensifying a bridge practices, i.e. identifying what makes the practice reduce or resolve a tension and designing attributes that will intensify the mechanism. Indeed, when designing offerings around cultural practices, it is necessary to "intensify" the mechanisms that allow the practices to resolve tensions for customers. No matter how familiar transformed bridge practices are, the rigor with which they are focused on the announced goal will be disorienting and thereby stimulate some fleeing behavior. Consequently, the offer designer has to intensify the sanctioning mechanism in the traditional practice, and shape the new offer so that the sanctioning power is both familiar but stronger than is customary.
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Hispanic Markets
by Maria Flores Letelier
15 December 2005
This blog is a different take on an article I co-authored and published in 2003 in the California Management Review, called “Developing Productive Customer in Emerging Markets”. The theme here is one of identifying ad hoc cultural bridge practices that produce economic value and at the same time bridge a value that customers feel are in conflict. In my work with lower income markets, identifying practices that people invent in order to resolve their own tensions, or conflicts that they experience as in tension, is core to designing offerings. I will refer to the same examples covered in that article: The Grameen Bank and CEMEX's Patrimonio Hoy.
Designing a new offering that will provide a qualitative difference in the customer’s life amounts to transforming those practices into a system around the core product. Such transformation involves thematizing the goal of these practices, intensifying their sanctioning mechanism, and institutionalizing them as part of a regular business offering. Thematizing means identifying the goal the business will set for these practices, the productive behavior it will enhance, and then organizing the practices to achieve that goal. Intensifying the sanctioning process means identifying what social mechanisms make people responsible and bringing them to greater prominence, even formalizing them into rules with duties and damages to be paid if they are broken. Institutionalizing means designing a structure for delivering the offer that primarily identifies the promises the business will make, the role the customer will play in regard to the business, and the market category of the business. In short, institutionalization means designing the channel. In this blog, I will start by discussing thematization. I will discuss the others in upcoming blogs.
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Hispanic Markets
by Maria Flores Letelier
6 September 2005
In helping companies enter emerging markets, the first task at hand is to work with senior managers to debunk common myths or to question their own assumptions regarding consumers in these economies. Most of these myths are related to communicating price and accessibility of a product. Here, I discuss two of the most common examples. 1) The assumption that "cheap" price should be communicated as loudly as possible and 2) The assumption that industrial packaging is obviously better than sophisticated imaging.
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Hispanic Markets
by Maria Flores Letelier
22 June 2005
At the 6th annual Hispanic Boom conference in Los Angeles on June 13th and 14th, the theme of biculturalism emerged as a dominant theme among panelists and speakers. The theme of Cheskin's panel was “Cross Border Strategies” . While no one else talked about this theme explicitly, most of the panelists did point to the phenomena of cross-cultural identities when discussing the growing importance of biculturalism. Most talked about the importance of the growth in the youth segment and how these younger Hispanics are cultivating bicultural identities. We learned that biculturalism has implications for media viewing activities, as bicultural Hispanics will tend to view both mainstream media and those geared to Hispanics. So we learned that Hispanics over index on going to the movies and on renting DVD’s. (12 times per year vs. 8 times per year, and 18.4 times per year vs. 16.5 time per year, respectively.) All speakers acknowledged that today, language is not the only tool to consider when targeting Hispanics, especially with the growth of the bicultural population. Overall, however, people are still trying to grasp what we mean by cultivating a bicultural identity, and the implications for businesses in targeting the Hispanic market.
The term “cultivating” is key when talking about biculturalism. Unlike Hispanic Dominants and US Dominant Hispanics, bicultural Hispanics have actively determined that they seek to cultivate Latino culture as part of their identity. In other words, choosing to speak Spanish, travel to Latin American, have Hispanic friends, listen to Latin music, admire Hispanic leaders and artists, are all actions that one must consciously make as one goes about living a US committed life with US customs and practices. Hence one must make room for these new practices, ask questions to relatives and friends about the meaning of certain products, such as food and music, rather than passively consumer these. Being bicultural implies having a “cross-cultural identity”; bicultural folks can actively appropriate different sets of values and practices from each culture. What it means to have a “cross-cultural identity”, however, is still an area that requires much investigation. Some folks believe that Hispanics will eventually assimilate as, presumably, have other cultures. Italians are often the example cited as a culture that “assimilated”. I propose three points to consider in this discussion.
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Hispanic Markets
by Maria Flores Letelier
14 April 2005
There has been much interest in capturing the billions of consumers in emerging markets in recent years. A commonly cited statistic is that there are 4 billion people making less than US$1500 per year worldwide.
The “bottom of the pyramid” appears to offer great potential for market expansion for many companies. In Mexico, there are 45 million earning less than $200/month. Of the over 35 million Latinos in the US, at least 10 million are underserved. Of those that are banked in the US, many have one checking account with less than $500 average balances.
The current thinking takes into account more than just the pure size of the market; many leading experts have pointed out that disposable income among the poor is the same as that of middle income segments.
After many years of helping companies penetrate transitional markets, I am convinced that the opportunities are huge. However, there are some serious differences that must be considered, as well as some common sense myths that must be dispelled.
The most common challenge I have witnessed for companies is to assume that customers in emerging economies have practices for being customers. To be a customer assumes an ability to enter into a transactional exchange where the terms of engagement are clear for both sides of the agents in a transaction. A common mistake for companies is to try to sell their products to the local distribution channels, small mom and pop shops often operated out of someone’s living room, and assume that these entrepreneurs desire to grow their business and accumulate wealth as a matter of fact. On the consumer side, the same mistake is made. Companies assume it to be obvious that a consumer will want to “consolidate debt” or receive discounts for bulk purchases. The assumption is that all human beings behave according to the principle of rational optimization of personal utility. The problem is that this principle assumes that someone lives in a transactional world with transactional practices, as modern customers do. It assumes that people understand what it means to be a modern day customer.
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Etcetera
| Hispanic Markets
by Maria Flores Letelier
27 March 2005
A question that many executives ask is whether they should really divide up a market. Does it really make sense to cut a market into parts? Isn’t segmentation really a last resort, a strategy for those small players trying to grab a niche in the market? Some executives will grant that understanding your general demographic or industry grouping is important, but segmenting beyond basic demographic variables is a luxury. I am often asked these questions with respect to one macro-group; namely, the Hispanic market. First, why even consider this demographic group as a segment in and of itself? Can’t the same messaging and products work with this group as with everyone else? Further, why worry about dividing this group up further in terms of levels of acculturation and understanding these differences? This is a large topic that must be considered carefully. Here I offer some brief notes as a way provoke thought and begin to simplify the fuzzy notion of segmentation.
It does indeed make sense to try to target the largest amount of folks as possible. A quality marketing consultant will not advise a client to segment for the sake of segmenting alone. When it comes to understanding segments, we are talking about understanding people in a larger cultural space. No one can deny that we all appropiate the cultural style of the moment in a different way. Still, an innovative, meaningful positioning will strike a chord with something that is happening in the culture at large, a cultural inflection of style that will affect many people at some point. Coke is often upheld as an example of a star brand that never really needed to segment its market. Coke’s famous, “The Pause That Refreshes” campaign articulated the cultural style inflection that was taking place at the start of the 20th century. The industrial revolution had established a dominant culture of economic duties and hard work. The idea that one could take a break, a pause, within the work day was a new inflection in the cultural style of the time. Coca Cola has continued to tune into changes in cultural style inflections that take place decade after decade, as it did in the 1970’s with the shift from progress to nature; “Things Go Better With Coke”.
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Methods & Techniques
by Maria Flores Letelier, 0 comments
24 January 2005
In the recent December Holidays, I spent my first Christmas and New Years in Mexico. I witnessed many "Posadas" during the Holiday season, with lots of parties and festivities. But I also noticed the crowded highways with the influx of people who had arrived from the U.S. to their home towns, and then later, the highways were filled with those that were leaving. During this time, the average # of people crossing each border line went up from 300 per day to 700 per day.
I learned of entire towns that come to life during these Holiday seasons. Towns, such as General Treviño, with a population of 3500, are almost entirely dependent on the U.S. immigrant for thier existence. Out of the 3500 in the town, 2000 work in the United States. According to the loyal mayor, Raquel Villareal, the workers in the U.S. not only support their local families, but they also play an important role as social citizens, donating money for parks and school buses. Doctor Aroyo, another small town in the south of the northern state of Nueveo Leon, with an aging population and little infrastructure, continues to exist only because of the US$400,000 the town receives in remittance each week. In the town of Los Ramones, 120 residents from Orsi, California purchased a $20,00 school bus for local town residents. (www.Elnorte.com). Many of these residents are are second and third generation U.S. Mexican Hispanics.
Many companies ask us whether the U.S. Hispanic market will one day become 100% assimilated. With the cross-border relationships, immigrants who have financial and familial commitments on both sides of the border, it is clear that Cross-border lives are an ongoing reality. In our ethnographic research, we have learned of several families where the kids will choose which side they want to live in for different periods of time. There are many instances where some kids will choose to be in the U.S. with one parent, and the other kids stay in Mexico with grandparents or another parent. In the end, where those kids marry and who they marry plays a crucial role in which culture they make dominant in their lives. No one can predict the future of love and marriages. What we can be sure about, however, is that cross-border lives will continue to exist for some time, and this phenomena presents all kinds of opportunties for new products and services.
Posted in
Hispanic Markets
by Maria Flores Letelier, 1 comments
12 January 2005
There is an ongoing conversation we at Cheskin have with our clients regarding whether or bilingual documents should be used in marketing materials or in contractual documents with the Hispanic market. Both cases are very different and require different approaches. Taking the first case only, our collective experience at Cheskin is that bilingual marketing documents are appropriate for various reasons. Those Hispanics that prefer Spanish as their dominant language express that they feel that they are being taken into account when they receive marketing material that include Spanish language. They also like the English language material as it helps them learn English, especially the technical terms. In addition, Hispanics are aware that it is the English language document that delivers the real promise. Therefore they believe that the English language makes the document more legitimate. The legitimacy brings with it an emotional benefit; namely, respondents describe a feeling like part of the U.S. when they receive these documents in the mail, for example. This latter benefit is more difficult for respondents to describe; being in the US is aspiration, it is part of improving one’s life situation. Once a person commits to staying in the U.S., learning the “lingo” and standard practices becomes crucial. This is especially the case for financial or health related issues, where understanding the U.S. technical jargon can be even more important than learning all other aspects of the language at first.
Clients ask about execution of bilingual documents. Should they translate each line one at a time, should they have bilingual pages side by side or back page/front page, or should they deliver a booklet or brochure in Spanish and another in English? Having recently asked Cheskin’s intercultural team this question, we all collectively agree that the second option is best. The second option allows people to understand one concept at a time, and learn the technical distinctions as full concepts. Below are some responses from various team members.
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Hispanic Markets
by Maria Flores Letelier, 0 comments
19 July 2004
This blog is taken from my travel journal on my trip through small towns near rural areas in Mexico in the last two weeks. Last week, I covered Matahuala. This week, I went to Atlixco near the city of Puebla, a beautiful town near a Volcano called El Popo. Unlike Matahuala, Atlixco is not in the Northern regions. Still, the US is becoming an increasingly meaningful part of their lives. El Otro Lado, for the folks of Atlixco, is Queens, New York. Like Matahuala, I learned of interesting US influences, such as Italian Pizzeria’s that folks open in these small towns that apparently are so tasty, using the local anejo queso panela (aged panela cheese), that Domino’s has not been able to penetrate these regions. (These regions are known for their quality agriculture and unique cuisine, such as Mole Poblano, and Pipian, and Memelitas. Standard grocery stores have not fared well in these regions, as everyone shops at the Tuesday and Saturdays Mercado where farmers will come from all regions to buy and sell goods. See pictures below. Note woman selling goods, while holding a Pepsi bottle in her hand. ) But mostly, I learned of the entrepreneurial drive that some of the people return with when they return from the US, a standard that is set for everyone else. I spoke with young men who dreamed of opening up Deli’s, like the ones in Queens, NY. I also spoke to young men who now noticed that some thing is not working, that something has to change. They have been to the US with others, suffering in a small room to make a few dollars. They barely eat while there, as their mother taught them, el que sufre, merece (those that suffer will later deserve). Yet the people return, and as one kind gentlemen told me, spend all of their money on a part, remain drunk for literally one month, and then find themselves starting all over again. He has now divided his world up between those that have the entrepreneurial drive to start Delis and those that party for one month.
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Posted in
Hispanic Markets
by Maria Flores Letelier
12 July 2004
In the last week, I was out in field exploring the customs of those who live in the small town of Matahuala in Mexico. I discovered that folks residing there live with the US as a constant part of their lives, emotionally and financially. What they call, “El Otro Lado” or the Other Side is embedded in the daily life of This Side. The US Mexican Hispanic market is also in Mexico. The relationship is co-dependent.
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Hispanic Markets
by Maria Flores Letelier, 1 comments
6 May 2004
In my 11 years or so of helping clients understand and market to the Hispanic market, both in the US and in Mexico, I have encountered some overarching background values that appear to come into tension for immigrants of Hispanic origin. By background values I am referring to those values that drive behavior, but that respondents cannot readily describe in explicit. The contemporary philosopher Charles Taylor calls such values orienting evaluations. Many philosophers, including Heidegger, Nietche, and Kierkegard have revealed how it is possible for these background values to come into conflict as people enter new life stages and as their historical, social contexts shifts. In the case of people of Hispanic origin, the immersion into a culture with a different set of background values leads to an experience of tensions in values that is even more pronounced. I wish to share the larger, overarching tensions in values that guide much of my interpretation of the market.
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Hispanic Markets
by Maria Flores Letelier, 0 comments
23 April 2004
Every so often, people in the valley start to talk about a new buzzword. Lately, social networking has been the buzzword. The growth and prevalence of social networking sites, such as Friendster and Linkedin, Orkut, and Tribe is generating serious curiosity from many folks in the business community. But are we all talking about the same things? And where does the newness lay? In using the online medium to meet others for business, to date, or in the use of these particular sites? Why does the business community care so much about the phenomena?
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Posted in
Etcetera
by Maria Flores Letelier, 1 comments
5 April 2004
A new kind of business is emerging that bridges the gap between the conventional realms of commerce and government. These new businesses are profitable and gaining a strategic advantage in the critically important markets of the future. At the same time, they are engaged in effective and caring development activity, the sort normally reserved for development banks, NGOs, and government programs.
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by Maria Flores Letelier, 0 comments
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