JWT AnxietyIndex: Mexico (January 2010)

ANXIETYINDEXMEXICO

JANUARY 2010

AGENDABackground ..............................................................................................................3

Methodology ............................................................................................................5

Executive Summary ..............................................................................................6

What’s making people anxious today? ......................................................11

A closer look at Mexico....................................................................................22

The recession’s impact on Mexico vs. other countries ..................................23The recession’s impact on lifestyle ................................................................26Media and the recession ................................................................................35Shopping behavior and the recession ............................................................41Looking to the future: The next generation ....................................................44

Brand Opportunities ..........................................................................................47

2

BACKGROUNDThe JWT AnxietyIndex was launched in February 2003 during the run-upto the war in Iraq.

It tracks the level and intensity of consumer anxiety and the drivers ofthat anxiety. It examines safety and security concerns—the threat ofterrorism, potential and current military hostilities, crime—as well aseconomic worries, such as the cost of health care, the cost of living andjob security.

The AnxietyIndex is also designed to discover consumer insights that willhelp marketers formulate strategies during times of high or low anxiety.

3

4

10.0

5.0

0.0

-5.0

-10.0

JWT launched the baseline study for AnxietyIndex in Mexico in 2010.

Following the global economic downturn, forecasts predict a recession for Mexico in 2010.

Source: CIA World Fact Book

2003 2004 2005 2006 2007 2008 2009 2010(est.)

% Change

1.0 1.3

4.1 3.04.8

1.3

-6.5

Mexico - GDP Percent Change

BACKGROUND (cont’d.)

3.2

METHODOLOGY Quantitative survey conducted by JWT SONARTM, our proprietary onlineresearch tool

Data collected January 2010

296 adults aged 18-59, living in Mexico

Data weighted by age and gender

5

EXECUTIVE SUMMARY

6

EXECUTIVESUMMARYMexico is one of the most anxious countries in the world.

Instability is part of the cultural code. This is primarily due to two factors:

Anthropologically, Mexico has faced violent change: the disappearance ofindigenous Aztec and Mayan culture, three invasions and numerousrevolutions.

Economically, there is a long history of frequent crisis. In the last 40 years,Mexicans have struggled through at least four major economic crises andvarious smaller recessions.

7

EXECUTIVESUMMARY (cont’d.)

The primary drivers of anxiety are the economic situation, the escalationof violence and crime, and the stagnant job market. Feeling that they livein permanent instability, people are pessimistic about the future.

Mexicans’ frustration and pessimism are exacerbated by the beliefs thatthe political class is detached from the country’s reality, that the currentgovernment is one of the most corrupt and that people are being treatedunjustly.

8


A majority say they have been cutting back on spending—specifically,doing less shopping, eating out and going to bars/clubs.

For Mexicans, home is a safe haven:

59 percent say they are spending more time at home.

People are both cautious about spending money and anxious about theirpersonal security.

For almost half of respondents, the crisis has led to greater closenesswith friends and family.

9


Fear for the future is more prevalent than anxiety about the present. Theprevalent anxieties about the future are:

The employment situation my children will face when grown up

Affording a good education for my children

Having enough money for a comfortable old age

10

WHAT’S MAKING PEOPLEANXIOUS TODAY?

11

12

Overall anxiety levels in Mexico are high—among the highest in the world ...

Overall, given everything that is going on in the world, the country, and your family’s life,how nervous or anxious would you say you currently are?

100

90

80

70

60

50

40

30

20

10

0

% Nervous/Anxious % Not Nervous/Anxious

Japan Russia Saudi ArgentinaMexico UAE India U.S. Spain Brazil U.K. AustraliaColombiaCanada France ChinaArabia

10

90

16

84

18

82

21

79

22

78

22

78

26

74

28

72

30

70

34

66

35

65

41

59

42

58

45

55

58

42

65

35

Brazil: January 2009India, China: April-May 2009

Russia, Spain, Japan: March 2009U.S., U.K., Canada, Australia, France: September 2009

Saudi Arabia, UAE: October 2009Argentina, Colombia, Mexico: January 2010

... with one in five saying they are “very anxious.”

Overall, given everything that is going on in the world, the country, and your family’s life,how nervous or anxious would you say you currently are?

50

40

30

20

10

0

% Very Nervous/Anxious

Russia India Saudi UAE Argentina Japan Mexico Brazil U.S. Spain France U.K. Australia CanadaColombia ChinaArabia

3830

28 26 25 25 21 18 16 12 10 9 8 8 7 6

Brazil: January 2009India, China: April-May 2009

Russia, Spain, Japan: March 2009U.S., U.K., Canada, Australia, France: September 2009

Saudi Arabia, UAE: October 2009Argentina, Colombia, Mexico: January 2010

13

ANXIETYINDEX MAP

SAFETY/SECURITY ECONOMIC

SAFETY/SECURITY ECONOMIC

FURTHERFROM

“HOME”

CLOSERTO

“HOME”

FURTHER FROM

“HOME”

CLOSERTO

“HOME”

Political Leadership

State of Economy

Cost of Health Care

Cost of Living Current MilitaryHostilities

Potential MilitaryHostilities

Crime Job Security

Threat ofTerrorism

900

600

300

0

14


State of Economy

Cost of Health Care



Crime Job Security

Threat ofTerrorism

1000

900

800

700

600

500

400

300

200

100

0

496

72

76

153

79

819

253

349475

AnxietyIndex: % who are nervous or anxious/% who are not

15

Mexicans are most concerned about the overalleconomy, crime, the cost of living and job security.

Mexico

Global average


State of Economy

Cost of Health Care



Crime Job Security

Threat ofTerrorism

1000

900

800

700

600

500

400

300

200

100

0

496

76

79

15372

819

253

349475


16

Anxiety over the economy and jobs is pronounced even compared with the other

LATAM markets we studied.

*Brazil, Argentina, Colombia, Mexico

Mexico

LATAM*average

17

Quality ofProducts Imported

from China

The War in Afghanistan

The Housing Market

The War in Iraq

Gasoline Prices

Unemployment RatesThe Government’sBudget Deficit

The Stock Market

The Stateof the

National Infrastructure

Impact of Global Warming

Safety of the Food Supply

Bank Failures

Food Prices

Natural Disasters

800

600

400

200

0

55

657

14385

215

783

92312

417

138

224

198

21954


On specific drivers of anxiety, Mexicans stand out for theirconcern over the basics: food and jobs. But they also

demonstrate a conscience, worrying about global warming.

Mexico

Global average


18

Even compared to their LATAM neighbors,Mexicans are much more worried about food

prices and unemployment.

*Brazil, Argentina, Colombia, Mexico

The War in Afghanistan

The Housing Market

The War in Iraq

Gasoline Prices

Unemployment Rates

The Government’sBudget Deficit

The Stock MarketThe State of theNational Infrastructure

Impact of Global Warming

Corruption

Quality ofProducts Imported

from China

Safety of the Food Supply

Bank Failures

Food Prices

Natural Disasters

800

600

400

200

0

34

657

14385

215

783

56 139

478

417

138

224

198

21933

Mexico

LATAM* average

And over the next six months, do you expect that each of the following will get better, stay the same or get worse?

% who expect it will get “better” minus % who expect it will get “worse” in the next six months

In general, Mexicans are very pessimistic about the prospect of positive near-term change ...

19

Safety of the food supply

The housing market

The stock market

Bank failures

Unemployment rates

Gasoline prices

Food prices

The government’s budget deficit

-50-27

-72-34

-70

WORSE BETTER

-3

-22

-35

1

2

1

MexicoGlobal average

More optimistic

More pessimistic

-50-29

-17

-24

-23

20

... with most clearly feeling the effects of the economic downturn.

1 2 3 4 5 6 7 8 9 10Haven’t Have

impacted impactedme at all me a great

deal

Intensity of Personal Impact from Tough Economic Times

No Impact Great Impact

9

6823

%

On a scale of 1-10, where 1 means tough economic times haven’t impacted me personally at all and 10 means tough economictimes have impacted me personally a great deal, how would you rate yourself?

21

Though many feel they escaped the worst of it,faring better than the country as a whole.

1 2 3 4 5 6 7 8 9 10Haven’t Have

impacted impactedme at all me a great

deal

Intensity of Impact from Tough Economic Times

No Impact Great Impact

68

%

How would you rate the impact of the recession on your country?

87Impact on me =

Impact on Mexico =Impact on MexicoImpact on Me

22

A CLOSER LOOK AT MEXICO

23

THE RECESSION’SIMPACT ON MEXICOVS. OTHER COUNTRIES

Many think Mexico has suffered more from therecession than other countries in the region ...

Thinking about the effect of the global economic downturn on your country, do you think your country has been affected more,less, or about the same compared to other Latin American countries?

24

Impact of Recession on Mexico vs. Other Latin American Countries

70

60

50

40

30

20

10

0

45

5

50

My country has been My country has been My country has been LESSMORE affected than other affected ABOUT THE SAME affected than other LatinLatin American countries as other Latin American countries American countries

%

... and most feel Mexico has suffered more compared with wealthier countries.

25Thinking about the effect of the global economic downturn on your country, do you think your country has been affected

more, less, or about the same compared to richer countries?

Impact of Recession on Mexico vs. Richer Countries

80

70

60

50

40

30

20

10

0

73

23

My country has been My country has been My country has been LESSMORE affected than affected ABOUT THE SAME affected than

richer countries as richer countries richer countries%

4

26

THE RECESSION’S IMPACT ON LIFESTYLE

Mexicans consider ivory-tower politicians,corruption, class inequalities and crime

as the primary social impacts of the recession.

How much do you agree or disagree with each of the following statements?

27

% who agree

Politicians in my country are out of touch withhow the average person is being affected by the

global economic downturn

Government corruption in my country is as badas it has ever been

My social class is being dealt an unfair blowbecause of this global economic downturn

I worry that the global economic downturn iswidening the economic gap between the rich

and the poor in my country

I’m worried that crime in my neighborhood willincrease as people fall on hard times

I have started to notice that the values in mycountry have changed a bit as a result of the

global economic downturn

The economic crisis has brought me closer tomy friends and family

The economic crisis has distanced me from myfriends and family

91

88

88

85

83

75

45

39%

Behavior-wise, people are going out less and are retrenching to their homes ...

Some people have told us that recently they have made some changes in how they are spending their time.Looking at the list of activities below, are you doing each more often, less often, or

about the same amount as you did before the global economic downturn?

28

Going to concerts/theatre

Going out to the movies

Going out to clubs, bars

Going out to eat

Going out shopping

Going out to parties/events

Spending time at home

2

8315

4

7125

2

8018

2

6830

3

7126

3

6037

59

1426

MoreSameLess

Changes in Social Behavior as a Result of the Economic Downturn

%

Going to concerts/theatre

Going out to the movies

Going out to clubs, bars

Going out to eat

Going out shopping

Going out to parties/events

... especially women.

8879

29

% Doing Activity LESS by Gender

7665

8772

7560

8160

6653 Women

Men

Some people have told us that recently they have made some changes in how they are spending their time.Looking at the list of activities below, are you doing each more often, less often, or

about the same amount as you did before the global economic downturn?

%

To cut back on spending

I want to spend more time with my family

There seems to be less going on (parties,concerts, etc.)

Because most of my friends are

I improved my home entertainment/bought newitems for home entertainment

Because of crime in my neighborhood

As one might expect, people are spending more time at home primarily to cut back on spending.

You mentioned that you have been spending more time at home recently.What are the reasons you have been spending more time at home?

86

30

Why People Are Spending MORE Time at Home

29

22

16

3

20

%

Crime is a significant driver of anxiety ...

Now, we’d like to talk to you about crime in your neighborhood.How concerned are you about crime in your neighborhood?

31

60

50

40

30

20

10

0

40 41

16

3

Very Somewhat Not very Not at allconcerned concerned concerned concerned

81

19

How concerned are you about crime in your neighborhood?

%

... and it appears to be tied to the downturn, asanxiety related to crime has risen for many ...

Thinking about the past year, has your concern about crime in your neighborhood increased, decreased, or stayed the same?

32

%

Increased Stayed the Same Decreased

80

70

60

50

40

30

20

10

0

52

How has your concern about crime changed over the past year?

5

43

80

70

60

50

40

30

20

10

0

... impacting the daily lives of about half of Mexicans, especially women.

Have you changed your routine at all due to your concern about crime in your neighborhood?

4656

Yes No

33

5444

WomenMen

%

Has your routine changed due to concerns about crime?

Not wearing certain pieces of clothing oraccessories so I don’t attract attention

Going out less often than I used to

Not going out at night

Choosing to shop in different areas/stores

Buying fewer luxury items

Making sure that when I am out, I am not alone

Choosing different methods of transportation

Entertaining myself and friends at home so Idon’t have to go out as much

Those who have changed their routine have adopted coping mechanisms impacting various areas

of their lives, from showing less bling to going outless to shopping in different places.

And how or what have you changed?

7273

7454

6656

5164

5353

5739

3357

1813

34

Has your routine changed due to concerns about crime?

Among those who have changed their routine due to concerns about crime%

WomenMen

35

MEDIA AND THE RECESSION

As in most markets, people understand the downturn as much as it affects them but don’t

possess an in-depth understanding.

How much would you say you know about the global economic downturn?

36

60

50

40

30

20

10

0

6

4350

1I know a lot I know a fair I’ve heard of it, I’ve never

about it amount about it but that’s about it heard of it

Knowledge of the Global Economic Downturn

%

Mexicans get their news through several sources, primarily TV and the Web ...

About how often, if at all, do you get your current news and information from each of the following?

37

100

90

80

70

60

50

40

30

20

10

0

8376

5747

TV Online Radio Newspaper

% of people who use source for news at least once a day

%

... which have been a source of information about the downturn.

Have you watched/read/heard reports about the global economic downturn from your usual news and information sources?

38

100

90

80

70

60

50

40

30

20

10

0

9082

Yes No

1018

WomenMen

% of people who saw news about the downturn through their usual news and information sources

%

Most Mexicans feel the media has covered thedownturn in the right proportion ...

And do you think the media has been giving reports about the global economic downturn too much, too little,or just enough coverage?

39

%

Too Little Right Amount Too Much

80

70

60

50

40

30

20

10

0

15

Has the media coverage of the downturn been ...?

13

54

... although a majority are unaware that LATAM is expected to enter a recession this year.

Are you aware of the recent reports that Latin America will enter a recession in 2010?

40

%

Yes No

80

70

60

50

40

30

20

10

0

60

Awareness of reports that Latin America will enter a recession in 2010

40

41

SHOPPING BEHAVIORAND THE RECESSION

Paying closer attention to prices while I’m shopping

More actively looking for items on sale

Buying only when I am close to running out of something

Doing more comparison shopping to make sure I get the best price

Shopping more at discount or less expensive stores

Switching to lower priced brands

Buying more store brands/private label brands

Buying smaller amounts of items, more often

Using more coupons

Buying more in bulk

I haven’t changed my spending habits as a result of the recession

In the past year, most people have changed theirbehavior in response to the global downturn—though

these steps are more passive than active ...

Now, we would like to talk to you about your shopping over the past year. Please take a moment and think about how yourspending habits have or have not changed over the past year when it comes to what you buy for your household (i.e., groceries,

supplies, etc.). Which of the following, if any, have you begun to do as a result of the global economic downturn?

78

77

72

71

62

51

44

22

19

6

42

Actions taken as a result of the global downturn

5

%

... and defensive recessionary behavior seems yet to have gripped many Mexicans.


43

% who agree strongly

I have started to cut back on things I don’t need

I worry that because of the global economic downturnI won’t be able to keep up the lifestyle I am used to

I worry that because of the global economic downturnI won’t be able to attain the lifestyle I want

I haven’t personally felt the effects of the recessionbut have modified my spending habits just in case

I have noticed my friends have cut back in their spending habits

The recession hasn’t really changed what I do in my everyday life

55

43

37

16

12

11

%

LOOKING TO THE FUTURE:THE NEXT GENERATION

44

And while many Mexicans are anxious today, evenmore are anxious about the world their children and

their children’s children will inherit ...

Given everything that is going on in the world, the country, and your family’s life, how nervous or anxious would you say you areabout the world your child(ren) or grandchildren will inherit?

45

100

90

80

70

60

50

40

30

20

10

0

7888

21

48

Anxious about Anxious about Very Anxious Very Anxious aboutthemselves their children/ about themselves their children/

grandchildren grandchildren

% of people anxious about themselves vs. anxious about the future for their children/grandchildren

% Among those who have children

... which tends to manifest in financial concerns.


46

% agreeing strongly or somewhat

I worry about the effect this economy will have on theability of my child(ren) to find a good job

I worry about my ability to afford the type of educationI’d like for my child(ren)

I worry about my retirement funds and that I maysomeday have to rely on my child(ren) for help

This is a good lesson for my child(ren) about living within your means

I’ve lived through recessions before, and so did myparents—my child(ren) will be just fine

The schools are doing a good job of teaching mychild(ren) about the recession

90

86

79

64

45

31

% Among those who have children

BRAND OPPORTUNITIES

47

BRAND OPPORTUNITIESMexican brands have several opportunities to connect with anxiousconsumers:

Speaking in a value voice. This can comfort people, with the brand actingas a singular source of fairness and empathy.

Linking with symbols of stability and permanence. This can help brandsconnect with consumers who are struggling with instability, disappointmentand confusion.

Example: An HSBC Mexico spot was developed to increase a perception of solidity,exploring the simple idea that union and solidarity are the best way to confrontuncertainty and threat.

48

BRAND OPPORTUNITIES (cont’d.)

Mexican brands have several opportunities to connect with anxiousconsumers (cont’d.):

Helping to restore a sense of control for the consumer.Example: A Ford Focus commercial dramatizes a test drive as a getaway chase. Withconsumers anxious about their helplessness in an increasingly violent and hostileenvironment, this spot empowers them by suspending the perception that they’re atthe mercy of an “oppressive” world. With the Focus they can escape it and takecontrol.

49

BRAND OPPORTUNITIES (cont’d.)

Family togetherness is still high valued, as it’s one of the most importantsymbols of stability. Dramatize the house as a haven from a hostile andthreatening world:

A Telmex “triple play” campaign shows a modern middle-class family with ademocratic dynamic among its members and a dog who symbolizesstability.

La Lechera’s strategy focuses on strengthening family bonds andsweetening relationships between household members.

A promotion from the chocolate brand Abuelita empathized with the needto connect, giving people a chance to win tickets that would allowexpatriated family members to be reunited with their families in Mexico.

50

THANK YOU

Alexandra SuarezMarket Research Director

JWT Latin America

[email protected]

www.AnxietyIndex.com

Mark TrussDirector of Brand Intelligence

JWT Worldwide

[email protected]

(c) 2010 J. Walter Thompson Company. All Rights Reserved.

Ann M. MackDirector of Trendspotting

JWT Worldwide

[email protected]

Business

JWT AnxietyIndex: Mexico (January 2010)