Mexico has long been one of Wisconsin’s top trade partners. In fact, exports from Wisconsin businesses to Mexico increased by 2.7 percent in 2016 despite a slight downturn nationally. The Wisconsin Economic Development Corporation’s (WEDC's) International Business Director, Mark Rhoda-Reis, offers insight into the export process.
Q: Are there any customs/cultural differences businesses should be aware of before beginning to export to Mexico? If so, what are they?
A: While there are many cultural differences and nuances, the most important difference for people doing business in Mexico, and much of Latin America, is the need to first develop a relationship with your customer whether they are a distributor, dealer or end-user customer. In the U.S., we may buy based on information provided and product tests, but in Mexico you first need to develop a level of trust before your product features and technical information will be received.
Q: What is your biggest piece of advice for companies just starting their exporting programs in Mexico?
A: Mexico is an ideal market for emerging exporters. The most important piece of advice is to first understand the market: customers, competitors, collaborators, influencers, most effective business model, regulatory requirements, labeling and the need for any product modifications. With this information and knowledge, a company can best understand who their partner or customer should be. The WEDC market assessment and partner search services, as well as the ExporTech® program, are ideal ways to gain that understanding.
Q: Would that advice change for experienced exporters?
A: The advice for emerging exporters is also valid for the experienced. Often companies build a new market organically and gain their understanding through their existing partners, which may not provide a 360-degree view of the market. A full understanding of the key elements for selling their products in the market is critical to achieve or sustain success. Often, experienced exporters will request a market assessment once they have experienced a decline in their sales or when they attempt to enter a different industry segment or geography. Continuing to nurture the relationships developed and regularly visiting the customers are also areas that some experienced exporters neglect, usually resulting in lost momentum. Finally, the high cost of credit, especially in Mexico, often necessitates offering credit terms, especially when selling to distributors and dealers stocking their products.
Q: What is the biggest myth about doing business in Mexico? What is the reality?
A: Common myths:
- Buyers are less sophisticated and only care about the lowest price.
- Local competitors are less capable than their U.S. counterparts.
- The internet has helped a much larger number of Mexican consumers and industrial buyers understand English, and has provided access to information on all products and services. Price is an extremely important element; showing the value of a product or system and the total cost will overcome low-price competition. Remember the importance of building and maintaining relationships.
- There has been great advancement in the capabilities of local Mexican manufacturers. And with the large number of free trade agreements, quality products from Europe, Asia and Latin America are competing with U.S. products.