2009 Market Realities,

Sales & Distribution

Advice for Mexico
Vince Lencioni
LGA Consulting, General Manager
April 2009
 Four Part Presentation
 I . Mexican Market & Import Dynamic

 II. Channel Options & Related Technical

Trade Issues

 III. Retail, Gov´t & B2B Sales Dynamic

 IV. LGA Consulting & SDL Consulting

Services
 I. Mexican Market
and Import Dynamic
 Mexican Regions and Cities
I. Regions – Industrial/Business Style Dynamic
1. North (Monterrey & US border) – 29% GDP
2. Central (Mexico City, Guadalajara, Bajio) - 52% GDP
3. South (Tourism, oil, least urbanized areas) – 19% GDP

II. Major Cities

1. Mexico City: 20 milion+; 31% (40%) GDP; “NY/CHI/LA”
2. Monterrey: 3.8 million+, 7.5% GDP; “Barcelona/Houston”
3. Guadalajara: 5 million+; 6.3% GDP; #1 Agri;“San Diego”

III. Other Regional Cities (1 to 3 million inhabitants)

1. North: Tijuana, Juarez, Tampico, other border cities.
2. Center/Bajio: Queretaro, Leon, SLP, Aguascalientes
3. South: Puebla, Villahermosa, Veracruz, Acapulco
Mexico Indicators & Demographics
I. GDP: $1.5 Trillion; Imports: Over $300 Billion
I. US sells it 50% of Imports, buys 80% of its exports
II. Population – Somewhere between 107 & 125 million
I. Urban (72%) vs. Rural (28%)
1. Working Age Population: 53% large cities, 14% medium
cities (10,000 to 100,000); 33% small cities/rural.
1. Employment: Large 10%, Medium 12%, Small/Micro: 66%
I. Age: 40% (0-19), 24% (20-34), 36% (35+)
I. Income: Upper (5%), Middle (40%), Lower (55%)
I. Upper and half of middle can buy imports: 25%
III. The most important Demographic: Sports
1. Soccer – National Sport
a. Clubs: America (Cowboys/Lakers/Yankees), Cruz Azul (Celtics), Chivas
(Cubs/Red Sox), Pumas (Eagles), Pachuca (Packers)

2. Big NFL fans but don´t know what college football is

a. 90% Cowboy fans, smattering of Steelers, Dolphins
b. Not really baseball fans = coasts only
 I. Crisis: Peso/US Export Dynamic

I. Pre-October Devaluation: strong buying, great terms

1. US market down, US exporters focus on Mexico/Latam
a. Peso strong, overvalued, purchasing power up
2. Oil prices high = Mexican gov´t spending up (oil = 1/3)
3. Only negative: Some Wall Street investment effects
II. Post Fall & Spring Devaluations
1. Purchasing power down + expensive US debt & inputs +
low mfging demand + low oil prices + low remittances+
low tourism = Mexico feeling full effect of global crisis.
2. Industrial & Consumer demand down; Import Substitution
III. 2008 vs 2009: January Trade Figures
I. US Exports to Mexico: Down 21.5%
II. Mexican Exports to US: Down 30.2%
II. Crisis – Why Delay, Recovery Prospects
I. US Crisis – Real estate, banking, then industrial
II. Mexico Crisis – Devaluations & Fall in US Demand
1. Peso: 10.5 to 13 in October, then to 15 in March
2. US/Global Crisis Origins vs. Mexico synergies
a. Not same linkages with Mexico as Industrial & Services
b. Caused delayed effect in Mexico and Latin America
III. Not so good recovery signs
1. Dependence on the US market for exports (80%)
a. Automotive/Industrial, Consumer down badly
2. Won´t return until 3 months after US returns (2010)
3. Price of Oil and it´s future effect on government spending
IV. Good recovery signs in Mexico
1. Less dependence on US or Mexican banking sector
2. Minimal real estate sector affect = no real estate plunge
3. PIN: Mexican job program – Construction & water sector
1. Program already in works, gov`t trying to accelerate
4. Mexico better prepared than in past: Will come back sooner
1. Low Inflation, low debt (& shifted to pesos), revenue up (taxes, oil)
US & Nevada Exports to Mexico: 2008
Top 10 US (2/3 of total) Top 8 Nevada (3/4 of total)
(Up 11.4%, 3 Qtrs up, 4th down) (Up 4.5% ; #4* export market)

1. 16.5% Electrical Mach (+2%) 1. 38% Electrical Mach (-2.5%)

2. 14.9% Industrial Mach (+10%) 2. 15% Plastics (+60%)
3. 9.2% Vehicles (+4%) 3. 13% Vehicles (+29%)
4. 7.3% Oil (+63%) 4. 6.5% Air/spacecraft (1000%+)
5. 7% Plastics (+2%) 5. 6% Industrial Mach (-38%)
6. 3.4% Chemicals (+7%) 6. 5.5% Gaming Equip (-60%)
7. 3% Medical Instrument (+17%) 7. 2% Nickel/Prods (+120%)
8. 2% Iron & Steel (+6%) 8. 1.5% Medical Instrumts (-17%)
9. 2% Iron/Steel Products(+41%)
10. 2% Paper Products (+8%)
 US Exports to World, Latam, & Mexico
 Canada 21%, Mexico 12%
 Mexico > China + Japan
• China < ½ of Mexico

 Export Growth Rates 2008: 160

• Canada 4.8%; Japan 6.2%
•
140
Mexico 11.3%; China 9.5%
• Germany 10%; Brazil 33% 120
Mexico
100 China
 US Exports to Latin America as % of
Exports to Mexico: 80 Japan
• Top 10 LatAm:$105 Billion 60 Germany
• 69% of Exports to Mexico UK
 Up from 59% (Brazil) 40
Brazil
• Mexico = 56% EU Top 10 20
0
 Nevada Exports to Latin Amer as % of 2008 US Exports
Exports to Mexico
- Mexico = Top 10 Latam
1. Argentina 50 Million, Up 33%
2. Brazil 37 Million, Up 50%
3. Chile 34 Million, Up 342%
 Mexico Imports: 2008
Top Sectors Mexico Import Dynamic (2006-08)
(Up 11.6%, 3 Qtrs up, 4th down) US: from 51 to 49%
2008 Growth: 10.8%
1. 21.3% Electrcl Mach (+11%)
China: from 9.5 to 11%
2. 14.6% Industrial Mach (+8%)
2008 Growth: 18.6%
3. 9.5% Oil (+60%x)
*Elimination of Chinese Quotas will
4. 8.5% Vehicles (same)
make this dynamic continue
5. 5.3% Plastics (+2%)
6. 4% Med Instruments (same)
Top 4 Digit Mexican Imports
7. 3% Iron & Steel (+29%)
1. Oil & Gas +60% (9% of total)
8. 3% Chemicals (+18%)
2. Autoparts: +5% (4.3%)
9. 2% Iron/Steel Products(+5%)
3. Tel. Equipt: +94% (3.7%)
10. 2% Paper Products (+3%)
6. Vehicles: -11.4% (2.6%)
*VERY SIMILAR TO US
EXPORTS TO MEXICO
Mexican Imports by Composition

Mexican Imports by Composition (Jan 2009)

16% 13%

Consumer Goods
Intermed Goods
Capital Goods

71%
 Mexican Imports by Composition
Growth/Decline
Import Composition Increase (% )

30.00%
20.00%
10.00%
0.00%
Consumer Goods
-10.00%
Intermed Goods
-20.00%
Capital Goods
-30.00%
-40.00%
-50.00%
2006 Sep-08 Jan-09
Best Opportunities: Before and After
October 2009 devaluation
I. Before - Almost everything except “snow shoes”
1. Government Procurement: Oil & Infrastructure Plan

2. Capital Goods: Good demand, great supply/terms

a. Price and Terms of Sale too good not to buy

3. Intermediate Goods: All goods, no tendency towards

import substitution
a. Only automotive and maquiladora operations demand slowing
– precautionary

4. Consumer Goods: Green, novelty goods, most imports

good thanks to stong peso = strong demand
a. Historic levels of available credit and financing
II. After – Industry and Consumer demand down
1. Government Procurement – Only “strong” sector
a. Construction and Water focused
b. Oil still with boom and Mexican hedging

2. Capital Goods
a. Full Machinery sales down, high inventory
b. Adjust to Parts and Rental Revenue = profits up

3. Intermediate Goods: Essential, non-import substitution

a. Manufacturing has slowed, not stopped
b. Brazil vs. Mexico: 75% + of Mexican imports

4. Consumer Goods
a. Cost Savings Products (razor sharpeners)
b. Packaged sets (appearance of more for less)
c. Price & Returns Push = Domestic product
NAFTA has been a Bilateral Benefit
I. NAFTA – Good resulting in Benefits
1. Trade: Tariff Elimination = trade explosion
a. Trilateral Trade: over $900 Billion annually
b. Bilateral Trade: over $365 Billion annually
c. US Exports to Mexico: Over $150 Billion annually
d. US Agricultural Exports – Mexico #2 destination
2. Manufacturing
a. Production Sharing - bilateral synergies
b. Help keep jobs in the US & region vs. moved to Asia
3. Social
a. Implementation of progressive measures in Mexico
b. US better appreciate and understanding of Mexico, especially
since the increase in the importance of Chinese imports
Concern I: NAFTA - Bad or Incomplete
I. Labor and Environmental Measures
1. Ineffective, last minute Clinton iniciatives
2. Environment: Big Need, not regulatory-driven
II. Government Procurement Accessibility
1. Mexico - Federal: ok; Muni, State, Pemex: same
2. US - Mexico opportunities are complex/difficult
3. Superficial/ineffective like labor/environment
III. Transportation – 1994 and 2008 and 2009
1. Teamsters vs. Canacar: keep border closed
2. Does anyone really want the border open?
IV. Regulatory Concerns – Noms, Permits
1. Mexico: Delays, Testing, Enforcement and
NOM/Permit holding Inconsistencies; US: Regulatory:
very complex
V. Feelings by both sides: Reopen NAFTA
renegotiations
Concern II: Mexico Crime Image
US IMAGE: Crime, Violence, Drugs, Kidnappings, Murders
I. Reality – Calderon taking on like never before
1. Taking on drug cartels = inevitable transitional violence
II. 7000 Deaths in 2008: 93% Police & Drug Cartel
1. Other 7% = Almost all Mexican to Mexican
2. Foreigners are very rarely victims and never targets
3. Business Travel in Mexico - travel with confidence
III. But there are problems ….
1. Border Situation – Juarez and Tijuana
2. Local Police - Ineffective and unprofessional
a. 5% of stolen cars found, tolerate/support crime
3. Kidnappings, Phantom calls – Foreigners not targets
4. Kidnap express, crime, taxi concerns – Affects us all
5. DRUG INTERDICTION EFFORTS IS NOT ONE OF THEM
II. Channel Options & Related
Technical Trade Issues
 I. First Experience with Mexico: Indirect
I. Exporting by Diversion – Manufacturer unaware
1. Product sold to US company, sent to Mexican operation
2. Sales to US distributors/reps that end up in Mexico
a. Examples: Martinelli and Oshkosh B´Gosh
II. Mexican companies request sales and you delivery to US
border and they import it
1. Mexican clients trying to go around US distributors
2. Or Mexican clients stumble on company website
III. Maquiladora: buying decisions by US home office, product sent
to US or border location
1. Maybe regional rep/distributor calls on Mexican maquila plant but
product shipped to US location
IV. TERMS: Cash in advance or extending credit to US entity
 II. Decision to take the next step:
How to sell more proactively in Mexico
I. As direct requests or indirect sales increase, or with
addition of new international sales people
II. Decision – dictated by costs vs. investment mentality, sector
dynamic, Int´l experience (CEO & sales), possibly US DOC,
State, or Association export development efforts
1. Using US trading company – most expensive option but
can test market and give access
a. Short term/transitory: Less & less likely for Mexico
2. Direct Sales with own US sales staff – Right staff, right
sales volume potential, and finite, large sales targets
3. Finding Mexico-based distributor or rep/agent
a. Even with resources, local presence often needed
Channel Market Strategies – Intermediaries
I. US intermediaries – Usually very sector and client specific
1. Rep and distributor options varied and plentiful
II. Mexico intermediaries – smaller market so much broader
1. Distributors culture with fewer viable reps who are hard to find
a. Distributor margins higher than US, more than expect
2. No MANA in Mexico, rep agencies few, low-tech approach
III. National & Multisector Coverage Challenges
1. Exclusivity vs. Non-Exclusivity – National, Regional, Sector
2. Some Industries require local coverage and stocking and are hard
to cover with one intermediary (hardware, MRO).
3. Multisector coverage challenges – sector vs. functional focus
a. Often with overlapping regional coverage issues
b. Need for multiple intermediaries = channel conflicts
 Mexican Distributor Option
I. Most typical & traditional market entry strategy
1. When practical, the first method considered

II. Role: Imports product, usually stocks product, buys/resells

product, controls price/margins, accepts buyer credit risk

III. Advantages: Holds stock, does marketing and in-market work,

provides after-sale service, only one credit issue.

IV. Disadvantages: No control of price or margins, branding and

sales staff control issue, may carry multiple and even
competition product, usually won´t broaden focus for you.

V. Distributor when: below $5-10,000, commodities, replacement

parts, stocking, if master distributor appropriate, if broad
coverage needed/wanted

VI. Decision: Big fish in small pond vs Small fish in big pond
 Mexican Rep/Agent Option
I. Not as typical, growing with push towards selling direct
II. Nature of Reps - Hard to find, very small, accidental not professional
reps, suspicious, little formal organization
III. Role: Does not buy/resell nor import product, finds & forwards clients.
receives commission when client pays, helps with AR.
IV. Advantages – You control pricing, have better marketing/ branding
control, will help with service, helps with AR with pay contingency;
Better meet commitment & presence expectations .
V. Disadvantages – You are responsible for invoicing, importing AR/credit
risk with clients, no stock in country = delays,
VI. Rep When: Above $5-10,000, capital goods, non-stocking, master
distributor inappropriate, want more than distributor support, and/or service/technical
knowledge important.
knowledge important.

VII. Decision: Agency vs. One man vs. De facto employee

1. Possible need for “dependent” rep/”de facto” employee
a. Need for “Evangelism” and Industrial Rep Challenges
b. Nevada company example
Reasons for Incorporation in Mexico
I. Selling through intermediaries not viable
1. Service requirements require OEM local presence
2. Simple client demands (automotive)
3. Want rep but need to stock product
4. Import Registrations and NOM control issues
5. Government procurement viability needs
6. Local Invoicing requirements (e.g. catalog sales)
7. High demand but price sensitivity won´t allow for
intermediary margins and commission
8. Channel market complexity requires local presence,
warehousing, and distribution.
9. Market Potential and importance to overall export sales
warrants investment in proprietary staff and distribution.
Mexico Incorporation Options & Details
I. Incorporation Options
1. SA (Limited Liability Corp., similar to a C Corporation)
a. Traditional incorporation mode in Mexico
2. SC (Civil Society, similar to partnership)
a. Traditional entity for law and accounting firms

3. SRL (Limited Liability Corp. with some minor partnership

elements, similar to a S Corporation)
4. Honorarios (Independent contract like sole proprietorship)
5. AC (Civil Association, similar to non-profit corporation)
6. Limited Partnerships exist but are not used in Mexico
7. Branches were “non grata” in Mexico, still seldom used

II. Board of Directors vs. Sole Administrator

III. Powers and Liabilities

IV. Procedure: Time, Costs (Notary & Registration)

 Contracts in Mexico
General Contracts Issues
I. Always use contracts - With
W intermediaries, clients, & employees
II. Mexican Distribution Contracts
1. Mostly based on free will of parties: US = Mexico
2. Avoiding violations in Local Civil & Commercial Law Imperatives
3. Typical Conctract Clause Elements – virtually same as in US
a. Definitions, Appointment/Agreement, Obligations of Distributor &
Manufacturer, Commercial and Technical Terms, Intellectual Property,
Legal /Law Aspects, Termination & Renewal, Dispute Resolution, Other
Provisions
III. Basic Mexican Contractual formality Issues
1. Preamble/Declarations
2. Rep of signing parties duly empowered
3. Applicable Language
4. Does not create employee relationship
a. Labor Liabilities
5. Termination Conditions
a. Labor Regulations
6. Law and Tribunals: Specified vs Applicable
a. Location of goods
7. Two witnesses
NOMS & Other Technical Trade Issues

I. Obligatory Product Certifications/Registrations

1. Performance and Safety Standards to protect
consumers not normally applicable to industry
2. Importer held, some can be held by US companies
a. Discrepancies between government agencies
II. Label Retail/Consumer Requirements
1. General and Food products: NOM 50 and 51
2. Specific Product labeling standards:electronics,clothing
3. Products not sold in retail environment can be exempt
III. Importers must insure that products meet these
standards before they can import, unlike UL
 Mexico Customs Issues
I. Tariffs at 0% (except with retaliation, 90 at 20%*)
1. Europe close to 0% as well – no US advantage
2. Rest of world without trade agreements: closer to 20%*

II. IVA vs. Sales Taxes: import & sales processing

III. Intercompany pricing & customs valuation issues
IV. Non-tariff issues if not barriers
1. Mexican NAFTA retaliation measures
2. Chinese Quotas and Safeguard Mechanisms
3. Regulatory
a. NOMs – Border vs Domestic Enforcement
b. Health Permits – Cofepris problems/delays
 III. Retail, Gov´t &
B2B Sales Dynamic
Retail/Consumer Sales in Mexico
I. Before October 2009
1. Good purchasing power, strong demand for foreign products,
special taste for American goods
2. Price important but novelty key as well
3. Consumer credit at historic levels, fueling demand
4. Open often to initial purchases at the border
5. Domestic warehousing and pricing key to replentishment
II. After October 2009
1. Dollar denominated purchasing avoided – import substitution
2. Domestic warehousing and pricing key for initial entry
3. If price is not right, novelty and cost savings essential
4. Strong Mexican consumption tendency
5. Consumer credit available but higher rates
Government Sales: Strongest Prospects
I. Opportunities – Dams, wastewater & clean water, medical,
construction, civil engineering/road projects
1. Water - 70% of products/technology are imported
2. Medical and Construction – Large percentage as well

II. Direct – Only federal, will be challenging to win

1. Unrealistic without local presence or local intermediary

III. Indirect – Find integrators and provide products they cannot make or
get in Mexico
1. Some Import Substitution & Price Sensitivity Concerns
2. Try to get products speced into bid with integrators help

IV. Gov´t Revenue Up: 1/3 of federal spending and large part of federal
subsidies to states/cities = oil
1. $120 US a barrel at peak, $70 now with hedging
2. Savings & debt profile: Peso debt is 6x more than dollar debt.
3. 2006-2012 NIP infrastructure program underway
a. Money reserved for projects before crisis
b. Mexican govt: project spending will not be altered in 2009
c. Mexican govt efforts to eliminate red tape to excelerate projects
 B2B Sales Dynamic in Mexico
I. With crisis, sales will be difficult, especially automotive,
maquiladora, capital goods.
II. Three best approaches/focuses in 2009:
1. Inputs and aftermarket parts without local competition
a. Not made in Mexico or inferior/unacceptable quality
b. “Cubanization” of Equipment: Repair and wait.
2. Less expensive products that can handle devaluations
3. Worst Case Scenario: Use time to establish, improve, or
change channels to prepare for 2010 recovery

III. Catalog sales/distribution is growing & viable

1. Grainger, C&H Distributors, Fastenal, Wesco, Travers
Credit & Collections Challenges &
Realities in Mexico
I. Finance/Credit
1. Upfront or 50/50 – maybe initially, but….
a. LC use limited – not Asia or Europe
b. Credit can sometimes be more important than price to
both the representative and your client – lesson from
Asians/Europeans
2. Bank lending to business up in 2008 (18%) but in 2009?
a. 2007: 75% of companies did not want bank financing
b. 60% relied on vendor credit before crisis, now?
3. Selling with Open Account – Sooner or Later….
a. Offer credit and build in 90-120 days of financing costs
b. Be upfront about financing costs: let the client decide
c. Always try to include a promissory note as a guarantee
d. Don´t even think about late fees without dependence
 Business Financing Sources

Percent of 2007 2008 2008 2008 2008 2008

Total ALL ALL SMALL MED LARGE AAA
Financing
Vendor 61.8 56.3 65.5 54.7 50.3 36.0
(70.1) (60.4) (53.8) (46.4)

Mexico 17.33 20.0 16.6 20.5 22.3 26.9

Bank (12.8) (18.8) (20.4) (26.8)

Foreign 2.38 3.2 1.4 3.4 4.1 9.7

Bank (1.0) (2.3) (4.5) (5.0)
Subsid 12.6 13.3 11.7 15.6 11.9 10.7
Group (11.9) (14.9) (10.3) (10.3)

Source: Banco de Mexico; Numbers in ( ) = last years figures

Trade Finance & Credit – Due Diligence
I. Offering financing/credit terms to clients
i. Important & unavoidable (See Business Financing Table)
ii. Before extending credit, review Mexican credit reports,
consider export insurance, check foreign references
i. Payment problems before crisis (#6 Latam), worse now.
ii. Before crisis: Terms given (62) vs. terms offered (48).
II. Credit Strategies to avoid non-payment and litigation
1. Promissory Notes, Guarantees, Liens, Trusts, Transfers.
a. Fast, Easy, no collateral, no fees, no interest rates
b. Secured financing still underdeveloped / underused
2. Need to verify that company is good for guarantee
3. Make owner sign guarantee as individual as well.
III. Bankruptcy – Improved laws and debt security
i. Only as good as position in debt line, still long delays
 Payments: Mexico vs. Latam
Country Prompt Pay 30 days + 60 days +
1. Brazil 63% 27% 15%
2.Colombia 67% 32% 16%
3. Peru 61% 32% 16%
4. Venezuela 62% 32% 18%
5. Chile 58% 37% 17%
6. Mexico 57% 36% 19%
7. Argentina 52% 37% 17%

Source: Latin America Business Monitor (2008)

 Mexican Collections Advice
I. Preparation Actions (before there is a problem)
i. Check out financial viability – especially distributors
ii. Sign guarantees or include guarantees in invoice
iii. Keeping good reception document records
iv. Payment delays = prompt further sales freeze
II. US company collection efforts in Mexico
1. US company or collection agency – little affect, no fear
2. Local Mexican agency calling – some affect
a. Often never get decision-maker to answer
3. Local Mexican attorney discussing litigation – best
4. Sometimes debtor will wait until start of litigation to pay
III. Litigation threat essential: low non-payment
consequences
1. Small amounts, high costs – no small claims court
2. $20,000 or less: Mexicans believe exporters won´t litigate,
and they shouldn´t unless they want to “publickly punish”
IV. LGA Consulting
Services
Current LGA Staff and Infrastructure

I. Office in northern Mexico City suburb

II. Staff of 9 – B2B, Catalog, Retail, Wholesale,
Government Sales & Sourcing Experience
III. AFFILIATE: SDL Consulting - Legal,
Regulatory, Accounting, Fiscal Services
IV. Alliances and Collaborators: in Guadalajara,
Monterrey, Brazil, Argentina, & Europe (2).
1. MANA Member - Service provider in Mexico and will
be participating in MANA webinar on Latin America
2. Active Mexico Member: American Water Works
Association and Water Environmental Federation.
 LGA Consulting Services

I. Export Business & Sales Development: Mexico &

Latin America
1. B2B – Majority of work that we have done for Wisconsin
2. Retail/Catalog – Strong staff expertise & current clients.
3. Government Procurement – Water/Environmental Focus
a. Commercial, Industrial, Municipal, Residential
4. Specialized Assistance for small foreign subsidiaries
5. Sourcing, Strategic Alliance, & Joint Venture Assistance

II. In-Country Legal & Accounting Services

1. Offered via Affiliate SDL Consulting
Realities about Secondary Information on
Mexico segments/Market
I. Secondary Information – Non-Existent, Bad, or Out of
Date
1. Market Information - NTDB, Canadian, Spanish
a. Not always up to date, sometimes too broad
2. Market Size – No information, need for models
3. Import Data – Not readily available, need to get raw data and
know how to analyze
4. Lists of Distributors and Reps – Non-Existent in Mexico
unlike in US, Asia, and Europe.
5. Company database Information – Local (Ibcon), US and
International (Harris, Hoovers, Business Monitor) -
problematic, not complete, not updated effectively
II. Why obtaining info on your own is difficult:
1. Mexican Associations – political, not institutional, not well
funded, non-civil membership attitude
2. Mexican public information - difficult to access, and
government statistical information not always good
3. Problems carrying out traditional surveys – suspicious of
people asking questions much more than in the US
4. Difficulty of getting info from intermediaries = they see
info as commodity and do not want to share it.

III. Related Problem: Attitude of US exporters – would

rather just find an intermediary to sell their product rather than
investigate first to determine viability of market and channel
strategies.

IV. LGA can help fill in these gaps so that you can have
the tools to make Mexico market decisions
Preliminary Market Analysis Services

I. Market Product Viability Analysis

1. Estimated landed price for your product in Mexico
2. Compare with competition – product mix & prices
3. Help determine viability to decide about market entry or
about how to change strategies to be more viable
II. White Board Calls & Visits
1. Conference calls with company decision-makers
III. Secondary source location, evaluation, and Primary
Investigation
1. Determine what information does exist and its value
a. Mexico Import data to better understand competition
2. Primary efforts: Potential client search for viability
information, Client or intermediary surveying, market size
model creation.
3. Price & Competition Analysis – One time or on-going
Market Access and Channel Services
I. New to Market & Growth Strategies: Retail, Wholesale,
B2B, Catalog
1. White Board Calls and Visits
2. Client Searches to help determine best channel market
strategies before doing intermediary search

II. Channel Market Strategies – Intermediary (Rep,

Distributor), Sales Manager, Alliance Searches
1. Candidate Searches
a. Basic and More Advanced Options: Locate and coordinate
visit vs. locate, interview, & decide.
2. Monitoring and interfacing with chosen intermediary until sales
begin in earnest to ensure success
a. Frustration of spending time & money on a search to see it
fall apart during first six months.
 Business Development Services

I. Client and Buyer Searches

1. For direct sales or to share with intermediaries to ensure
they adjust sales focus areas to your product

II. Government Bid Assistance – Direct & Indirect

1. Analyze current and past government demand, competition
dynamic, and integrator options
a. Search for Integrators and/or for Intermediaries
2. Help with government bid opportunities and process

III. Sourcing, joint venture, alliance partner searches

1. Sourcing – With peso devaluations, Mexico is bargain, LGA
can help identify and get quotes from partners
2. If you need a business partner, LGA can help find them
 Legal & Accounting Services
I. Corporate Law Services – Incorporation, Contracts,
Collections, Litigation supervision, labor Issues,
intellectual property, “legal rep”
I. Collections & related litigation supervision (next page)

II. Accounting – Mexican accounting, payroll, tax

paying, independent audit, litigation supervision,
fiscal domicile, and tax reimbursement services
III. Regulatory – Identify & explain compliance for
product and labeling standards (NOMs) and import
permits and registrations
IV. Other Related Services (Via Affiliate LGA Consulting)
1. B2B, Government, Retail/Catalog Business & Sales
Development for Mexico & Latin America
 Collections and Litigation Supervision
(Via Affiliate SDL Consulting)

I. Extra Legal – Interface/visit with client as attorney, try to collect

using litigation threat
1. Little or now upfront funds – based on payment
2. Current Workload: Receivables Control Corporation (RCC) and
Wisconsin exporters (NACM/ICE)

II. Pre Litigation Analysis - to determine viability

1. BIL litigation review, bank & property asset review,
document/case review
2. Relatively low cost; can be done as package or piece meal

III. Litigation Supervision – If after exhausting all other efforts and

payment is not forthcoming
1. With guarantee (Executive) or without (ordinary)
2. Find litigation attorney, work with and supervise throughtout the
litigation process.
3. Mexican litigation without LGA supervision will be nightmare
LGA: Strategic Assistance with focus on
and services for local implementation
I. Allows companies to access market worry-free
II. Can do everything but sell your product for you
III. One stop assistance: Business (Sourcing,
Sales, Channels), Legal, Collections,
Accounting
IV. Working with LGA is like working with a US firm
– communications, follow-through, follow-up.
V. LGA can offer you the custom (not boiler plate)
services (a) to meet your specific costs/needs,
and (b) en ensure your success in Mexico.
 LGA Consulting
US Toll Free: 1-888-750-0988
(Tel. 011-52-555-378-3890 or 40)
E-mail: vlencioni@lgaconsulting.com

Website: www.lgaconsulting.com