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The Changing Influences Of Brand Essay

3520 words - 14 pages

THE CHANGING INFLUENCES OF BRAND PREFERENCES ON MEXICAN ADOLESCENTS Since the North American Free Trade Agreement (NAFTA) was implemented in Mexico in 1994, many changes have occurred in the Mexican marketplace. In the past, due to tariff and non-tariff barriers, product competition and product quality was held to a minimum. Although U.S. products were considered high-quality by Mexican consumers, the price of U.S. products couldn't compete with domestic products. NAFTA was first implemented in 1994 but not all tariffs will be reduced until 2009. The changes that have occurred in the Mexican marketplace as a result of NAFTA have so far included: an increase in the selection of brands within a competitive price, an increase in product quality, and an introduction of new product categories.The United States and Mexico Chamber of Commerce reported that in the first five years of NAFTA, trade between U.S. and Mexico increased by 113 percent compared to 1993, the year prior to NAFTA. This figure is expected to climb as NAFTA takes full effect. As NAFTA specifies, tariffs that are still in effect today will no longer be in place by 2009.Mexican corporations have experienced tremendous growth. Mexican exports rose an astonishing 135 percent (Carrera 00). NAFTA, so far, has proved to be a success for Mexico, bringing in numerous investors, employment and growth. Maquiladoras, foreign owned assembly plants located in Mexico, have special privileges under the NAFTA agreement. These assembly plants are allowed to import duty-free components and raw materials from the U.S., into Mexico. When the finished products are exported back to the U.S. the original U.S. components are exempt from any tariff (Cargill, 97). Because of these regulations, NAFTA has attracted Japanese investors to Mexico.Many Japanese companies have entered Mexico in order to more inexpensively import goods into the U.S. and eventually sell products to Mexican consumers as trade liberalization continues (Carrera, 00). These international investors are creating jobs for Mexicans. Maquiladoras were responsible for employing nearly one million Mexican employees in 1998 which was 82 percent greater than five years previous. (Carrera, 00). Due to the NAFTA success, Mexicans have a decreased unemployment rate, more stable employment, and more disposable income than five years ago (Cargill, 1997).Mexico has experienced an increase in imports as well. U.S. imports into Mexico have more than doubled since NAFTA has taken effect. The United States imports alone to Mexico totaled 86.87 billion in 2000, according to the U.S.-Mexico Chamber of Commerce. This makes Mexico the second largest export market for U.S. goods and services.For U.S. marketers, NAFTA opened a large opportunity to reach new markets. Although Mexican consumers did not have a large disposable income, the extremely large Mexican population made the marketing opportunity worth investing (Malkin, 00). Knowledge that the Mexican culture...


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