Latin consumers love fast food

Eating out is both a nutritional and socioeconomic occasion in Latin America. Typically, Latin quick-service restaurants, or QSRs, compete not only with other QSRs, but with street stands, cafeteria-style fast meal outlets and sit-down restaurants. About one in five Latins who buy/eat a meal away from home does so at QSRs, according to research findings reported in Latin America Perspective, a newsletter published by Market Development, Inc., a San Diego, Calif., research firm.

Their wide variety of menus and prices and their emphasis on providing quality service to the customer have helped major American franchise QSRs take share from the local alternatives. QSRs in Latin America have been successful in taking market share from street vendors by offering a more reliable and hygienic meal, and from sit-down restaurants by offering a less expensive meal. The predominant variables driving QSR use in Latin America are age, gender, socioeconomic status and certain unique regional attitude dimensions. Stabilized economies have increased disposable income, making it affordable for more people to buy at QSRs.

About twice as many Latin men use QSRs as Latin women, primarily because there are more working men than women on the road and in a greater variety of circumstances where a quick meal is an acceptable alternative to home-cooked meals. While Latin women occasionally use QSRs out of personal choice, Latin men use QSRs frequently because they have no other alternative.

The majority of QSR users are 18-29. About 12 percent are in the 45+ bracket - which, when projected across Latin America’s half billion consumer population, represents a market of some 90 million potential consumers. Almost two thirds of the children in QSR heavy-using households are under 18, and 47 percent are under 13.

On a market-by-market analysis, fast-food fans are found in greater numbers among Mexicans, followed closely by Brazilians, then Argentineans by a third less and finally Chileans, who use QSRs about half as often as Mexicans.

Contrary to the U.S., where QSR users skew towards the blue-collar segment, in Latin America, the skew is towards the white-collar (who account for almost half the heavy-users). Clearly, Latin QSR heavy-users are not mirror images of their U.S. counterparts.

QSR heavy-users have the mindset of a "cosmopolitan climber." Above all, they are "with it." They are Latin urbanites, par excellence, taking direction for their lifestyle and usage habits less from the local, Latin scene than from the global scene. Attitudinally, they are not satisfied with the status quo and are avid risk takers.

Latin QSR heavy-users are defined primarily by their high indexing on hedonism, trendiness and status consciousness. Because they believe they need exercise, they index high, for example, on: bowling, karate/martial arts, tennis, basketball, swimming, bicycling and soccer. Their favorite hobbies reflect back on their lifestyle attitudes, including, predictably, working on computers, going to concerts, studying foreign languages, playing a musical instrument, and going to plays and movies.

Their music preferences are, typically, modern; they like rock in English or other languages, as well as in their own language. Yet, they are not snobs, because they stay away from classical opera far more than the average. Predictably, while their antipathy is not as great as it is to classical opera, they also shy away somewhat from their own national folk music and the old-style romantic Latin ballads.

The single major determinant is their greater number of years of higher education, and their tendency to read more, which gives them their greater awareness and their worldliness.

They can be reached mainly through TV - they watch about as much TV as anybody else in the region. However, they also listen to more radio than others. Their viewing choices are, by order of preference: music and videos, movies and dramas, sports and talk shows and informational programs. At the same time, they stay away from both news and soaps.

Their "with-it" mindset leads them to own more American, rather than European or Japanese, cars. They buy lots of electronic gadgets. For example, they index especially high on computers, beepers, fax machines, electronic equipment, electric razors and dishwashers. They also own far more cellular phones and make more international long-distance calls than others.

Expectedly, they have somewhat smaller households, with fewer children, overall, than their counterparts. Clearly, Latin QSR heavy-users are not only attitudinally different from their U.S. heavy-using counterparts, they use QSRs for different reasons than their U.S. counterparts.

The 20-something lifestyle: hot tubs, wine & AOL

"Resplurgence," "sports" and "mellow moods" are three defining trends for 20-somethings as we enter the later 1990, according to Irma Zandl, whose firm, The Zandl Group, is a New York City-based marketing consulting firm specializing in the under-30 consumer. Zandl recently surveyed her proprietary consumer panel of 20- to 29-year olds to determine what activities (on a scale of 1 to 5) are becoming more cool and which are losing their cool status.

"Resplurgence" - Hedonistic activities, like gambling in Las Vegas, drinking a bottle of good wine and dining in fine restaurants are captivationg 20-somethings. With the economy strong and jobs plentiful, they want to enjoy their early adulthood by spending their freshly-earned money from their first jobs. Shopping is getting more popular as they indulge themselves on bigger ticket items. While they're out having fun, they are doing it in a classy way - sipping cocktails before attending a live theater holds lots of appeal. Marketers of big-ticket item, especially high-tech electronics, should reap benefits from this movement. Designer and premium products are also likely to benefit from this willingness to spend and indulge.

Favorite sports – Sports are going more upscale and individualistic. Golf heads the list of sports that are getting cooler, followed by mountain biking and snowboarding. All these sports share the requirement of purchasing at least one pricey piece of equipment and access to very specific (and often exclusive) venue of play. Women are the mast likely to say the WNBA and MLS are getting more cool, so it is clear that the success of new professional sports leagues is increasingly dependent on female fans. NASCAR’s recent rise in popularity, however, seems fueled by males and their traditional love of motor sports.

“Mellow Moods” – 20-somethings also like to chill and de-stress. Spending time with their honeys, cooking at home, picnics, and days spent in nature are getting more popular. Unlike the yuppies of the ‘80s, 20-somethings today don’t want to sacrifice spiritual and mental well-being for material success. With more young adults cooking at home, supermarkets stand to gain more young customers and home furnishing and appliance companies should also benefit. Stress-relief products, e.g, home massage equipment, candles, aromatherapy products, could also see increases in sales.

BellSouth tops J.D. Power satisfaction ranking

For the second year in a row, BellSouth achieved the highest customer satisfaction ranking in the annual J.D. Power and Associates Residential Local Telephone Customer Satisfaction Study. The study now features 13 of the largest local telephone companies, including the seven regional bell operator compariles (RBOCs), and independent carriers GTE, SNET, Sprint (United Telephone & Centel), ALLTEL Corp., Frontier and Cincinnati Bell.

In general, the RBOCs achieve higher overall customer satisfaction ratings than most of their independent competitors, including Sprint, ALLTEL, Frontier and GTE. While these independent carriers rank below the industry average in most areas impacting customer satisfaction, their major weakness is in corporate image. However, the two exceptions are Cincinnati Bell and SNET, both of whom perform well in measures relating to corporate image.

"This year’s results suggest that the companies that do not have a strong brand image on a local or national basis are going to have a major challenge in the new competitive environment," says Zaiba Nanji, group director of telecommunications services at J.D. Power and Associates. "As new rivals enter the local telephone marketplace, and consumers are faced with a confusing array of choices, corporate image will become an important differentiator."

As J.D. Power and Associates found in the 1996 Residential Local Telephone Customer Satisfaction Study, BellSouth again performs above the industry average in all customer satisfaction measures. Its main advantages versus its nearest rivals are in the areas of corporate image, specifically company reputation and being perceived as a technical innovator as well as a leader in the industry. Another area where the company ranks high is in the promotions area, including offering promotions that recognize loyalty.

The study is conducted among 15,600 consumers, who evaluate their local telephone company on the key areas that impact customer satisfaction.

The eight areas, in order of importance to overall satisfaction, are:

  • customer service, 23 percent,
  • cost of service, 20 percent,
  • corporate image, 19 percent,
  • call quality, 12 percent,
  • promotions, 10 percent,
  • billing, 8 percent,
  • calling card, 4 percent, and
  • operators, 4 percent.

Another significant finding in the study is that there has been a major shift in consumers’ attitudes toward the type of companies they would choose to provide all of their telecommunications needs. While more households would still choose a long distance provider as their sole telecommunications carrier, the proportion who would pick a local telephone company has increased substantially. In 1996, only 35 percent indicated a preference for a local telephone company, while in 1997, 43 percent prefer their local carrier. This may be a result of both aggressive marketing programs by local providers and a perceived lack of differentiation between the long distance carriers.

Collection agency revenues soar with consumer debt

Marketdata Enterprises, Inc., a Tampa, Fla., market research publisher of off-the-shelf studies about service industries, has released a new edition of its report, The U.S. Credit Bureaus & Collection Agencies Industry. The latest survey highlights, facts, opinions, forecasts from the Census Bureau, American Collectors Association, Commercial Law League, The Nilson Report, International Credit Association, Mortgage Bankers Association and more.

According to John LaRosa, Marketdata Enterprises research director, "As more people got into debt, there arose a multitude of credit repair schemes that preyed on them to ’fix’ their credit problems, for a fee. The FTC has aggressively fined dozens of such operations, and at least 24 states enacted laws regulating the credit repair industry. An estimated 600 million credit reports are generated each year - affecting virtually every auto purchase, home mortgage, even pre-employment screening."

Some of the study’s major findings:

  1. Industry size: Credit reporting was a $3.05 billion industry in 1996, expected to grow 6.9 percent per year to 2002. Debt collection is a $5.63 billion industry in 1996 (up  14.5 percent), forecast to grow 7.8 percent yearly to 2002. Total combined industry revenues are valued at $8.68 billion in 1996, forecast to grow 7.5 percent per year to $13.2. billion by the year 2002. The collection agencies segment has grown faster in recent years than credit reporting; 300-500 new companies enter the market each year and profitability has improved since the 1990-91 recession.
  2. In 1995, banks mailed 2.7 billion pre-approved credit card solicitations to American consumers - or about 17 offers to every American aged 18-64. Although this number fell to 2.4 billion in 1996 and 2.0 billion is projected for 1997, experts believe it will take some time before the cantionary measures that banks have finally put into effect will begin to be felt.
  3. There is increased blurring of lines of distinction between credit reporting and collection services, as credit bureaus begin to purchase collection agencies. During the past few years, a number of credit card-related companies have acquired collection agencies. For non-collection companies trying to diversify their portfolios, buying a collection agency is a quick way to bring in new types of accounts.
  4. 1995 was an exceptional year for collection agencies, as placements soared 38 percent. As in the credit reporting sector, the bulk of the business is with consumer accounts. The typical firm is estimated to have gross receipts of $916,000 now vs. $636,000 in 1992. Pre-tax profits are at 7 percent of sales - a five-year high. It’s estimated that the consumer collections business is 10-15 times larger than the commercial segment.
  5. Two distinct segments comprise the industry, and their characteristics are very different. For example, credit reporting is dominated by the three systems operated by Equifax, Trans Union, and Experian (formerly TRW). This business is national in scope. By contrast, debt collection is performed mainly by nearly 8,000 small firms operating on a local scale. The collections segment is also more recession-proof than credit reporting.

Should we fear the cookie monster?

The issue of privacy on the Internet is a growing concern for the general public. In an on-line poll conducted by Cyber Dialogue, New York, in July, and reported in the organization’s newsletter, Cyberlnsider, 84 percent ofrespon dents said that too much information can be revealed on the Web without one’s knowledge or consent. Adding to this concern is the apparent confusion over the information that a cookie can or cannot reveal about a Web visitor. (Cookies are files stored On your hard drive by your Web browser after you visit a Web site that hold information about your browsing habits, such as which sites you’ve visited, etc.)

While approximately two thirds (64 percent) of respondents correctly say that cookies tell whether one has visited a particular site before and more than half (56 percent) say that it can be used to determine where on a site a visitor has gone, respondents also make some clearly inaccurate statements about the powers of a cookie. Nearly four in ten (38 percent) believe that a cookie "specifies someone’s actual location while they are visiting a Web site, and more than one-third (36 percent) think that it can even determine the visitor’s name. Fourteen percent of respondents believe that a cookie can reveal an online user’s age and about one in 10 think that it can gain access to other files on their computer. In addition, 8 percent believe that cookies can either locate passwords stored on a computer or gain access to personal credit information.

One-quarter of respondents admit to having no idea what information cookies can 8% determine and many on-line users are also at a loss when it comes to describing their browser’s setting for accepting or rejecting cookies. Half of all respondents do not know whether their browser is set to accept, reject, or seek permission before accepting a cookie. Of those who do know their browser’s setting, one-quarter (28 percent) say their browser is set to ask for permission first. About one in five (19 percent) say their browser accepts all cookies and only 3 percent report that their browser is set to reject all cookies.

The confusion over cookies suggests that some of the public’s concern with privacy issues stems from fundamental misconceptions about the capacities of Internet technologies. Thus the solution to this anxiety may well be found in a clear articulation of the Internet’s capabilities, its limitations., and its intended uses.

I’ll change the oil myself

When it comes to changing the oil in their cars, nearly one-third of Americans do it themselves, according to a recent Maritz AmeriPoll. And it’s not just men who are crawling under cars to drain oil pans - 29 percent of women say they change their own oil.

Getting the oil changed at a specialty store, such as Jiffy Lube, ran a close second, preferred by 29 percent of the population, followed by service through an all-purpose auto repair shop (20 percent) and a car dealership (18 percent). Women are more likely than men to choose a dealership or all-purpose shop, whereas men prefer the quick ease of an oil-change specialty store. Twenty-eight percent of Americans 55 and older trust their dealerships to do the job.

Despite Americans’ love of speedy service in their busy lives, 30 percent listed quality of work as the number one factor in choosing their oil-change provider. Other considerations include quality of customer service (20 percent), price (17 percent), location (12 percent), speed (9 percent) and no-appointment-needed policy (8 percent). Again, motivated by convenience and ease, men are significantly more likely than women (15 percent vs. 9 percent) to be influenced by the location of the oil change provider.

Most Americans are fairly conscientious about changing their oil regularly. A full 57 percent have it done at or before 3,000 miles, and another 29 percent who procrastinate do it before they hit 4,000 miles. Just 14 percent of people go beyond the 4,000-mile mark.

Maritz AmeriPoll is a national consumer opinion poll conducted regularly by Maritz Marketing Research Inc., St. Louis. Results are based on telephone interviews with American adults. Accuracy of the results is within +/-3.09 percent.

Many Internet users doubt Web information

Nearly half of Intemet users doubt the reliability of the information acquired over the Web, according to a survey recently released by New York-based, CDB Research & Consulting Inc., the research subsidiary of the public relations agency Creamer Dickson Basford. "Although familiarity with and usage of on-line services has increased steadily since 1994, an astounding number of consumers are not yet convinced of the accuracy of the information available," says Dr. Larry Chiagouris, executive vice president and managing director of CDB Research & Consulting Inc. (47 percent fear information is not reliable vs. 53 percent who believe information is reliable).

Despite this apparent lack of faith in the Internet, those who do use on-line services tend to use them frequently. In fact, 44 percent report going on-line every day. The users also subscribe to an array of service providers, including America Online (50 percent), MicrosOft Network (25 percent), CompuServe (18 percent), and Prodigy (11 percent).

The average Internet user is more likely to be male than female and between the ages of 35 and 44 (62 percent male vs. 38 percent female). Willingness to use the Internet decreases dramatically with age. Of Internet users, 34 percent are age 35-44; 21 percent are age 45-54; 3 percent are age 55-64; and 4 percent are age 65+. Younger users include 12 percent age 18-24 and 26 percent age 25-34.

Education and employment also factored in the results of the survey, revealing that almost half (48 percent) of Internet users have at least a college education. Eight out of 10 of the users are employed (83 percent employed vs. 17 percent unemployed), primarily in professional/ managefial jobs (55 percent hold such jobs). The majority (53 percent) of those employed earn over $55,000 per year and are likely to own their own home (73 percent are homeowners).

Study methodology: Telephone interviews were conducted the last week of November 1996. The sample consisted of a national cross-section of 500 adults, ages 18 years or older. The margin of error is +/-6 percentage points.