JWT AnxietyIndex: Argentina (January 2010)

ANXIETYINDEXARGENTINA

JANUARY 2010

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

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

What’s making people anxious today? ........................................................6

A closer look at Argentina ..............................................................................17

The recession’s impact on Argentina vs. other countries................................18The recession’s impact on lifestyle ................................................................21Media and the recession ................................................................................30Shopping behavior and the recession ............................................................36Looking to the future: The next generation ....................................................39

In Conclusion ........................................................................................................42

2

3

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.

Argentina - GDP Percent Change

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

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

BACKGROUND (CONT’D.)

4

15

10

5

0

-5

-10

Source: CIA World Fact Book

2004 2005 2006 2007 2008 2009 2010(est.)

% Change

8.7 8.39.2 8.5 8.7

6.8

-2.5

METHODOLOGYQuantitative survey conducted by JWT SONARTM, our proprietary onlineresearch tool

Data collected January 2010

328 adults aged 18-59, living in Argentina

Data weighted by age and gender

5

WHAT’S MAKING PEOPLEANXIOUS TODAY?

6

7

Overall anxiety levels in Argentina 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 Argentina Mexico UAE India U.S. Spain Brazil U.K. AustraliaColombia Canada 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 a full quarter of respondents saying they are “very nervous/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

8

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

9

Cost of Health Care


State of Economy



Crime Job Security

Threat ofTerrorism

1000

900

800

700

600

500

400

300

200

100

074

81

52

235

517

228

985

298

575

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

10

Financial security and personal safety stand out as anxieties, while wars and terrorism

are further from the collective consciousness.Argentina

Global average

Cost of Health Care


State of Economy



Crime Job Security

Threat ofTerrorism

1000

900

800

700

600

500

400

300

200

100

074

81

52

235

517

228

985

298

575


11

Anxiety over personal finances is pronouced even compared with other

LATAM markets we studied.

*Brazil, Argentina, Colombia, Mexico

Argentina

LATAM* average

12

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

49

367

8449

275

784

103156

360

35

193

112

29643


In addition to current concerns like food prices andnational infrastructure, Argentines also worry about thefuture, specifically natural disasters and global warming.

Argentina

Global average


13

Argentina shares the same specific concerns as LATAM in general, although Argentines have heightened

anxiety around food prices and infrastructure.

*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

49

8449

275

193367

156103

784

495

11235

296

360

43

Argentina

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, Argentines are fairly pessimistic about the prospect of positive change in the near term.

14

Safety of the food supply

The housing market

The stock market

Bank failures

Unemployment rates

Gasoline prices

Food prices

The government’s budget deficit

-35-27

-67-34

-72

WORSE BETTER

-3

-25

-35

1

2

01

ArgentinaGlobal average

More optimistic

More pessimistic

-19

-15

-45-29

15

Likely because people are still feeling the sting 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

20

4733

%

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

16

... though many believe they have fared better than their countrymen.

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

47

%

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

67Impact on me =

Impact on Argentina =Impact on ArgentinaImpact on Me

A CLOSER LOOK AT ARGENTINA

17

18

THE RECESSION’S IMPACT ON ARGENTINA VS. OTHER COUNTRIES

Most think the recession has affected Argentina toabout the same degree as other countries in the region.

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

19

Impact of Recession on Argentina vs. Other Latin American Countries70

60

50

40

30

20

10

0

19 18

63

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

%

Argentines are split on how the country has fared compared wealthier countries.

20Thinking 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 Argentina vs. Richer Countries

36 32

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%

32

70

60

50

40

30

20

10

0

21

THE RECESSION’S IMPACT ON LIFESTYLE

Argentines consider ivory-tower politicians,class inequalities, crime and corruption as

the primary social impacts of the recession.

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

22

% 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

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

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

and the poor in my country

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

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

61

58

58

58

45

32

13

8%

Behavior-wise, people 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 thelist of activities below, are you doing each more often, less often, or about the same amount as you did before the global

economic downturn?

23

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

6236

3

6136

2

6038

3

5938

2

5444

2

5444

44

1145

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.

6659

24

% Doing Activity LESS by Gender

6457

6951

6849

6345

6245 Women

Men

Some people have told us that recently they have made some changes in how they are spending their time. Looking at thelist 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

Because of crime in my neighborhood

I want to spend more time with my family

Because most of my friends are

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

I improved my home entertainment/bought newitems for home entertainment

Other

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 spendingmore time at home?

80

25

Why People Are Spending MORE Time at Home

31

24

23

12

2

10

%

Crime is a prime 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?

26

70

60

50

40

30

20

10

0

52

32

14

2Very Somewhat Not very Not at all

concerned concerned concerned concerned

84

16

How concerned are you about crime in your neighborhood?

%

... and appears to be tied to the downturn,as anxiety related to crime has risen steeply ...

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

27

%

Increased Stayed the Same Decreased

80

70

60

50

40

30

20

10

01

68

31

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

Has your routine changed due to concerns about crime?80

70

60

50

40

30

20

10

0

... impacting the daily lives of many, especially women.

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

5563

Yes No

28

4537

WomenMen

%

Going out less often than I used to

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

Not going out at night

Choosing to shop in different areas/stores

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

Choosing different methods of transportation

Buying fewer luxury items

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

Other

People have adopted coping mechanisms impactingvarious areas of their lives, from going out less oftento showing less bling to shopping in different areas/stores.

And how or what have you changed?

6147

5251

5736

4541

5036

4720

2129

1611

29

Has your routine changed due to concerns about crime?

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

WomenMen

119

30

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?

31

60

50

40

30

20

10

0

4

5244

0I 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

%

Argentines 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?

32

100

90

80

70

60

50

40

30

20

10

0

8776

5746

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, especially among men.

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

33

100

90

80

70

60

50

40

30

20

10

0

8575

Yes No

1525

WomenMen

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

%

Most Argentines feel the media has covered thedownturn in the right proportion. If anything, there’s

been less coverage than they’d like ...

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

34

%

Too Little Right Amount Too Much

80

70

60

50

40

30

20

10

0

11

29

60

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

... perhaps that’s why most Argentines were unaware of reports that LATAM will

enter a recession this year.

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

35

%

Yes No

80

70

60

50

40

30

20

10

0

59

41

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

36

SHOPPING BEHAVIORAND THE RECESSION

Paying closer attention to prices while I’m shopping

More actively looking for items on sale

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

Buying only when I am close to running out of something

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?

69

69

62

54

45

43

36

26

22

13

37

Actions taken as a result of the global downturn

11

%

... and defensive recessionary behavior seems yet to have gripped Argentines.


38

% 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 attain the lifestyle I want

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

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

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

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

40

34

28

27

16

13

%

LOOKING TO THE FUTURE:THE NEXT GENERATION

39

While a majority of Argentines are generally 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 sayyou are about the world your child(ren) or grandchildren will inherit?

40

100

90

80

70

60

50

40

30

20

10

0

7990

25

43

Anxious about Anxious about Very Anxious about Very Anxious aboutthemselves their children/ 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.


41

% 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

79

75

69

49

46

27

% Among those who have children

IN CONCLUSION

42

IN CONCLUSIONArgentinean consumers are accustomed to economic turmoil (inflation,recession, etc.) and have lived with various forms of economic crisis fordecades. They are adaptable, expanding and shrinking their spending inaccordance with the times.

This is why the main driver of anxiety is the state of the economy,specifically the uncertain future that people constantly face.

Within the economy, the most relevant issue is inflation, which causes aday-to-day rise in the cost of living. Argentina, which is not experiencingthe same recession as most of the world, has been grappling withpermanent price fluctuation under the ghost of inflation since the 1970s.

43

IN CONCLUSION (Cont’d.)

The other important driver of anxiety is concern about security andcrime.

The media is stoking perceptions that crime is increasing and that thecountry’s economic future is uncertain. The biggest media owners areusing their popular newspapers to wage a battle against theadministration because of political and economic differences. Socoverage of these issues tends to exaggerate the facts in order toachieve greater political opposition.

44


Argentina is going through a credibility crisis. Since the last serious social,political and economic crisis, in 2001, Argentines have suffered a deeplack of credibility. The current administration is distrusted because of howit carries out decisions and accusations of corruption.

Leadership is weakening because of a general perception of politicians ascorrupt and out of touch with society’s needs.

The high level of anxiety has resulted in widespread social tension andaggressiveness in the streets.

45


As Argentine consumers are accustomed to economic difficulties, theydon’t consider the global downturn a relevant issue. They know about it,but local problems are more meaningful to them.

46


This gloomy picture provides brands an opportunity to offer optimisticmessages and a positive brand experience, standing out by counteractingthe negativity dominating Argentinean society.

People are looking to slow down and enjoy life. Brands can play animportant role by helping people who are seeking balance and harmony.

47


Walmart and Kraft Royal are two brands that are bringing some fresh airby communicating from a positive point of view.

Walmart: “Save money. Live better”

The economic crisis has led to a waning belief in the idea of savingmoney—people don’t believe it’s really possible to save much. As aconsequence, people feel that having a happy life with friends and family ismore important than being materialistic and money-oriented. But the “Savemoney. Live better” proposal tells customers that by saving money, theywill have a more enjoyable life.

48


Kraft Royal: “Nourish their happiness”

The target is the modern mother between 25 and 35. The brand ispositioned as a way for mothers to be both responsible/caring and fun.“Nourish their happiness” tells mothers they can give their kids a nutritiousdessert that they will love; and it’s both a cheap and simple option (itcomes ready-made), perfect for a busy mother on a budget.

49

THANK YOU

Alexandra SuarezMarket Research Director

JWT Latin America

[email protected]

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

Mark TrussDirector of Brand Intelligence

JWT Worldwide

[email protected]

Ann M. MackDirector of Trendspotting

JWT Worldwide

[email protected]

Business

JWT AnxietyIndex: Argentina (January 2010)