CUBA: A marketing no man’s land to sieze?
Since the beginning of the U.S. embargo on Cuba in 1962, American brands have been denied access to the island’s market while direct commercial flights between the two countries were discontinued. It thus follows, in the collective psyche, that Cuba is an out-of-time no man’s land. Can you imagine, no McDonald’s, no Starbucks or Taco Bell? Is that even a life? (#NotForAMarketer)
(It is interesting to see that while these brands are beloved success stories at home, they become the epitome of a cultural downgrade abroad)
Well, now that President #Obama has announced that diplomatic relations were to be restored, all bets are off.
But was Cuba really cut off from any contact with U.S. brands?
Nike shoes hang on a wall display at a shoe store in Havana. Some of the merchandise is authentic, but some are knockoffs.
According to NBC, some brands made it through enemy lines. #Nike, #Colgate and #Marlboro are all pretty easy to find in Cuban supermarkets, pharmacies or hotels. Apparently, this is done in spite of the brands themselves:
"We try and do what we can to police ... but in a globalized economy, it's impossible to catch everything," said Vada Manager, director of global issues management for Nike Inc.
It is actually wholesalers from Europe, Asia or Latin America who sell to Cuban importers.
Yet, even if some brands are already on site and can count on some level of awareness among the Cuban population, it is doubtful that there would be much loyalty once the Embargo rules are relaxed due to the absence of marketing of any form to foster true relationships.
The Marketing rush:
The news rejoiced airlines of course, who want to capitalize on Cuban-Americans visiting their relatives from Miami and Fort Lauderdale airports. But how can they predict how things are going to go the other way around? Cuba has a lack of infrastructure and many restrictions to travel that might not be covered by the standardization of diplomatic relations. Will marketing be enough to attract Cuban citizens? Should airlines rush into it to ensure that they carve out the lion’s share for themselves or should they take the time to study their target segment to ensure the effectiveness of their marketing efforts?
Experts warn that it might be years before the route between U.S. and Cuba becomes profitable for airlines. There is certainly a tradeoff to be made between immediate and potential future gains.
Questions were raised about whether Cuba is in fact the future of U.S. retail.
Cuba is not a rich country. In fact, the average Cuban government employee earns about $20 per month, infrastructures are in poor state as a legacy of the Soviet Union and mobile and Wi-Fi coverage are unreliable (the 2G network is connected to Venezuela!)
Studying that market, knowing how to address it and how to set prices will surely become critical.
But lifting the embargo might bring a tourism boost for the Cuban economy and bring about more purchasing power for local consumers.
“As American visitors begin to increase travel, there will be an opportunity for American comfort brands to quickly gain market share. But due to some of the mobile and Internet infrastructure issues in the region, it will happen initially through more traditional means, versus [being] innovation-led in the short term,” said Tom Edwards, senior vice president of digital strategy with The Marketing Arm, Dallas.
An Untapped market
Cubans have been cut-off from many American brands but also from traditional forms of marketing and there is a hope for retailers that consumers will be hungry for capitalist goods.
Bans on advertising still cover restaurants, coffee shops and night clubs among others. Even if these services can be marketed in the near future, it will most likely be government-enforced.
So when all else fails (technology-wise), should marketers go back to old tricks in order to raise brand awareness? For example, advertising could fall back on SMS rather than apps or websites in order to properly reach their targets. Methods whose effectiveness has already been proven may fare better. But every market is different, you can’t just copy-paste what worked in the US.
And in Cuba’s case, even though what stands to be gained might not be as much as in a “regular” market, the first brand to enter the market will surely have a lasting competitive advantage. In the “no man’s land”, the number of potential customers a brand manages to reach might actually amount to the number of customers a brand will acquire.
Ready. Set. Go.