HAVANA, May 11th Cuba is only 90 miles away from the United States. However, in certain ways, it is a far more distant and strange market than most Americans are used to. No less so than in its approach to advertising and brand recognition.
With the new opening in relations and the surge in interest in the Cuban market by Americans, it serves well to know the limitations of brand promotion that one is likely to meet on the island.
Despite the embargo, Americans have long been able to register their trademarks in Cuba under a general license allowing the expenditure of moneys to register and renew intellectual property in general and trademarks in specific, on the island.
Until the early 2000s when the embargo was relaxed to allow the export to Cuba of branded agricultural products, how to develop and promote the brand in Cuba was not much of an issue. Since then, and with the more recent opening, how to use one’s trademark in Cuba and how to build market share has become more important.
A business considering the Cuban market must first decide to whom they wish to advertise. Cuba’s dual currency system creates two distinct target markets. The Cuban convertible currency (CUC), which is pegged to the value of the dollar, is used in the tourist sector by tourists and tourism service and goods providers. The Cuban peso (CUP), which is worth 25 CUPs to one CUC, is the currency used by the rest of the country.
According to Cuba’s National Office of Statistics, Cubans earned the official average monthly salary of 687 pesos, or about $25, in 2015. A recent consumer survey conducted by Boston-based Rose Marketing indicates that nearly 66 percent of the Cubans surveyed actually earned from $50 to $500 a month and a small percentage, less than 5%, earned from $500 to $1000.
This additional income is generated by working extra jobs, by working in the growing private sector of “cuenta propistas” or by working in some relation to the tourist sector. A foreign business has to decide if it is targeting its brand to the tourist sector and visiting tourists which have far larger spending resources of the national market with far more limited consuming potential.
Unlike the United States, you cannot simply purchase an ad in a newspaper or buy a TV spot to promote your brand in Cuba. Cuba has always had an uncomfortable relationship with commercial advertising in general and with consumerism in specific. Advertising was intended to promote the principles of the revolution.
As a result, you cannot buy a billboard or a broadcast ad. Billboards and mass media are generally reserved for political messages by the government and the Communist party. Although there has been talk of expanding permissible media advertising to other radio and television sources, Radio Taino, called the tourist radio station by the government, is currently the only option. A few small tourist and foreign investor related publications are starting to offer advertising, but not at a broad national level.
Radio Taino advertising reaches beyond tourists and the tourism sector. U.S. publications targeted at investment or travel to Cuba, cruise ship advertising and airline publications also allow advertising to tourists and foreign investors. T-shirts, fliers and word of mouth advertising is another way to spread the word. Participating in trade shows to generate government press publicity for its products has been another vehicle used by foreign companies.
The growth of foreign service businesses like Western Union and government authorized private businesses such as registered rental properties, private restaurants known as “paladares” or private collectives has led to the spread of small signs identifying a restaurant or guest house which can now been seen around the island.
However, their size and prominence is a balancing act for the Cubans on the island, at once trying to attract the consumer without invoking unfavorable government attention. However, this is changing and recently a man-sized digital advertising sign was installed by the government in the Vedado district.
With the growth of the internet on the island, digital advertising has also become a way of getting brand visibility for local businesses or for an incoming brand. Online cites targeted at the Cuban national and tourist market are growing as are cites for foreigners travelling to Cuba.
On the island, the “paquete semanal,” is a USB distributed file containing pirated soap operas and television shows which includes advertisements for local businesses. The Cuban version of Craigslist, Revolico.com, is also thriving as is Alamesacuba.com, Cuba’s version of Open Table.
For a U.S. business interested in marketing in the Cuban market, options are slowly growing. It is probably best to contact one of the handful of advertising companies that have sprouted on the island and to plan as part of any new venture how the brand will be marketed.
The reward for carefully approaching this issue with forethought is to establish an early footprint in what is likely to become a significant Caribbean market.