This article is about The Best Market In Cuba. Some observers have been watching political developments in Cuba in a spirit of anticipation. Anticipation of a potential market that-due to political isolation-has been simmering on a back burner for 45 years.
But are they “looking at the market through rose-colored glasses”?
Yes, there are thousands of Cubans who don’t posses what the rest of the world considers “essentials”. Thousands of Cubans driving gas-guzzling 50-year-old cars.
There’s an opportunity right there. What could a Chevy dealership do?
Answer: Go broke.
Because the fact is, with an average income of about $20 a month, most Cubans can barely afford to put gas in the cars they already have, let alone make payments on a new Chevy. They’ve learned to Deal with It. Park the Classic Chevy until they have gas money or repair money or whatever. Some have created an underground economy selling food or art or crafts. Problem is, the only people with money to spend are the tourists. And while they might have money to spend, there aren’t too many repeat customers.
And the one single over-riding fact is this: it doesn’t matter how useful the Product is, how attractive the Package, how effective the Promotion-if the consumer can’t afford the Price-no sale.
Until Cuba’s economy makes some adjustment to increase the purchasing power of the people, the profit potential for businesses targeting Cuban consumers is nil.
In the movie “It’s a Wonderful Life”, there’s a scene where Jimmy Stewart’s character is arguing with the town slumlord. He points out that the building and loan helps ordinary working people buy their own homes, and asks “Doesn’t that make them better citizens?”
One can argue that socialist economies provide citizens with a basic level of security. Cuba has provided its citizens with outstanding health care and education. They have more doctors per capita than any other nation. But those doctors only make $15 an hour. Now that’s a veritable fortune when their patients are only making a little more than $15 a month. But it still isn’t what they’re worth.
Does that mean you can’t do business in Cuba?
No. It just means your customer isn’t the Cuban citizen. You have two options: tourists or the Cuban government.
The latest economic reforms aren’t a testament to the success of the Cuban economic model. They are a desperate attempt to prop up a rapidly deteriorating structure. So maybe the Cuban government isn’t the best potential customer either. For the time being, they’re the best market in Cuba. Just ask any Cuban.