Marketing Plan: Coca­Cola to Cuba 12/17/15 Final Marketing Plan Lars Anderson, Kelsey Parkin, Austin Barr, Taji Onesirosan Professor Cardona, Global Marketing BUS318 Background Coca­Cola: Coca­Cola is a thriving and massive company with over 3,500 products in over 200 countries. The company was founded in 1886 and has been established as the world's largest beverage company comprised of over 500 brands, 20 of those brands being worth over 1 billion dollars. Because of the company's success Coca­Cola has made it an effort to improve the social well being of many different countries. Some of the countries that Coca­Cola has been active in are China, Colombia, South Korea, Turkey, and the United Kingdom. The Coca­Cola Foundation has given a significant amount of money to meet the needs of these countries and also a number of other countries. Some of the ways Coca­Cola serves these countries is by providing water, education, and disaster relief. Coca­Cola has a very positive presence in most every country it is current in. Because there are only two countries that the Coca­Cola brand does not reside, it is our desire to target one of those countries so that we can provide a great product but also so that we can invest into their culture. Potential in target country: With Cuba and North Korea being the only countries that do not sell Coca­Cola and with the new Cuban relations with the United States, we plan on entering Coca­Cola in the Cuban market. Coca­Cola desires to be the first American product to enter into the Cuban Market and we believe the Coca­Cola brand that has the capability to do so. Because of the world­wide recognition that Coca­Cola has it is anticipated that the Coca­Cola products will be well received as Coca­Cola provides a high quality product. It is assumed that Coca­Cola will be able to provide beverage products at a lower cost because of their ability to mass produce their product at a low cost, this is a plus for the Cuban Market. Also, because Coca­Cola is in almost every other country in the world that proves that the Coca­Cola company knows how to operate in many different cultures, which is clear by their outstanding success and dominance in the beverage industry. It will also be an effort of Coca­Cola to invest into the Cuban culture where necessary. Coca­Cola is passionate about giving back to the communities and Cuban is a country that could greatly benefit from the Coca­Cola company in a number of ways. Launching this product into the Cuban Market will also help in the rebuilding of relations between the United States and Cuba. Potential Challenges: Potential challenges would be the new relationship and acceptance of the American brand in the country. How easy and successful will it be to start selling Coca­Cola in Cuba? Since Coca­Cola is a widely well known American based company and Cuba could see our company as a pressing Americanizing company that will change the way they live. Cubans could associate our product/brand with the “American stereotype”. This global opportunity will be a new venture for the brand to enter a country that had prohibited it for so long. We will have to find a new approach to market Coke to this country. If it goes smoothly, this could be a huge profit for the company. II. Economic Analysis Guideline I. Introduction The government continues to lower the socialist economic system to have a more firm political control. Since the Cuban Communist Congress that was held in 2011, the Cuban government has slowly and incrementally implemented limited economic reforms, including allowing Cubans to buy electronic appliances and cellphones, stay in hotels, and buy and sell used cars. As the Cuban government has cut state sector jobs as part of the reform process, it has opened up some retail services to "self­employment," leading to the rise of so­called "cuentapropistas" or entrepreneurs. Currently, approximately 476,000 Cuban workers are registered as self­employed. Despite some reforms, the average Cuban's standard of living remains at a lower level than before the collapse of the Soviet Union and the resulting downturn of the 1990s. (www.cia.gov). II. Population A. Total 1. Growth rates As of 2014, there was an annual growth rate of 0.146 (http://globaledge.msu.edu/countries/cuba/statistics) 3. Birthrates 9.9 births/1,000 population (2015 est.) (www.cia.gov). B. Distribution of population 1. Age 0­14 years: 15.96% (male 904,800/female 855,309) 15­24 years: 13.29% (male 752,160/female 714,384) 25­54 years: 47.16% (male 2,620,536/female 2,581,344) 55­64 years: 10.65% (male 562,207/female 612,438) 65 years and over: 12.95% (male 639,515/female 788,740) (2015 est.) (www.cia.gov) 2. Sex at birth: 1.06 male(s)/female 0­14 years: 1.06 male(s)/female 15­24 years: 1.05 male(s)/female 25­54 years: 1.02 male(s)/female 55­64 years: 0.92 male(s)/female 65 years and over: 0.81 male(s)/female total population: 0.99 male(s)/female (2015 est.) (www.cia.gov) 3. Geographic areas (urban, suburban, and rural density and concentration) urban population: 77.1% of total population (2015) rate of urbanization: 0.07% annual rate of change (2010­15 est.) (www.cia.gov) ​ ​ 4. Migration rates and patterns ­3.66 migrant(s)/1,000 population (2015 est.) (www.cia.gov). 5. Ethnic groups white 64.1%, mestizo 26.6%, black 9.3% (2012 est.) (www.cia.gov). III. Economic statistics and activity A. Gross national product (GNP or GDP) Image provided by Global Edge 1. Total $128.5 billion (2014 est.) $126.9 billion (2013 est.) $123.5 billion (2012 est.) (www.cia.gov) ​ ​ 2. Rate of growth (real GNP or GDP) 1.3% (2014 est.) 2.7% (2013 est.) 3% (2012 est.) (www.cia.gov) ​ ​ Transportation/ Exports/ Imports/ Further Breakdown Something that is important to know about Cuba’s economy is the amount of imports and exports from other countries and how efficiently goods are able to be spread across the country. Because we are Coca­Cola this is very crucial information to know as we need a reason to feel that our product/brand can be successful in Cuba. Of course Cuba is just recently becoming more available to the world market with some changes in the politics, our numbers may be a bit skewed, and we would argue that the export and import number will rise with the trades between Cuba and U.S. To know this we need to know how many different airports there are, ports, railways, roadways, waterways, etc. A few major sea ports include Antilla, Cienfuegos, Guantánamo, Havana, Matanzas, Mariel, Nuevitas Bay, and Santiago de Cuba. Cuba ranks 25th in the world in the amount of railways, which is a very good sign to create availability of transporting goods throughout the country. Cuba also ranks 43rd in the world in the amount of airports there are, which is another great sign for expanding Coca Cola into the region (cia.gov). A couple things that definitely need to be highlighted are the amount of exports and imports Cuba’s economy persists of and who they have been trading with. (Trading with Cuba is a recently new opportunity for the US). Imports: $14.7 billion (2014 est.) $14.77 billion (2013 est.) Where they rank in the world: 89 Imports ­ commodities: petroleum, food, machinery and equipment, chemicals Imports ­ partners: Venezuela 38.7%, China 9.8%, Spain 8.4%, Brazil 4.7%, Algeria 4.4% (2014) (cia.gov) Exports: $5.62 billion (2014 est.) $5.566 billion (2013 est.) Where they rank in the world: 112 Exports ­ commodities: petroleum, nickel, medical products, sugar, tobacco, fish, citrus, coffee Exports ­ partners: Venezuela 33.5%, Canada 15.9%, China 9.5%, Netherlands 4.5% (2014) (cia.gov) These numbers represent great opportunity for the US, especially a massive brand like Coca­Cola that has such an amazing customer base around the world and who has the ability to succeed in just about any country with the world class research and marketing and product representation. Cuba may not be the largest country in the world, but they are a very economically respectable country that Coca­Cola has not yet penetrated since the trade restrictions. Income Classes As far as income classes goes, Cuba is unique in that they have recently been working towards a more capitalist economy from a more communist type economy. Some individuals are in a position to take great advantage of the switch and then there are also individuals who are not in a good position to take advantage and this is creating great economic inequality (NY Times). This can be chalked up as economic “growing pains” in a way at a microeconomic level as citizens are adapting to the economic changes (www.cia.gov). This presents another great opportunity for a brand like Coca­Cola to expand into Cuba and create jobs for locals and help the stretch towards capitalism. More information about economic distribution will be revealed moving forward. Working Conditions 1. Salaries and benefits Minimum Wage: CUP 225 per month (source: ILO, 2011). ​ Average Wage: Average monthly gross earnings in Cuba is CUP 440 (USD 19). ​ Social contributions: ­Social Security Contributions Paid By Employers: Employer's contribution: 14% ­Social Security Contributions Paid By Employees: Employee's contribution: 0% I.