Marketing Strategies for the U.S. Business in Cuba By: Chelsea Montgomery Marketing 4866 Executive Summary Cuba is an island about 90 miles off the coast of Florida that until very recently had severed diplomatic relations with the United States. Cuba is similar to the US in that they have a president and their executive branch consist of the Council of Minister and Council of State, Legislative would be the National Assembly of the People’s Power, but that is where the similarities end. Cuba is considered a communist country and women do not have any of the rights that American women do. For a business from the United States to succeed in the Cuban economy, there are many things to consider first. Marketing to a country that is so vastly different from our own is difficult to do. A company must gather all of the information possible about the country before they make their finale marketing decision, and that is what our team has done in this report. Everything from Cuba’s social structure to the average weather temperatures has been researched and marketing suggestions based off of the extensive research have been made. 1 Introduction Cuba is the largest, longest and most narrow island in the Caribbean. Cuba is mostly known for its cigars, rum, white sand beaches, as well as their mountains. Their main exports are sugar, nickel, seafood, citrus, rum, and tobacco products. Cuba takes higher education very seriously. They spend 10 percent of their central budget on education, which includes books and uniforms. This is one of the reasons Cuba is the most populous island in the Caribbean and home to 11 million people. Relevant History The U.S. claimed Cuba during the Spanish-American war in 1898. In 1902, Cuba gained its independence. In 1977, Cuba was split into 15 provinces. Cuba became a socialist state in 1961, which was also when all diplomatic ties between Cuba and the United States were cut off. In December of 2014, President Obama and the Cuban President Raul Castro, who came to power in 2008 when his brother Fidel Castro relinquished control to him, announced that they would finally begin normalizing relations between the two countries. While more than half of the population in Cuba consider themselves Catholic, although it is not common, other religions are practiced as well such as, Protestantism, Judaism, Islam and Jehovah’s Witness. Geographical Setting Cuba is made up of a group of islands 90 miles south of Florida in the northern Caribbean Sea where the Gulf of Mexico and the Atlantic Ocean meet. Cuba is the main island, the 17th largest island in the world by land area, and is surrounded by four smaller islands; the Colorados Archipelago, the Sabana-Camagüey Archipelago, the Jardines de la Reina, and the Canarreos Archipelago. Most of the island is south of the Tropic of Cancer, which gives it a tropical climate. The northeasterly trade winds blow year round which helps cool the island, and the Caribbean current brings in warm water from the equator. Cuba has a drier season from November to April, and a rainier season from May to October and the average temperature in January is 69.8 degrees Fahrenheit, and is 80.6 degrees Fahrenheit in July except in the mountainous areas on the southeastern part of the island. Social Institutions Family The nuclear family consisting of both parents and children are not considered the most common in Cuba. In a normal situation, the extended family lives under the same household as the nuclear family for a number of reasons. Extending meaning, grandparents, uncles and aunts, sometimes even the community. The reasons for this may vary. One in particular is housing shortage. Another reason may be because both parents’ work and someone needs to be home to watch the kids. Some families even choose to remain under the same household being divorced because the household is stronger with more people there to contribute and lack of housing elsewhere. Masculinity is the most dominant role in Cuba, specifically caused by the differences in personalities, duties, and sexuality. Because of the different organs obtained from birth distinguishing the difference from a male and female, their roles are very different and must be met. Women are expected to be very submissive. In other words, women are expected to be passive, meekly obedient, and conform to the authority of the man of the house. As little girls, women are looked at as angels, very gentle, taught to cook, clean, sew, and take care of the family. Young girls are always being watched to make sure they remain virgins being 2 that pre-marital sex is forbidden. Women are not allowed to vote and are restricted to the house in a sense. Women must breastfed their babies for the first few years. Boys are taught to be very strong and aggressive. Men work the fields and do a lot of outside work. Most men are taught to continue schooling well past trade school while women average around some level of grade school education. Extramarital sex is very common in men, but looked at shameful in women. Homosexuality is not allowed under any circumstance. Education Education is primarily taught in Spanish given it is Cuba’s primary language. The Castro Government mandates teaching of communism. Students are taught behavioral and psychological development. Specifically, “behavioral include aspects such as language, social skills and customs, whereas psychological aspects have more to do with values, belief systems, attitudes and preferences.” ● Education is compulsory, ages 6-16. Specifically, Kindergarten- Ages 4-6 ● Primary- (6-11) ● Basic Secondary (12-15) ● Upper Secondary or Technical Secondary (15-18) ● Universities Cuba has a literacy rate of 99.9%. Political System Cuba is considered a Communist State. It is similar to the U.S. in that they have a President and their executive branch consist of the Council of Minister and Council of State, Legislative would be the National Assembly of the People’s Power. They are considered the supreme body. They currently have 609 members who serve a 5-year term. They are elected directly by the people. The President is an elected position, which carries a term of 5 years, but there is no limit to how many terms a president may serve. The current President is Raul Castro. He is the brother and successor of Fidel Castro, who was President from 1976 until 2008. Transitioning from one to the other, Cuba has entered a new period of economic, social, and political transformation. Castro stated “it is time for the gradual transfer of key roles to new generations.” The national Assembly of the People’s Power is now more diverse with delegates that are younger and represent more trade, medicine and cultural positions. President Castro has announced that he will retire by 2018 and naming a possible successor of someone that was born after the Cuban revolution. Cuba is organized into 14 provinces and 169 municipalities. The provinces are governed by a provincial assembly of 75 members- 5-year terms, which elects a committee whose president functions as the governor. An assembly – 2 ½ year term, which elects a committee whose president functions as the mayor, governs the 169 municipalities. The only recognized political party in Cuba is the Communist party. It is the largest party and is considered to be the leading force for society and State. For many decades it was a major part of everything in Cuba. By 1993, the Communist membership was no longer a requirement for delegates. Still a strong force but Cuba is in transition under a new leader moving to a new generation. Cuba’s government has held stable for many decades with working trade agreements with Russian Federation and South American countries. The transitioning will have its trials and turbulences as events of other nation’s government change and progress. In the global scheme of things, the United States is important to Cuba but as for the United States, Cuba is of little 3 importance since there was no longer a global communist threat at the time, situations change. Cuba’s legal system is comprised of municipal courts, provincial courts and military courts. The People’s Supreme Court is the highest court and the last resort that hears appeals from the lower courts. It is organized into five chambers: criminal, civil and administrative, labor, state security, and military. The constitution theoretically provides for independent courts, although it explicitly subordinates them to the National Assembly, the Council of State, and ultimately the Communist Party. The Minister of Justice exercises administrative control over all the courts, but the Communist party controls all government positions, including judicial offices. Cuba is not trying to create a society in which neither class, occupation, income, race, nor sex will define social opportunities. They are more of a socialistic society. The government largely controls Cuba’s business. Their business practices are largely informal. A few basics, they greet each other with a handshake. Exchanging business cards when first meeting is considered important. It is respectful to use professional titles and in conversations to have good eye contact. Business environment is one that stresses the importance of personal relationships in business networking. Business dress code has become more informal, suits and sport coats for men, women in pantsuits or skirts. Religion and Aesthetics Cuba is a multiracial society with a population of mainly Spanish and African origins. The largest organized religion is the Roman Catholic Church. Afro-Cuban religions, a blend of native African religions and Roman Catholicism, are also widely practiced in Cuba.