CubaNews / June 2007
By Larry Luxner
A Puerto Rico-based market research firm has teamed up with a Dominican partner to conduct consumer surveys in Cuba four times a year.
Gaither International, headquartered in San Juan, and Horwath Consulting of Santo Domingo, will offer the detailed data gleaned from its surveys to U.S. firms eager to trade with Cuba.
The project will begin later this month, with initial results ready sometime in August, according to Gaither International’s president and CEO, Oscar Castro.
“We absolutely trust the data because one of the key issues, prior to making the decision to go ahead with this study, was the experience Horwath has in Cuba with these re-searchers,” Castro told CubaNews in a phone interview from San Juan. “They’ve been doing research in Cuba for many years now, and the Cuban market is more sophisticated than what many people think.”
According to Castro, the survey initially will focus on four areas: Ownership of household items like refrigerators, cars and phones; awareness and use of products in 50 categories such as shampoos, detergents and pasta; buying habits, such as frequency of shopping trips, and brand awareness.
Castro said Gaither has been working with Horwath for over 10 years on regional accounts such as Exxon-Mobil Latin America.
The idea for this unusual collaboration, he said, came about after Gaither received requests from some long-term clients about the potential for entering the Cuban market.
“We knew that Horwath had been doing some research, we decided why not come up with a syndicated study, something very basic, since there’s not much data about the Cuban consumer,” Castro told us.
“We cannot [conduct research in Cuba] because Puerto Rico is part of the U.S., but they can,” he said, referring to Horwath’s Dominican subsidiary.
It was unclear, however, exactly how Horwath is allowed to conduct its field work in Cuba, given that its parent company, Horwath International, is headquartered in New York.
At any rate, Castro said that Horwath’s D.R. office employs University of Havana students to conduct actual interviews, in cooperation with the Cuban government.
“Once they finish the field work, they send the completed questionnaires to the Dominican Republic,” he said, estimating the project’s initial cost at no more than $100,000. “Horwath will be responsible for the field work and the collection of data, and we will be doing the marketing of the study in the United States,” he said.
Castro declined to identify actual clients, though he hinted that likely purchasers of the study would include Fortune 500 companies in personal care and consumer goods.
“With this study, many U.S. companies will be able for the first time to attain a basic understanding of the average Cuban family,” Castro told the South Florida Sun-Sentinel, noting that in the 1950s, Cuba relied on the U.S. for most imports and served as a key test market for American products.
With salaries averaging only $15 a month, families must rely on ration books to buy basics such as rice and beans at heavily subsidized prices at state bodegas. Other government stores offer branded toothpaste, beer and other items at U.S. prices, high by Cuban standards.
As a result, most Cubans must turn to the black market to make ends meet, sometimes bartering goods stolen from the state.
According to the Sun-Sentinel, “many old-timers recall U.S. products popular before Cuba’s 1959 revolution, such as Chevrolet cars and Uncle Ben’s rice, known as “Tio Ben.” And youth recognize brands worn by tourists, featured in U.S. movies shown in Cuba or sent from relatives abroad.”
Despite those who question the value of consumer studies in a place like Cuba, where people cannot speak freely, Gaither’s top executive said the study offers a starting point to understand a nearby market that could be worth billions of dollars a year for U.S. companies someday.
“Once the economy opens,” Castro said, “Cubans are going to buy.”