STOP CUBAN CHARADE;LOW PRICES

Published on .

When two kennedy sons and nephews journey to Cuba to talk to the former nemesis of their father and uncle, and the U.S. is reportedly spending $23 million on a new 12-story U.S. Interest Section in Havana and marketers are able to ship products to Mexico under Nafta, after which they're exported to Cuba-then it's just a matter of time before the just-tightened U.S. embargo is lifted.

Cuba's ill-advised downing last month of two U.S. civilian planes-and the resulting increased restrictions-probably will delay but not detour the U.S. from the direction it continues to head.

From Canada to Mexico to South America to Europe, countries are doing business with Cuba, sending tourists there, receiving millions in advertising media buys (most notably in Canada and Brazil), while the U.S. honors a three-decades-old policy. Meanwhile, the U.S. has even lifted its embargo against Vietnam.

Cuba's market of 11 million-plus people is heating up. Earlier this year, Fidel Castro signed a deal with Paris-based Club Mediterranee to open a resort east of Havana next winter. Spanish companies are reportedly investing heavily in Cuba. Even U.S. companies are able to crack the ban a bit, with fine print on visas now giving permission for people interested in investing in the telephone system.

Cuba is a significant part of Latin America-one that cannot be ignored. Many speculate that no matter who wins the U.S. presidential election in November-and despite the repercussions from the downing of the planes-the embargo will soon after be lifted.

We believe it's time.

Everyday low pricing has finally arrived in Europe. And not a moment too soon.

The world's largest advertiser, Procter & Gamble, invented EDLP in the U.S. five years ago to enhance brand loyalty, cut costs, and end the wild price fluctuations caused by price promotions.

In Europe's cutthroat retail market, deep discounters and supermarkets' own brands keep gaining share. These days, 44% of West German consumers say they take home the cheapest product they can find, according to WPP Group's economic forecasting unit The Henley Centre. And 53% of U.K. consumers surveyed by Henley believe retailers' own brands are just as good as those of major marketers.

Not welcome news for international marketers.

Now P&G's former chairman-CEO Edwin Artzt, in his new role of global marketing adviser, is working with Italian pasta marketer Barilla to bring EDLP across the Atlantic, slashing Barilla's prices by an average 12% this month and axing giveaways like free pasta pots.

P&G, which has tried EDLP with a few UK products, is about to make its big EDLP move in Germany. Prices will drop across the board, backed by a P&G-financed ad campaign with retail partners. Ads themed "These top brands bring you more power" will back the price cuts.

The move to EDLP is not universally popular, especially with retailers who want the promotion dollars. Germany's $25 billion Rewe supermarket chain has already retaliated by throwing all P&G's products off its shelves. But consumers would rather have lower prices than those extra pasta pots.

In this article:
Most Popular