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Slowly, Cuba Is Developing an Appetite for Spending

July 6, 2013 by Leave a Comment

“This is novel — at least in Cuba,” said Mr. Alejandro, 33, who on a recent evening was waiting to see his second 3-D movie, “Journey 2: The Mysterious Island.”

“If people have a little more money to spend, they look for ways to spend it,” said Mr. Alejandro, who works at a state-owned recording studio by day and builds Web sites for his own clients by night. “Now, you have a few more options for going out and entertaining yourself.”

Mr. Alejandro is part of a small, but increasingly visible, consumer class in Cuba whose appetite for luxuries, albeit modest ones by American standards, has caught the eye of the island’s entrepreneurs.

Some savvy businesspeople are transforming their homes and garages into small movie theaters, others are renting out swimming pools or opening sports bars, cafes with video games, carwashes and even pet-grooming shops.

“It’s not consumption as such — not yet,” Mr. Alejandro said. “It’s the seed of consumption.”

People like Mr. Alejandro are strictly a minority in Cuba, where the state pays its four million workers an average salary of $19 a month and pensioners receive just over half that. Though they get food rations, health care, and, in many cases, remittances from relatives or money from black-market trade, most Cubans live humbly, with even toilet paper a luxury.

A woman who requested that she be identified only by her first name, Yunesky, said her husband’s salary of $80 a month as a private security guard was barely enough to cover food, soap and detergent for her family of five.

“A 3-D movie? No, no,” she said, pointing to her two daughters and her grandson. “I can’t even afford to buy them an ice cream.”

But the number of Cubans who have spending money has grown over the past four years, as President Raúl Castro opened the economy to limited nonstate business and farming.

Today, about one million Cubans, or 9 percent of the population, work or farm in the private sector, up from about 600,000 in 2009, according to government statistics.

At the same time, new markets for used cars and houses have flushed money into the system, economists say, while the Cuban diaspora has pumped cash and goods into businesses.

The new entrepreneurs and farmers have joined the others who make up Cuba’s peculiar consumer class: waiters, artists, musicians, black marketeers, corrupt government workers and a clutch of longstanding business owners.

And they are spending more and more openly.

On an island where everyone is supposed to be equal, the privileged often keep a low profile, building scruffy walls around a well-appointed house, say, or drinking beer in their living rooms rather than in the local bar.

But that is changing, said Liván Beltrán, 47, who two months ago opened a carwash and a diner in the yard of his house. There, he cleans 60 cars a day, the majority belonging to Cubans, for $3 to $7.

Mr. Castro has repeatedly railed against egalitarianism, which he loosely defined as one worker loafing while another works hard. Cuba must strive for “a society that is less egalitarian, but more fair,” he said in a speech to the National Assembly in February.

Soon after taking office in 2008, Mr. Castro opened the way for more consumption by allowing Cubans to stay in hotels for the first time and to buy mobile phones and laptop computers.

Since then, the economic overhauls have legalized many businesses that formerly operated underground and have reduced the stigma attached to having money, Mr. Beltrán said.

“The question is not whether there are Cubans with money,” said Mr. Beltrán, gesturing at the Cubans and foreigners sipping beer while his workers sprayed their cars with power hoses and vacuumed the interiors. “It’s where do you spend it? How do you spend it?”

With ease, apparently. Figures published by the National Statistical Office indicate that nearly 1.5 million Cubans stayed at hotels or spent money on tourist activities in 2012, up from 1.3 million in 2011. A worker at a hotel sports club, where monthly membership costs about $50, said the ratio of Cuban clients to expatriates had risen significantly over the past three years.

Article source: http://www.nytimes.com/2013/07/07/world/americas/slowly-cuba-is-developing-an-appetite-for-spending.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

On Social Media: How the Toilet Paper Entrepreneur Branded Himself Too Well

August 29, 2012 by Leave a Comment

On Social Media

Generating revenue along with the buzz.

Mike Michalowicz may have branded himself too well.Courtesy of Mike MichalowiczMike Michalowicz may have branded himself too well.

When Mike Michalowicz published a book in 2008, he was looking for a name that would stick. He chose: “The Toilet Paper Entrepreneur.”

He wanted to tie the concept of doing whatever it takes to succeed in business to an everyday object. He chose toilet paper because he figured people would remember it. “Everyone has been stuck without toilet paper at times,” he said, “but we all find a way to survive. That is how entrepreneurship is — you often get stuck with your pants proverbially around your ankles”

Initially self-published, the book was later republished by Harper Collins, and people did remember the name. In fact, it stuck too well. “People couldn’t remember who I was,” said Mr. Michalowicz. “They called me the Toilet Paper Guy. The T.P. Man. Few knew my name.”

As it happens, his real name is hard to spell and hard to pronounce (it’s mi-CAL-o-wits) and something people had struggled with almost all of his life — even after he became an entrepreneur at 24, starting and building three companies with no outside investment money. He sold two of them — Olmec Systems to a private equity firm in 2002 and PGLA to Robert Half International in 2006 — and is now running his third, Provendus Group, a consulting firm that helps companies whose growth has stagnated.

One of the cool things about social media marketing is that you can build a brand with pretty much any name you want. In Hollywood and in marketing, you can always give yourself a new name, and for Mr. Michalowicz, Toilet Paper Entrepreneur was it. Once his book was finished, he pulled together a two-person team, his executive assistant from his first company and a recent college grad who was adept at social media and e-mail marketing. They created the Toilet Paper Entrepreneurs Facebook group, and he defined the criteria to join the group: “This is what made you a T.P.E.: You don’t believe in looking for money to start your business. You are doing something you really believe in. You don’t believe in business plans — three sheets is all you need.” Then he and a few friends invited their contact lists to join the group, and it had nearly 1,700 members the week it made its debut.

He then created his Twitter handle, @TPEntrepreneur, which he has since changed to @MikeMichalowicz, and established a daily blog. He enjoys making jokes, mostly at his own expense, and takes a just-say-it approach to social media, which his fans seem to love. “I like to keep things real and I love to joke around,” Mr Michalowicz said. He said he never promised get-rich-quick schemes, “because it doesn’t exist, and I am always making jokes about entrepreneurial situations and myself.” He shares information on his blog, but his community members also learn from each other.

The T.P.E. community started treating his blog posts like appointment television. Every time a post went up, one of his team members would blast out an e-mail to the Facebook group sending them to the blog. Visitors would see a pop-up ad within five seconds of arriving that invited them to download free book chapters.

Every Wednesday his blog featured an “On the Roll” video to answer questions from his community or offer business tips. He would always do something funny or some kind of stunt at the end of the video. He also used the Web site Help A Reporter Out to solicit content for his blog. He regularly posts questions on business topics and then curates answers from his loyal readers and other small-business owners to create a blog post. He hired a coder to build a simple system that allows followers to submit business tips, Web site links and a head shot directly into a database for his blog posts. This saves him lots of time and lets him turn all of these submissions into one massive post with 50 to 100 contributors. Here’s an example of one he did on contest ideas for promoting small businesses.

Once the post was published, an e-mail would go out to all of the people who submitted telling them that they were on his blog that day and asking them to help get the word out. The e-mail would include language to tweet or to use in a Facebook post, and he always invited readers to put the post on their blogs, too. He did this to build links, Google ranking and traffic. He also used a marketing tool to create pop-up ads on his Web site that invited people to subscribe to his blog and join his e-mail list.

Before long, he was getting 1,000 visits a day. At its peak, the blog attracted up to 70,000 visitors a month and his e-mail list now has nearly 15,000 names. He makes money through his membership club, book sales, speaking engagements, sponsorships, and consulting.

But now, four years later, he has decided he wants to teach people his real name. “Being the Toilet Paper guy helped people get past having to pronounce my name, but at the same time, it painted me in the corner of potentially having to stick with toilet paper for the rest of my life,” he said.

So now, he’s actually trying to kill the T.P.E. brand. “The brand became so strong, so fast, that people call themselves T.P.E.ers,” he said. “I love that, but I recognize it needs to change. I decided I have one shot at having my own name be the brand and it was now or never, so I’ve started pushing Mike Michalowicz for everything I do.”

As part of the plan, he is releasing a new book with a new metaphor under his own name. In “The Pumpkin Plan,” Mr. Michalowicz writes about his own business struggles, feeling like a hamster on a wheel trying to grow his business, until he decided that pumpkin farmers, the kind that grow record-breaking pumpkins, hold the secret to entrepreneurial success. “When you focus on growing one pumpkin exclusively, it can grow to colossal size,” he said. “When you spread seeds everywhere and try to grow everything, the only guarantee is you will never grow something to colossal size. The formula is basically seven steps from selecting a seed, to watering properly, to managing the root, to over-the-top attention. And while some times colossal businesses don’t come from it, the formula is sound.”

It’s the same formula he is using to build his new identity.

Melinda Emerson is founder and chief executive of Quintessence Multimedia, a social media strategy and content development firm. You can follow her on Twitter.

Article source: http://boss.blogs.nytimes.com/2012/08/22/how-the-toilet-paper-entrepreneur-branded-himself-too-well/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

Greeks Reeling From Health Care Cutbacks

December 27, 2011 by Leave a Comment

Four days earlier, she had run out of insulin and, without insurance and unable to pay for more, she had gone from drugstore to drugstore, pleading for at least enough for a few days. It took her three hours to find a pharmacist who was willing to help.

“I tried a lot of them,” she said, gazing at the floor.

Greece used to have an extensive public health care system that pretty much ensured that everybody was covered for everything. But in the last two years, the nation’s creditors have pushed hard for dramatic cost savings to cut back the deficit. These measures are taking a brutal toll on the system and on the country’s growing numbers of poor and unemployed who cannot afford the new fees and co-payments instituted at public hospitals as part of the far-reaching austerity drive.

At public hospitals, doctors report shortages of all kinds of supplies, from toilet paper to catheters to syringes. Computerized equipment has gone unrepaired and is no longer in use. Nurses are handling four times the patients they should, and wait times for operations — even cancer surgeries — have grown longer.

Access to drugs has also been affected, as some drug manufacturers, owed tens of millions of dollars, are no longer willing to supply Greek hospitals. At the same time pharmacists, afraid that the government might not reimburse them, are asking for cash payments, even from those with insurance.

Many experts say that Greece’s public health system was bloated and corrupt and in dire need of reform. But they say also that the cuts have been so deep and have come so fast, that they have hit like a tsunami.

In just two years, the government has cut spending on health care to $17 billion from $19.5 billion — a 13 percent decrease. And under its agreement with its creditors, Greece must find even more health care savings next year — as much as $915 million, government officials said.

At the same time, public health facilities have seen a 25 to 30 percent increase in patients because so many Greeks can no longer afford to visit private clinics.

Dr. Olatz Ugarte, an anesthesiologist at the Saint Savvas Cancer Hospital in Athens, said that breast cancer patients often have to wait three months now to have tumors removed. “Waiting that long can be life or death for these patients,” she said.

In a recent letter to the medical journal The Lancet, a team of English researchers warned that a “Greek tragedy” could be in the making, pointing to rising suicide and H.I.V. rates and deterioration of services at hospitals under financial pressure. “In an effort to finance debts,” the researchers said, “ordinary people are paying the ultimate price: losing access to care and preventive services, facing higher risks of H.I.V. and sexually transmitted diseases, and in the worst case losing their lives.”

At the Perama clinic, which is run by the international nonprofit Doctors of the World, doctors say they are seeing many families that cannot afford bus fare, let alone the new $6.50 fee at public clinics.

Technically, those Greeks who cannot pay are entitled to free care. But the bureaucracy can be overwhelming. Ms. Ragamb, a former hairdresser whose unemployment benefits and health insurance ran out six months ago, said she was still waiting to get the right papers.

The story did not surprise Dr. Liana Mailli, the pediatrician who was seeing Ms. Ragamb’s son, Elias. The 3-year-old got a diagnosis of diabetes only a few months ago, after he fell into a coma. Dr. Mailli has heard of such bureaucratic troubles from many patients. Even more often, she said, parents have fallen behind in paying their health insurance contributions, or their employers do not pay and so they are no longer covered.

One development that Dr. Mailli said she found particularly disturbing was that a growing number of children had not had their basic vaccinations.

If nothing is done, she said, polio, diphtheria and whooping cough could all return to Greece. “This is such a serious thing,” she said. “But these vaccines are expensive.”

At the start of its debt crisis, Greece was spending about 6 percent of its G.D.P. on health care — about average for Europe. But the system was far from efficient. It includes many small hospitals and a reliance on expensive brand name drugs.

Moreover, there was widespread corruption. Experts say doctors often had lucrative deals with drug manufacturers that led them to vastly overprescribe, and many expected cash payments on the side for timely and attentive care.

Since the debt crisis began in 2009, the government has frozen hiring, cut salaries and focused on tracking prescriptions and new procurement procedures. About 20 doctors have been arrested for corruption.

But little has gone smoothly.

Government officials acknowledge some problems, but say that the system was simply unsustainable. In the next year, they say, adjustments can be made.

“We have had two years of emphasis on the financial, now we will pass to evaluation,” said Nikos Polyzos, the secretary general of the Health Ministry.

But many doctors say the new emphasis on cutting costs has gone too far. In addition to shortages, they say that the supplies they do have are of poor quality. They complain that bugs have been found in new syringes imported from China, sutures fall apart and generic drugs do not seem to do the job. And the hiring freeze has caused such a shortage of nurses, some doctors said, that procedures frequently have to be postponed.

Dimitris Bounias and Nikolas Leontopoulos contributed reporting.

Article source: http://www.nytimes.com/2011/12/27/world/europe/greeks-reeling-from-health-care-cutbacks.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

As Consumers Cut Spending, ‘Green’ Products Lose Allure

April 22, 2011 by Leave a Comment

Sales that year topped $100 million, and several other major consumer products companies came out with their own “green” cleaning supplies.

But America’s eco-consciousness, it turns out, is fickle. As recession gripped the country, the consumer’s love affair with green products, from recycled toilet paper to organic foods to hybrid cars, faded like a bad infatuation. While farmers’ markets and Prius sales are humming along now, household product makers like Clorox just can’t seem to persuade mainstream customers to buy green again.

Sales of Green Works have fallen to about $60 million a year, and those of other similar products from major brands like Arm Hammer, Windex, Palmolive, Hefty and Scrubbing Bubbles are sputtering. “Every consumer says, ‘I want to help the environment, I’m looking for eco-friendly products,’ ” said David Donnan, a partner in the consumer products practice at the consulting firm A. T. Kearney. “But if it’s one or two pennies higher in price, they’re not going to buy it. There is a discrepancy between what people say and what they do.”

For instance, a 32-oz bottle of Clorox Green Works All-Purpose cleaner is $3.29 at Stop Shop. A 32-ounce bottle of Fantastik cleaner, by contrast, costs $2.89.

Indeed, outside a Whole Foods Market in the Chicago suburb of Evanston, June Shellene, 60, said she did not buy green products as often as she did a few years ago.

“People are so freaked out by what is happening in the world,” she said, before loading her groceries into a Toyota Prius. Of green products, she said, “That’s something you buy and think about when things are going swimmingly.”

Sales in most consumer-products categories dropped off during the recession. But according to an analysis by Sanford C. Bernstein Company, certain green products have fared worse.

“You see disproportionately negative impact from products like Green Works, out of the big blue-chip companies that have tried to layer a green offering on top of their conventional offering, and a relatively better performance from the niche players who remain independent,” said Stephen Powers, an analyst at Bernstein. Using data from the Nielsen company, Bernstein looked at sales for nearly 4,300 items in 22 categories, like cleaning spray, liquid soap, bathroom cleaners and detergents. It studied monthly sales from March 2006 to March 2011, the most recent data available. (Nielsen’s data includes mass market, grocery stores and drugstores but excludes Wal-Mart.)

Bernstein found that the market shares of green products generally were down from their peak — especially those offered by the big consumer-products companies. But the market share of the independent brands, like Method and Seventh Generation, is starting to increase relative to the shares of traditional brands’ green products in categories where they compete.

“In terms of the big players like Clorox, there’s no doubt that they’ve de-emphasized the brands relative to their early aspirations, and that’s reflective of what they are seeing from the consumer,” Mr. Powers said.

Green products are more expensive because the ingredients tend to cost more than their more conventional counterparts, and transportation costs are higher too because they are sold in smaller volumes than the big brands.

Green household products took off in the 1980s, with brands like Seventh Generation and Simple Green, which have gained a loyal following. As retailers like Whole Foods expanded in the 1990s, interest in the environment increased and competitors joined the fray.

Predicting that the market would continue to increase, mainstream manufacturers like S.C. Johnson, Clorox and Church Dwight introduced eco-friendly versions of their products around 2008.

But after an initial lift, sales largely dropped off, and the introduction of products slowed during the recession.

Article source: http://feeds.nytimes.com/click.phdo?i=f9dd192a2ea3cbe2a8a200458c8447a8

Filed Under: Business News Tagged With: , ,

Your Money: Adding It Up: Amazon Ship vs. Costco Shop

April 2, 2011 by Leave a Comment

Amex has a couple of different Costco-branded credit cards. The ones currently available to new customers earn 2 percent back on all travel purchases, 3 percent on all restaurant charges and at least 3 percent on gasoline (at any station, not just Costco ones) up to certain annual spending limits. Plus, you get 1 percent cash back for spending everywhere else.

The check arrives attached to the bill for February, but it comes with a catch: You have to go to Costco to redeem it. You can just collect cash, turn around and walk out. But Costco is clearly hoping that most people will see the check as a good excuse to go shopping right then and there. And that’s what most people seem to do.

I have this card and love it. But I’ve also begun to question the value of the time it takes for an expedition to one of these stores. And if you shop at Sam’s Club or BJ’s, Costco’s competitors, you may be wondering, too.

After all, the older you get, the more valuable your time seems. And going to Costco, even though it’s just a couple of miles from my home, is generally a two-hour round trip by the time the driving, the shopping, the waiting in line, the loading of the car and the unloading back home are done.

In 2007, meanwhile, Amazon.com introduced a service called Subscribe Save. The premise is simple: If you agree to get a recurring shipment of an item, Amazon will cut 15 percent off its normal price and send it to you every one, two, three or six months without charging the standard shipping rate. So I subscribed to toilet paper, which makes for a great story and good fun for children when three months’ worth arrives and become a temporary tower or a fort on the living room floor.

Ever since the toilet paper subscription (and later, the paper towel one) started coming, I’ve wondered what it would be like to subscribe via Amazon to everything I get at Costco and never set foot in the place again, except to cash my check each year.

So this year, $304.50 refund check in hand, I went to Costco with a list of items that most households need to replenish every so often. I recorded the prices. Then, I compared them with identical items at Amazon, looking in particular for the ones among the 40,000 or so that are now available for subscription.

My guess is that many Costco customers would find that any savings they gain by shopping there is eliminated and then some when they consider the value of the time spent going to and fro many times a year. That’s time they would win back if they subscribed to those same items at Amazon and then never had to think again about running out of them.

My Costco list included the following: Huggies diapers, Tide powder, Bounty paper towels, Swiffer refills, Clorox wipes, Ziploc sandwich bags and enough Duracell batteries to power multiple electronic devices for many months.

There was also Dove soap, Lubriderm lotion, Tampax, Mach 3 Turbo razor blades and enough house brand ibuprofen to kill off hundreds of headaches, among other things.

Then, I spent some time on Amazon’s site and recorded the per unit price for each of these items. Almost all were available at the discounted subscription price, which manufacturers help Amazon pay for (so excited are they by the idea of a recurring pipeline into people’s homes and wallets).

Setting up Amazon subscriptions for the first time probably takes about as much time as a round trip to Costco. But, according to Doug Herrington, vice president of consumables for Amazon, many people start with just a few items. “They add over time,” he said. “They start with one big schlep factor, like toilet paper or diapers.”

Over time, you may need to adjust your delivery dates So what does that 15 percent discount get you? My sample basket of goods, enough for a three-month supply for a family of four, cost $251 at Amazon. At Costco, it was $208, representing a 17 percent savings.

Costco was tied or cheaper on every item, occasionally by a lot. Amazon, for instance, isn’t competitive on large containers of cleaning liquids of various sorts, since it’s just too expensive to ship those sorts of things.

Article source: http://feeds.nytimes.com/click.phdo?i=0a79f26d7a5255a28ba1dff2d00b8d96

Filed Under: Your Money Tagged With: , ,