So the Apprentice is back on BBC TV here in the UK and amid the egos and the back stabbing there are already plenty of business lessons in evidence. There are so many fundamental mistakes that I wonder how many, if any, of the candidates have ever considered any basic business concepts.
Today’s task was to design and sell a new beer. Pale Ale (Photo credit: Wikipedia)
Today’s episode showed the two teams charged with developing, marketing and selling a new flavoured beer. The team which made the most money would win. This was a great task in that it required the application of all of the 7Ps of the marketing mix:
- Physical Evidence
So let’s see what we can learn about the 7Ps from today’s episode:
One idea that Team Evolve considered was a beer for the female market. Fortunately the women in the team quickly made it known that that was a bad idea. Women do not drink beer in large enough quantities to support a beer designed for that market, those who have tried have failed.
Lesson: Our products must always be something that enough customers will want to buy often enough for us to stay in business.
Team Endeavour tried to sell their beer at a premium price at a St. Alban’s beer festival when all of their competitors were undercutting them. Whilst there was some logic to their strategy given that their bottles would potentially be collectors’ items ultimately this decision probably cost them sales. On the other hand their starting point in trade negotiations was too low in comparison to their cost price leaving them with little scope for profit when the trade buyers negotiated hard.
Lesson: Expect trade buyers to be tough negotiators and be really aware of your cost price and margins. Start high enough to give you room for negotiation. If you are going to charge a premium price for a product make sure that prospects understand and want the added value.
Team Evolve lost because they didn’t sell in the right places. They relied too heavily on a pub based beer festival where their just weren’t enough customers and then moved to a wine bar on the river. Really! If people wanted to drink beer they wouldn’t be sitting in a wine bar.
Lesson: The right location is vital. You have to be selling where there are enough of your target customers with money to spend. People will not go out of their way to buy from you.
Promotion wasn’t a key test in this episode and, with professional help, both teams came up with decent branding ideas for their product. However I have to wonder about the wisdom of calling a beer ‘A Bitter this’, plays on words can backfire. Team Endeavour did recognise that punters at the beer festival might be willing to pay a premium price for a bottle of beer which would be likely to become a collectors’ item.
Lesson: Get professional help with branding. Understand your target market and promote your product to meet their needs and interests.
Both teams had dissent in their ranks. I suppose that is inevitable in a competition where there can only be one winner but internal arguments gave potential buyers a very bad impression of each team and in some cases allowed buyers to negotiate even harder.
Lesson: People buy people. Everyone in a customer facing role has to be professional and a team player. Ground rules and operating procedures must be agreed and adhered to by all team members and debates and arguments kept away from customers and prospects.
In fairness, when teams are developing product for a one off sale there really isn’t a lot of process involved. However one team did recognise that their trade customers would want pump clips to advertise the beer and provided them.
Lesson: Process is about setting up our businesses to serve our customers easily and without delay. It’s about recognising their needs and meeting them.
How can you expect to sell barrels of an unknown beer to the trade without offering the buyer the chance to taste the product? Yet this is what team Endeavour tried to do. They went on a selling mission without samples and unsurprisingly were treated with disdain.
Lesson: Buyers want proof. They buy with their senses, sight, smell, taste, touch and sound. Samples are vital. Where people can’t sample the product, for instance when buying on the Internet, then testimonials and guarantees are essential.
So there we have it, a complete lesson in the marketing mix from one episode of the Apprentice. It will be interesting to see whether the candidates will have learned these lessons as the series develops. Time will tell.