Theo's Adventure Capitalists: Can you sell Marmite to India?

Monday 10 May 2010, 14:05

Theo Paphitis Theo Paphitis Presenter

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The concept of Theo's Adventure Capitalists is: Can we do business abroad? Our great British nation who used to be fantastic international traders has really contracted back to our shores in the last century or so.

When we look at the state of the British economy, we're coming slowly out of recession, the pound's been bashed, we've got some difficult times ahead - it's easy to start becoming negative. But actually there's a massive positive.

And that is, if the pound is weak and we've got slow growth here, there's countries out there who still have got growth and our weak pound makes our products and services very attractive.

So that's one big tick in the box.

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Another is that 50% of UK plc's turnover (or Gross Domestic Product [GDP] in layman's terms) comes from small and medium sized businesses.

And 50% of all small and medium sized businesses fail in the first three years.

Now if we can give them a leg up with some guidance and finance, then we could gallop out of this recession. We just want small and medium sized businesses not to fail so dramatically. And we only need to do a tincy wincy bit.

With a little bit of growth from businesses abroad, we can replace all that consumer buying that is now lacking in the UK.

Doing business abroad sounds very attractive looking at it that way.

But of course, doing business in someone else's back yard can seriously get your butt kicked if you don't learn their culture. And it takes more than an airline ticket and a hotel room to do business abroad.

The show was made in partnership with the Open University, so it is a learning-based programme that had to be entertaining too. There's only a little bit of lecturing there, hopefully.

Something I preach when you start a new business is: homework, homework, homework.

Stack the cards in your favour. In a casino if you stack the cards in your favour, you get thrown out. In commerce it's called knowing your business and with it, you'll have a better chance of surviving.

You can't say "I'm going to set up in India or Vietnam or Brazil" from the comfort of your office. You need to get out there, smell it and see it.

Theo Paphitis sits next to a giant globe

I'll share a story with you about a lingerie business I was once involved in. We had a successful formula which worked all around the world so we set up a franchise in Saudi Arabia.

So, you have lovely lingerie on the shelves and on the peg and fantastic pictures of ladies wearing it, which you put around the store and in the window.

Wrong.

Because in Saudi Arabia, you can't have those pictures up on display - number one.

Number two: all the shop assistants are male because women aren't allowed to work.

And then, just when you think you've got enough problems, every time there's a call to prayer, all your staff walk out the store, leaving the tills and doors open to go and pray.

Even with all our homework, those were three challenges we only learned about by being in the country.

Now luckily, they have a pretty good honesty system in Saudi Arabia, which I won't go into, but nobody nicks the money. So there's a relief. We could never bring that business model back to the UK where you say, don't worry, leave the tills alone and go to prayers. But it it really does work in Saudi. They don't steal the money.

Now if you've only got male assistants, the ladies won't try the lingerie on, so you don't need changing rooms. The customers take it home to try on and you have to have a good returns policy.

And how do you deal with not being able to put pictures up? You do artistic line drawings which simulate the female form and put that in the window.

Theo Paphitis and Marmite's marketing manager, Cheryl Calverly, try giving away free samples on the streets of Mumbai

You have to have an open mind. Look at your product and think, how do you modify it to fit the market? Because you know what, it's really tough to change the market to fit your product.

That leads us onto episode two, where you'll see us trying to launch three products in India - luxury watches, biofuel and Marmite. I started off thinking I was a hater though since the show I've come round a bit. If I had been a lover of Marmite, I probably wouldn't have liked to see this next scene in the programme.

It was where we were on the streets of Mumbai, giving away free Marmite sandwiches. The people just hated them. This starving stray dog came up to me, and I thought, well I've got a whole tray of these things...

So I end up on my hands and knees and as I'm going forward to the dog to entice it to eat this sandwich, the dog instantly taught itself to walk backwards. It became a circus dog and as I went backwards, the dog came forward. In the end I left it on the ground for him. He sniffed it, backed off, cocked his leg and walked away.

Theo offers a stray dog a Marmite sandwich. The dog sniffs it before declining the offer

It's comical but that was a worry to me, I've got to be honest. Because if dogs won't eat it - who's going to? You'll see in the episode how we got through all the challenges.

The Marmite marketing team were fabulous by the way, and so they should be, being owned by Unilever and having the resources. Their venture partner in India thought Marmite wasn't a big enough product to try launching. Unilever deals with hundreds of millions of pounds of turnover with their washing powders and so on, and they didn't want to dilute their resources for a smaller product.

The marketing team decided to go ahead anyway. Marmite has a history of being commercial in varied ways.

In Sri Lanka, it sells very well as a drink you mix with a few local herbs - and it comes in powder form!

And during the First World War, Marmite was given to newborn British babies. It was sold as a food supplement for vitamin B. There's an old black and white ad I've seen around which says something like, "Have you got a disappointing baby? Feed it Marmite!"

Their marketing manager, Cheryl Calverley is exactly the person you'd like with you in the trenches. She has the right outlook in that she doesn't expect success or failure. For her, it's a scientific approach. If the samples weren't right, she wouldn't power on.

She's passionate, which is often something lacking in big companies. But she makes sure she still sees dangers and is prepared to rein back if the signs are there - some passionate people can't do that.

Entrepreneurs like me generally look at it differently. We look at the risk/reward ratio. My approach is gut reaction and experience. Sometimes I do things which have a chance of failure. I'm not afraid of failing.

Anyway, let us know what you thought of the programme - and if you've ever had a go at setting up abroad, let's hear your tips.

Theo Paphitis is the presenter of Theo's Adventure Capitalists.

The second episode, set in India, is broadcast on BBC Two at 8pm on Tuesday, 11 May. Episode one is available on iPlayer until Tuesday, 25 May.

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  • rate this
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    Comment number 1.

    Great program. I can visualise how the Marmite may be sold.
    The two gentlemen with the retail outlet are hampered by their inexperiance.
    The Guys with the "Green Diesel" need an education in some areas of business, no offense intended toward them.
    I agree with all the points that Mr. Paphitas raised and had cause for concern.
    The answer to the three businesses, problems is, Networking and flexible adaptability and as information is money. I should be charging a consultancy fee. I do not see these skills anywhere these days and I am only 49. It is nice to see them on the Television but what has happened to real business skills?
    I could sell anywhere or usually spot the angle of attack/approach that is required but I have limited mobility and no passport

    Looking forward to the next program.

  • rate this
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    Comment number 2.

    The importance of SMEs to the UK economy has been recognised by certain quarters, in addition they punch well above their weight in delivering tax revenue, ie they dont employ teams of accountants to minimise their tax liability. However it is very diificult for SMEs to tender for and win Government contracts (See Doug Richards School For Start Ups and The Entrepreneurs Manifesto- www.schoolforstartups.co.uk). Procurement departments put up huge barriers and spurious yardsticks that stop SMEs from winning contracts.

    By and large Government Procurement Departments evaluate suppliers in the order of

    Is their risk?
    Have they in place policies that for many SMEs are quite ridiculous?
    Is the price right?

    The quality of their ideas and possible contribution is the least important. To my mind this is completly the wrong way around.

    There are loads of initiatives being undertaken to assist SMEs; but they do not deliver what the SMEs want and that is business; the money spent appears to be wasted. What SMEs need is business and the Government should actively ensure some of their spend is placed with SMEs.

    That will help the economy get out of recession.



  • rate this
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    Comment number 3.

    Not knowing the cultural significance of words the Indian languages. I have come up with a wee ditty for Mr.Phaphitis that I hope is suitable. Its copyrighted as I have just posted it.This ditty would require further steps to obtain a market share.
    Dear Reactive Moderator, could you pass it to who you think is the appropriate person to utelize it.Would that be Mr. Phaphitis?
    Delete from here--- ( Reactive moderator. would appreciate an email if you think there is business to be had)--- to here.
    Cheers!
    Ditty

    Marmite,Marmite.
    You'll find the taste, right.
    It makes you bright.
    Marmite.
    Fight for your right,
    to parrty.

  • rate this
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    Comment number 4.

    Personally, my favorite place to travel has always been India. I believe that this destination has everything a traveler could want from a vacation. I first visited there in 2001 and I have been back many times since. My wife and I loved it so much that we even considered relocating once. All of my top five vacations were spent there and I am checking sites for vacation ideas like [Unsuitable/Broken URL removed by Moderator] to see which sites offer the best package deals. I live in cold, rainy England, so I can't wait until my next vacation.

  • Comment number 5.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
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    Comment number 6.

    This series is good entertainment, although it is a little concerning that what appear to be successful business people are under prepared or perhaps a little naive at what is entailed in entering a market in a developing country. Clearly though some of the participants in the series are adept at thinking on their feet and adapting to what they find on the visit to their target country.

    I have though found myself wondering why these companies do not appear, with the exception of yacht manufacturer entering Vietnam, to have hired or to be working with a person who has knowledge of doing business in the target country or region. I realise that these are tough times and headcount matters, but having right people in the right job can be the make or break of a risky market entry in a developing market.

  • rate this
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    Comment number 7.

    I don't understand why Bremont Watches went to India.

    In the 'what we already know about India and Indians' list is:

    They like gold, garish colours and bling.
    They haggle for... well, India!
    We [the Victorians] taught them bureaucracy and they multiplied the art ten fold.

    What the Bremont boys could have found out before even considering wasting their money [or the licence fee] on the airfare:

    India's luxury goods import tax [85% on watches!]
    What other taxes are applicable.
    Average price of luxury watches on sale in Indian shops.

    And on an aesthetic level, black PVD and stainless steel doesn't look as good on brown skin as gold does.

    All this is very basic stuff. So unless they thought having a BBC TV crew and Theo the Greek in educational mode, tagging along and gurning disapproval, represented a good possible PR move, I'm at a loss to know why they did it.

  • rate this
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    Comment number 8.

    Somewhat similar to Mr. Phaphitis, I believe sometimes a spade has to be called a spade and not an earth inverting horticultural impliment, it is a fact of business that C.Calverley was most aware.
    It is the application of practical realism from Mr. Phaphitis that
    makes the program,for me at least, alive and current.

  • rate this
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    Comment number 9.

    I am teaching at a Japanese university and planned to use this program for some at least close to real life experience for the students but unfortunately it is not possible to view the videos online. It says "not allowed in your region".
    Will this change at some point in time so that I can use it?
    What licensing agreement blocks online content for Japan?
    I am myself from Austria and have been teaching at the Open University as a professor. The high quality materials for teaching and high quality course are completely missing here in Japan.
    Your feedback is appreciated! Thanks

  • rate this
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    Comment number 10.

    I understand the moral Theo is driving at is, 'no amount of arm-chair research can replace the actual experience 'in' the market', but in the case of Marmite, Unilever could have easily market tested their product among the 4M-strong Indian population living in the UK. I agree East Ham in London would not have made great television, but conducting focus groups and checking out the shelves of 'asian' shops here, would at least mean that Unilever doesn't have to go to the dogs (stray ones at that)during recession.

  • rate this
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    Comment number 11.

    Hello everyone - thanks for your comments. I'm the editor of the TV blog.

    jjerlich - the best place to get advice on watching iPlayer is the iPlayer help pages: http://www.bbc.co.uk/iplayer/help.

    You can get a question answered there and contact the iPlayer team directly.

    Meanwhile, there's a page which I think answers your questions here:
    Can I use BBC iPlayer outside the UK?

    Cheers
    Fiona

  • rate this
    0

    Comment number 12.

    Does anyone know the brand of the sunglasses that Theo was wearing in the episode featuring Fairline Yachts? They looked really cool.

  • rate this
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    Comment number 13.

    @Headline Theo's Adventure Capitalists: Can you sell Marmite to India?
    --is Completely null
    and there is no need of a use of adventure here. The luxury is comes after need (meant the devoloping economical bold reaction promotes luxuary) less affected recession(economic) is a brightness.

  • rate this
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    Comment number 14.

    A shallow programme about a pretentious capitalist trying to help "upcoming businesses" exploit the markets of developing countries and ruin the countries further.Not to forget his regular reminder to the viewers that he is a "Millionaire". Shouldn't he be putting his time/money and effort into helping fight world poverty instead??

  • rate this
    0

    Comment number 15.

    Thoroughly enjoyed the program last night; but felt that Cadbury missed out on an obvious opportunity which would have been a 'nice' ending for the series. Would it not have made sense for Cadbury to adopt the DreamAid concept as a part of their CSR/offset arrangements? DreamAid would be able to take advantage of Cadbury's global marketing, distribution and logistics network to assist with order fulfillment, alongside Cadbury reflecting in the community and local entrepreneurial spirit that DreamAid provides.

    Just a thought...

  • rate this
    0

    Comment number 16.

    A great program!

    @jjerlich

    I used to represent for a British company with a venture partner in Japan. The Vietnamese episode particularly was heart felt for me. Very similar situation in Japan I thought. The business did not do too well all at the end with the partner as the directors respected the "Japanese way" of business beyond their usual instincts alarm them. I, from a Japanese point of view, even think they should have been a bit more assertive with a Western capitalist hat on. All at the end, they are playing the same game, to make money. Can't be too dissimilar in how to count money from one country to the other.

  • rate this
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    Comment number 17.

    Exellent program.
    Different culture but similar approach to the previous market.
    Nice to see the people from "sleek" doing a bit of networking. Proper networking makes a business or any other venture more likely to succeed.
    When is Mr. Phphitas going to do a program that shows fledgling British businesses how to network in a new environment?

  • rate this
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    Comment number 18.

    I enjoyed the programme - India lives by its own rules. Marmite was a safe bet to success though - it is a household name in Malaysia, which has a sizeable Indian population. Strong flavours are embraced in Asia.

  • rate this
    0

    Comment number 19.

    man,you should come to china,there so many legend entrepreneurs here,they build multi-billion business from nothing,for example tecent,found in 1999,now the company worth 40 billion,i am sure you can find some british try to do business in China,China ,Israle and US have the most companies in NASDAQ,talking about venture capitalist,you cannot miss those three countries

  • rate this
    0

    Comment number 20.

    The lessons communicated in Theo's shows are absolutely spot-on. Speaking as a professional consumer researcher and brand strategist, I just returned to London after 7 years in Asia heading up a team specialising in product and brand consumer research. Of course there's an element of luck involved in any business but for a foreigner to be successful, there's nothing like a detailed qualitative and quantitative understanding of your target market including particularly importantly, the cultural context, the language and how business is done. You've got to get a 'feel' for how things are and most importantly, how different things are. You wouldn't believe the time and money that gets invested by multinationals in getting their product and their product message right for each market... what works in one market, frequently doesn't work in another. Even then, multinationals have come unstuck as some insisted that a global product offer / brand positioning had to be consistent across different markets. As the man says above... homework, homework, homework... Good luck to anyone considering their first moves abroad.

 

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