The Apprentice S10 Ep3: Kicking up a stink

Both teams hoped to savour the sweet smell of success in this week’s home fragrance task making and selling reed diffusers and candles, but instead we again saw two candidates’ hopes snuffed out in a close contest between two distinctly different strategies.

The sight of these three is enough to reduce candidates to tears – well, it is if you’re Lindsay (Image: BBC)

Arse (covered or otherwise)

Sell for profit, rake it in

James gets sales but not the win

Lindsay finds it all too much

While Nurun lacks the selling touch

The teams are summoned to the Royal Exchange in the heart of the City, home to luxury goods brands such as Tiffany, Montblanc and Gucci. (Last week’s firee Robert Goodwin would probably still regard it as cheap, tatty and beneath him, though.). Lord Sugar asks them to create designer home fragrance products – scented candles and reed diffusers – for sale to both trade and general public. He notes pointedly that this task is all about profit, on which basis victory will be determined.

Did you hear that, candidates? Profit. Not sales. P-R-O-F-I-T.

With the boys now outnumbered ten to seven, Sugar engineers an Apprenti-Shuffle, moving Steven Ugoalah, Daniel Lassman and Felipe Alviar-Baquero to Tenacity alongside Ella Jade Bitton, Jemma Bird, Katie Bulmer-Cooke, Lauren Riley, Pamela Uddin and Sarah Dales. Meanwhile Lindsay Booth, Roisin Hogan, Nurun Ahmed and Bianca Miller join forces with James Hill, Mark Wright, Sanjay Sood-Smith and Solomon Akhtar on Summit. (Got that? There’ll be a test later.)

Katie, who buys a lot of this type of product, volunteers as Tenacity’s project manager, while Roisin, who thinks her skills as an accountant will be useful in a profit-driven task, leads Summit. The two drive markedly different approaches: while Katie wants to keep things relatively inexpensive, Roisin is all about creating an expensive-looking brand.

Katie put her personal experiences of this week’s products to good use (Image: BBC)

As the PMs start to select sub-teams, Nurun states that she’s not confident about creating fragrances – to which Bianca dismissively observes “we can all smell”. This is the same Bianca who last week needed to be told that solar panels won’t work if they’re underneath a jacket. Pot, kettle.

Roisin adds that she doesn’t want anyone on her team covering their arses. Sanjay breaks into a grin, possibly daydreaming of uncovered arses. He’s also pleased to see off who he considers to be the three weakest boys (Steven, Daniel and Felipe). And if you don’t recognise that as the kind of statement that comes back to bite you on your (uncovered) arse, you haven’t been watching the show closely enough over the years.

Best of British?

On day one, the teams split up to conduct market research, create and manufacture the product, devise branding and make one initial sales pitch. Day two is all about public and trade sales.

Katie sends Lauren’s sub-team to conduct research which tells them to use plain colours and soy rather than paraffin for their candles. She promptly ignores this, relying on her own experiences as a consumer and focussing on minimising costs to maximise profit. They christen their green tea, aloe vera and lemongrass-scented brand British Breeze. As Nick Hewer notes with a raised eyebrow:

Green tea from China. aloe vera from Africa, lemongrass Thailand. Oh, let’s call it British Breeze.

It could have been worse. They could have gone with one of Sarah’s suggestions of Lemonise or Yellow Submarine. Presumably she’d have wanted to slice any Lemonise product.

Is Sarah obsessed with lemons? (Image: BBC)

Roisin’s team settle on Beach Dreams (meh). She has a firm vision of creating a top quality brand, but then sets relatively unambitious pricing. By contrast, Katie is firm about pushing for maximum mark-ups all the way, with Sarah voicing concerns about the price being too high. This from the woman who tried to sell a couple of plastic bowls, toilet brushes, Marigolds and cleaning spray to London Zoo for £250. O-kaaay.

Her manufacturing sub-team relies on Sanjay to work out the right quantities of their ingredients (a task which season five winner Yasmina Siadatan spectacularly failed at). Lindsay and Nurun watch in admiration as if he was writing up the Theory of Relativity on the whiteboard. Neither of them are going to be threatening Rachel Riley’s job on Countdown any time soon.

When not being Countdown’s resident maths whizz, Rachel Riley helps to remind Roisin’s team about not covering themselves (Image: Channel 4)

Indeed, in terms of proving her worth as a candidate, Lindsay is a case study in what not to do, coming up with such genius soundbites as:

Yeah, we can’t all be intelligent.

and

I’m quite happy for you to do it all.

Oh dear. No wonder Karren Brady identifies her and Nurun as the two weak links on the team.

Sales versus profit

When it comes to the selling portion of the task, Katie sets ambitiously high pricing and a clear strategy while Roisin sets her prices lower but gives sub-team leader James a much looser brief in terms of how much he can discount.

So while Lauren’s retail team struggles to shift product at two different locations, James’s sub-team arrives at Greenwich Market and starts slashing prices like there’s no tomorrow.

A sale’s a sale. There’s no such thing as bad profit.

Perhaps not, James, but there is such a thing as not enough profit.

The most notable laggard for Tenacity is Sarah, who frustrates Lauren with her attitude and then insists their pricing is too high, even though Daniel and Pamela make sales. With Summit there’s a notable boy/girl divide, with market trader Nurun struggling to make much impact and Lindsay doing her best to hide altogether. James and Solomon shift plenty of volume, but the former in particular is slashing prices at every opportunity.

James – the discount king (Image: BBC)

The teams’ trade appointments range from a small gift shop to the swanky Goring Hotel in Belgravia and private members’ club Home House in Marylebone. Katie’s sub-team, despite some hiccups with wonky labels, sells well at good prices, closing one deal at a Mayfair nightclub that nets £920. Roisin’s team offloads most of their stock at a knock-down price at the gift shop, meaning they cannot fulfil a deal arranged at the Goring by James the previous evening.

In fact, while Katie’s strategy is executed consistently, delivering high margins at the expense of selling fewer units, Roisin’s strategy goes out of the window, with different team members at their market stall selling at different prices, and the emphasis being on shifting product at all costs. If control is Tenacity’s watchword, then Summit’s is … panic?

Boardroom Brouhaha

In the boardroom, the team are pleased because they sold out but Roisin comes under fire for her woolly pricing policy

Sugar is unimpressed by Katie ignoring her market research, while Sarah draws attention to herself for her inept sales performance as the Baron of Business quips:

Never mind aloe vera, sounds like it’s goodbye Sarah.

As Sugar calls for the results, James seems so relaxed that he starts doing stretches, for which he receives a ticking off. He’s in for a nasty surprise though, as the numbers reveal that Summit sold £2,177 worth of goods and made a profit of £1,569.32. However Tenacity, despite finishing with unsold stock, sold £2,217.35 for a profit of £1,584.09 – £14.77 more than Summit or, basically, one candle.

The result is so close that an uncertain Ella has to check, “We won?” They have – and that’s three wins out of three for the team formerly known as Decadence, for which they are sent off to a luxury spa to sip champagne in a jacuzzi.

Summit head to the Cafe of Broken Dreams, where Roisin expresses her bitter disappointment and James throws Lindsay under the bus, before returning to the boardroom where Sugar hammers home the point about this task being all about P-R-O-F-I-T and the difference in the teams’ average selling prices: £16 for Tenacity versus just £9.50 for Summit.

No focus on the margins. No focus on pricing control. Panic selling – panic, like a fire sale.

James seems unable to accept that his insistence on deals was a contributing factor to the team’s failure, and he further angers Sugar by constantly comparing himself to him. Sugar observes that anyone can sell by slashing prices. Except for Lindsay or Sarah, perhaps.

Nurun sold just £92, Lindsay a paltry £12. Mark, who is fast becoming something of a boardroom assassin, turns the screw on Lindsay, calling her “just an empty seat”, while Sugar weighs in, referring to the swimming instructor as drowning, being surrounded by sharks and treading water all in the same breath. Although I’m not sure how you can be treading water and drowning simultaneously.

Lindsay found it all too much (Image: BBC)

On the point of tears, Lindsay admits:

I’m sorry to say I’ve not done very well. I’m disappointed in myself.

She would probably have quit of her own accord, but Sugar fires her anyway and we don’t even get to see her piece to camera in the Taxi to Obscurity. She does get a sympathetic version of the ‘you’re fired’ music though. And hopefully some of Tenacity’s unsold candles to soothe away the stresses of a process she was unfortunately just not fit for.

With the rest of her team still on the hook, Roisin brings back Nurun and James. Sugar continues to hammer Roisin for not controlling her team’s pricing. He expresses his surprise at Nurun’s poor sales, dismisses her win as PM last week as lucky and wonders if it’s too big a transition for her to move up from running a market stall to a proper business. As for wide-boy James, he’s told he needs to stop talking so much and the subject of his dodgy pricing ethics is also raised. Sugar, who’s on top punning form this week, clarifies:

Just so there’s no confusion, ethics is not where Southend or Colchester is.

But Sugar recognises the potential for a good redemption arc when he sees one, so James survives and instead the Digit of Doom points in Nurun’s direction. Unlike Lindsay, she does get to say her piece:

I’m a bit sad the dream has ended so soon. Lord Sugar definitely overlooked my potential. In that boardroom I definitely think James got lucky there.

He definitely did get lucky, but equally Nurun has no one to blame but herself after two weak tasks in a row.

Nurun failed where she should have excelled – selling at a market (Image: BBC)

Task analysis

Particularly in tasks involving high margin products, high prices generally trump high volumes when it comes to generating the most profit, although in this case it ended up too close to call. (The opposite tends to be true when margins are low, where volume is key to profitability.)

However, here the distinction is more blurred as the margin of victory was so small as to make the two teams’ strategies essentially on a par. But let’s look at how easily Summit’s pricing could have swung the task.

The numbers stated in the episode suggest that, at an average price of around £9.50, they sold 230 units. If they had achieved Tenacity’s average price of £16, they would only have needed to sell 118 units – barely half their stock – to have beaten their rivals’ profits. Even at £12, selling 170 out of 230 units would have sealed victory.

Given her accountancy background, Roisin made a mess of her pricing strategy (Image: BBC)

If Roisin had thought through her numbers properly and been able to get James to listen – the latter being a big if, admittedly – the danger of shifting product at any cost would have been clear. Having said that, if she herself hadn’t offloaded most of her sub-team’s stock at the first opportunity and held back enough to at least fulfil the Goring Hotel’s provisional order – at a significantly higher price – that would have been enough to snatch victory from the jaws of defeat too.

It was an unusual pricing strategy, to say the least. When you start selling at a low price, you’re left with nowhere to go. Better to start high and then adjust your prices down depending on levels of demand and the time of day. The time for deep discounting is at the end of the selling day, not the beginning.

It’s not made clear in the episode, but Tenacity were also far from perfect. Given their sales and their average price, it appears they only shifted 60% of their stock (assuming they produced the same number of units as Summit). That suggests that Katie’s pricing erred on the high side initially – which is fine – but she should probably have reacted to this during the afternoon by either relaxing her control on pricing, particularly with a retail team who ended the day demoralised, or switching the excess stock more quickly to the trade side in an attempt to offload a big bulk sale.

Of course, it’s much easier for viewers’ benefit to portray one team being right and the other as wrong rather than the reality of dealing with shades of imperfection. But overall Tenacity deserved to win for having a clear, bold strategy to start with, whereas Summit put themselves in a hole they couldn’t quite get out of.

Next time: The teams launch their own online video channels. YouTube may never be the same again after these video nasties.

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9 Comments on The Apprentice S10 Ep3: Kicking up a stink

  1. An underwhelming episode with little real fireworks. James was beyond annoying but both Nurun and Lindsay had to go. Hopefully next week’s will lead to more comedy. You know where my review is…

    • I’d say the right two definitely went. James and Sarah are just silly. This probably wasn’t the greatest episode but I had to feel sorry for Linday in the end. It was all just too much for her. I know it’s easy to sit at home and wonder why she applied in the first place, but I’m sure all of them go into it thinking they’ll manage to cope and then realise just how big some of the egos they’ve been forced in with really are …

  2. I can’t bear to watch but I giggle through your recaps

  3. I have said before that you need to beware the bulk trade order especially in a task that is all about margin. In this case it was not beware the bulk order but be careful which one you accept. That was a communication breakdown. Or to be more accurate, there are so many egos that everyone hears what they want to hear whether it be the sale at The Goring, or the colour and wax for the candles. To the listener in the debrief I suspect that the hotel sale was only a possible because of the normal bluster that surrounds all the claims in the programme. And market research on The Apprentice is generally flawed anyway as the sub-team push their own agenda. In this case however the questions were neutral and the advice was sound and then ignored. I was sorry that the poorer product won. For Summit to impress the manager of the hotel with the quality of the candles was an exceptional result for that part of the task. I have to say though that snobbery comes into this: Katie was PM because she buys candles and home fragrances and her decision on paraffin wax because it takes a colour was simply wrong and aimed at the wrong market. Quality candles, scented or otherwise, are always natural. It looks better and you don’t have to worry about what goes with your decor.

    In some previous tasks I know that Lord Sugar has given credit for remaining stock but he chose not to in this case. James just did not get the whole principle of “margin” and I don’t think he even got it when it was explained to him. This is not unusual in sales people and Lord Sugar was right to observe that if you drop the price anyone can sell, and Sarah demonstrated that for him! Although James might reflect on the task and get the message, I suspect that his time is limited.

    I think Roisin got a bit of a raw deal. She did set a pricing strategy and, understandably bearing in mind the structure (or lack of it) left discretion to the individuals. What she failed to realise is that as an accountant she understands margin and (some) sales people only understand sales. I remember (true story) an audit client years ago who set up a business from a sales background. He ended up mis-pricing his product and sold below cost. His instinctive reaction was that as he was losing money he had to sell more, and so he did and gave more discounts and incentives to do so. Unfortunately, the story does not have a happy ending…

    • All good points, John.

      In one sense, I agree that Roisin did get a raw deal. Just because she understands numbers shouldn’t automatically mean she understands pricing strategy. Yes, she should understand how margin works, but in truth pricing strategy is a marketing process more than it is a finance one. Of all the traditional 4 Ps of marketing, it’s the one which is most a black art at best.

      And I wouldn’t have expected Roisin as an accountant to necessarily be commercially aware – the big disappointment for me was that she had an opportunity to show that she was and fell short. Similarly, just because I understand how P&Ls and the sales process work doesn’t make me a good accountant or salesman – far from it in both cases, in fact!

      As for the bulk order, there’s nothing wrong with them per se but as I think you’re alluding when you sell in larger quantities it’s natural to erode the price and therefore the margin. And when you offload as much stock in one go as Roisin did, it leaves you little room to manoeuvre. I understand she was anxious to make a big sales early on to take some pressure off, but surely the way to go is to aim high on the first sale to gauge from buyers whether you have got your pricing right, then adjust down accordingly. You can always slash margins later in the day in an attempt to offload whatever stock you have remaining – you’re in a better position to make a bulk sale at the end of the day when you’ve built some experience in the market and know exactly what stock you have left.

      I did think that Sugar’s comments about Tenacity having stock left to sell another day like you would in the real world were a bit disingenuous. In the real world, yes, absolutely. But this wasn’t the real world and the point of the task was not to maximise total asset value (that usually comes later in the run). If Tenacity had lost by £15, he’d have berated them for not selling a few more units. C’est la guerre.

  4. Louisa Radice // October 24, 2014 at 4:24 pm // Reply

    I wonder if location may also have played a part? I suspect that One New Change would be busier than Greenwich Market on weekdays, especially around lunchtime, whilst the reverse would be true at weekends. Incidentally calling 1NC an upmarket shopping centre is stretching the truth a bit; the kind of chain stores in there would be more at home in Brent Cross then the Burlington Arcade. (cf this review from when it first opened:
    http://www.theguardian.com/business/2010/oct/30/one-new-change-shoppers)

    • A good point. It may very well have done – of course, no two locations are exactly alike. I think 1NC was probably a decent enough location – in the City, plenty of passing professional and tourist trade – but it’s not a place I know particularly well.

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