Karan Bilimoria’s story is a classic case of how to chase a dream successfully. He had only his dream and passion as his assets when he set out against all odds to turn his vision for a less gassy lager into Cobra Beer.
Educated at Cambridge University, he was drawn into entrepreneurship and, in 1989, founded Cobra Beer. He has since then launched General Bilimoria Wines, exported his beers all around the world and added several new products. Today, Cobra Beer is valued at over £100 million (Rs 830 crore), and sold in more than 45 countries.
Bilimoria has won many accolades. He became the UK’s youngest university chancellor when he was appointed at Thames Valley University. Recently, he became one of the youngest members of the House of Lords after his appointment as a crossbench peer. Besides, he has won numerous business awards.
Recently, Bilimoria penned how and why Cobra Beer was developed into one of the world’s best loved brands. In ‘Bottled For Business’, he narrates his journey from being a debtor to an entrepreneur. What follows is an excerpt from the book.Cobra’s commitment to sales and marketing is vivi-dly illustrated by the number of staff it employs to handle those two functions. There are close to 150 people employed in four countries at the end of 2006, of which 30 per cent are involved in sales and 10 per cent in marketing and PR. That means that these two functions account for almost half of the company’s head-count. It hasn’t always been that way though.
Giving Sales A Push Start
A car called Albert (pr. Al-bear) played a key role in the transformation of Cobra beer from an idea into a genuine business. It was the nickname of the company’s first delivery vehicle, the Citroen 2CV that Bilimoria was driving at the time.
‘I brought it for £295, with money I borrowed from Arjun,’ recalls Bilimoria. ‘It could carry exactly fifteen cases of Cobra beer. You could see the road through the floor of the car. Most days it required a push start. Eventually it failed its MOT three times.’
While the competitors’ beer was distributed in vans furnished with smart corporate livery, consignments of Cobra were transported around in an old, battered, bright green, bottom-of-the-range Citroen.
When the first consignment of Cobra arrived in the UK, the distributors in the UK subjected the beer to a haze test, designed to establish whether the beer was of good enough quality to be sent to customers. Although it was within the legal parameters, it failed to meet the distributors’ requirements.
Now, there was a consignment of beer, a bill, but no distributors. They needed to find a replacement distributor but until that happened there was only one solution: Bilimoria and Reddy would have to shift some beer. And it wasn’t going to be easy.
By the time Cobra entered the market, Carlsberg was well-established as the number one lager brand in Indian restaurants. Two others, Dortmund Union, distributed by the German Lager Company, and Kingfisher, which had been active in the market for eight years by now, were doing well. Worse, Cobra was up against a number of other Indian beers attempting to break into the British market at that time. Golden Eagle, one of India’s biggest beers brands, was exporting stock to the British market, as was Bombay brewer Maharaja, the producer of Bombay pilsner, and others.
In the face of such tough competition, the owners of a fledgling brand that was only available in double-sized bottles, and which had no marketing budget to speak of, met with nothing but scepticism from distributors. Bilimoria recalls: ‘I remember having a meeting with one of the biggest distributors who said, “Sorry, we’ve got our own Indian beer which we are going to make a success of, and anyway, yours isn’t going to work”.’
Bilimoria and Reddy were forced to sell directly to the restaurants themselves. So they developed a low-budget sales and marketing strategy geared to making Cobra a premium brand. ‘We decided to go for the best restaurants first,’ says Bilimoria. ‘If the best restaurants stocked the product, we could use them as a reference when we went to other restaurants. We could say, “Look, if it’s good enough for them, it should be good enough for everyone”.’
The way they found those first few customers is a good example of some selling basics: using your personal network for sales leads and introductions; tenacity and a willingness to put in the long hours; and being highly tuned to the needs of the customer.
Bilimoria contacted a former military attaché with the Indian High Commission in London, who had since returned to India. During his posting Bilimoria’s contact had eaten at a number of Indian restaurants on a regular basis. Bilimoria persuaded him to write to the owners of the Indian restaurants he used to eat at in London, and ask them to let Bilimoria come in and speak to them about Cobra. Timing was also important. They found that the lunchtime period was the best time to make sales calls as the restaurants were likely to be less busy than in the evenings. Bilimoria once succeeded in visiting 13 restaurants in one lunchtime.
Karan’s Business Tips: On Good Communication
Bilimoria is well aware of the importance of good communication. He will scribble notes to his staff, get on the phone, wherever he is in the world. He will conference himself into calls if he can’t make a meeting. If he is in the country he will try to speak directly to each of the management team individually, and makes a point with the company meeting to address the team.
And then every evening whoever is in the head office at 5.15-5.30 gathers around while Bilimoria, very informally, conveys news and updates, recaps major events, congratulates people, and does a round-up from the management team, getting people involved and making them feel a part of the company.
Karan’s business tips: The 7ps (or 6ps and 1F)
Marketing guru Philip Kotler famously has his 4 Ps of marketing: product, price, promotion and place. Bilimoria prefers to talk about his 7 Ps. They are: product, price, promotion, place, then people and passion, and finally finance, or phinance as he puts it.
Even when he managed to get in front of the restaurant owners Cobra was not an easy sell. For a start Cobra was £1 a case more expensive than the opposition, and Bilimoria always insisted that the minimum order was five cases. And then there was the size of the bottle. The restaurant owners were used to small 330ml bottles or draught beer, and would baulk at Cobra’s much larger 650ml bottles.
Karan BilimoriaBut Bilimoria soon learnt how to counter these objections effectively.
‘People would say, “You have something unknown, more expensive, and you are saying I have to take five cases?”,’ he recalls. ‘In response, we would say, “Look, the secret of this product’s success is in its smoothness and its drinkability. The reality is, because it is smoother your customers will eat more and, if they want to, they will drink more. If they drink more, you make more. You are going to make more profit. So forget about the £1 additional cost, because we are going to make you many pounds more profit”.’
To counter the objection about the bottle size Bilimoria came up with a sharing concept. Instead of ordering a bottle each, diners would share the larger sized Cobra bottle. ‘People ended up consuming more because they were sharing; it created a much better atmosphere,’ observes Bilimoria.
‘People on neighbouring tables could not figure it out. They saw these large bottles, but they weren’t wine bottles, so what were they? Usually they would ask to try one and Cobra drinking would spread like wildfire around the restaurant. To this day over half of our sales are in the big bottle size.’
To emphasise how it is possible to succeed in even the toughest selling environments it is worth mentioning that two thirds of Britain’s ‘Indian’ restaurants are owned by Bangladeshi Muslims who don’t drink for religious reasons. Bilimoria would launch into his patter about how his product was the best Indian beer around, extra smooth and less gassy, offer to let the owners try it, only to be told that they did not drink. However, the restaurant owners taught Bilimoria one of his first lessons in business: to put the customer first. They said, ‘it doesn’t matter that we don’t drink, it’s the customers who matter. If our regular customers like it we’ll place our first order, and if the rest of our customers like it we’ll re-order.’ Bilimoria and Reddy would leave a few bottles for a restaurant’s regulars to sample, with a promise that if the customers liked it then the restaurant would place an order – and they invariably did. Given this chance, the product had to deliver –and it did.
To this day Bilimoria always says he will never forget what the Indian restaurants did for him by giving him a chance, and will always be grateful for their support.
Original article here