Making a Name for Themselves
by Stacey Burling, Inquirer Staff Writer
Do Americans really want more sauce? Jorge Lam Sr., a Peruvian chef famous in his home country in an Iron Chef sort of way, might have wondered this week as he toured Trader Joe's, Whole Foods and DiBruno Bros. groceries in Philadelphia with a team of student marketing consultants from the Wharton School and Universidad del Pacifico in Lima.
As students pointed from one intriguing sauce to another, one thing quickly became obvious: There are an awful lot of sauces. Shelves were loaded with them near the produce and the pasta and the meat and the chips. There were red curry and Cuban mojito, red pepper spread and marinara, chipotle-citrus barbecue and Baja seafood.
Lam, who wants to begin exporting his company's sauces to the United States, was
undaunted. Full of energy and ideas at 72, he thinks Americans will like his blend of
Chinese and Peruvian flavors. There is room here for more, he said through an
interpreter. "The market is for all."
Jorvic, the company that Lam and his 40-year-old son, Jorge Lam Jr., run, is one of 11 foreign clients of the Global Consulting Practicum, a Wharton M.B.A. class in its 28th year. The program pairs a team of about five students from the University of Pennsylvania's Wharton School with students in another country to help a company in that country expand in the United States.
Such courses are still unusual, though Temple University requires M.B.A. students to work on similar projects with foreign and domestic companies. The Wharton course is competitive: Only about a quarter of the students who apply are chosen. This academic year, Wharton students in Philadelphia and at the school's West Coast branch in San Francisco worked for companies in Chile, China, Colombia, India, Israel and Peru. Their clients included a winery, a fruit producer, an insurance company, and a carpet manufacturer. The school treats some projects as top secret because of the competition.
Students presented their final expansion proposals to companies this week. Students work for free and get one mere credit despite a workload that is far greater than average, professors said. But they also get valuable real-world practice in marketing, production, international business rules, and pricing. And there are travel perks. The Wharton students, who met their client and Peruvian team members in January in Lima, managed to squeeze in a trip to the famous Incan ruins. "The trip to Machu Picchu is well worth the work," said Pratish Halady, one of the Wharton students.
Then there was the food. Jorge Lam Sr., who is known in Peru for his cooking show broadcast from 1998 to 2000 and for his large cooking school, used his sauces in lavish meals for his guests. "Part of our study was two four-hour meals," said Steve Smolinsky, a marketing consultant and speaker who taught Wharton's Jorvic team.
Companies pay Wharton about $60,000 to cover travel and research expenses. Some companies, such as Jorvic, receive economic-development funding from their countries to offset some of the cost. Wharton absorbs the cost of the very low student-teacher ratio.
"This is still the most costly course that Wharton teaches," said Len Lodish, a marketing professor who started the course, in part, to work with a fellow Wharton professor who moved to Israel. Smolinsky said the Lams got a good deal. "A project like this from a big company would be a half-a-million-dollar project," he said. The school says that students' recommendations have added $300 million to $400 million in annual sales to clients' revenues. For example, one of last year's clients, a maker of Colombian beer, is now one of the fastest-growing in the United States, Lodish said.
Wednesday morning, the Peruvian and Wharton teams, all dressed in suits, convened to present their plan to the Lams. The group itself was evidence of the increasingly international business world. The Wharton team included one U.S. citizen, and he was born in India. His team included students from India, the Philippines, France and China. Their teaching assistant is from Japan. Jorge Lam Sr. is a product of Peru's large Asian community; his businessman father moved to Peru in 1924.
Because Jorge Lam Sr., whose company sells 30,000 bottles of sauce a month in Peru, speaks little English, the Peruvian students did the talking, in Spanish. In preparation, the Wharton students had gone to a fancy-foods trade fair to study the market and competition - 5,000 new sauces a year. They had interviewed Peruvians living in the United States and food distributors.
The teams suggested that the Lams first try selling to Peruvians in the United States. The goal would be to move into the more lucrative specialty market. They suggested getting rid of the Jorvic name and capitalizing on Jorge Lam Sr.'s name recognition - many Peruvians in the United States remember him from the TV show - and the company's unusual Peruvian base. "We want it to be very Peruvian, very him," Halady said before the presentation.
The new name: Chef LAM, El sabor original de Peru - "the original flavor of Peru." And, the students said, the company would need to heighten the flavor of two of its sauces when it expanded to the broader market. After the presentation, Jorge Lam Sr., who had studied bottle shapes and labels at the groceries as only a man with money on the line would, had questions about packaging. Jorge Lam Jr., who is in the same M.B.A. program as the Peruvian students, had detailed questions about pricing and profit, especially the students' projection that the company would not make a profit until the third or fourth year.
The Lams said they planned to accept the students' recommendations, even the part about changing the taste of the sauces. "We are not only chefs," Jorge Lam Jr. said, "but entrepreneurs."
