Hey there this is Rajat here from Startup Frat and today I’m bringing you uh section 2 chapter 2 of the product packaging secrets and today what we’re going to talk about is what exactly you need to do if you already have a product line or if you have a skill like you’re a doctor lawyer accountant or you have a skill in the corporate sector like you’re an hr person finance
The person or you already you’re already a small business owner um but you know dealing in certain kinds of products then how do you do product combinations how do you do product packaging right so there are essentially two types of uh product packaging you know in the market today that is very successful and both of them work uh you know work at scale one of them is uh definitely going wide and the other is going deep okay so I’ll just write these
Positioning in the market what should be a product positioning in the market so that you collect the maximum value from the market while also providing the maximum value to the customer and thus ensuring that regardless of whether the times are good or bad you have your products are successful you have a little bit of flexibility and just like the billionaires do right every time money is released into the market or the economy is growing or whatever it is at
That point you can really reel in the big fish and make sure you collect a lot of wealth for yourself okay so how do you do that see uh business works the best at scale which means you’re going you’re growing the business 10 20 or hopefully more than that 50 to 100 every year right now every business type has certain secrets that allow it to scale every business type has certain secrets that allow it
To scale and if you miss those secrets what happens is you will be in business you will probably even be well known in your area and your customer in your customer community or something like that but it will not allow you to scale and the ravages of time hit the business is going to get hurt okay the business is gonna get hurt I’m gonna give you live examples uh in this training so how does a wide
Product portfolio work how does a wide product portfolio work, okay so what a wide product portfolio does is every product basically solves a problem for the customer, okay and then you want to make sure that you’re known for that line of product as wide as you can go which means you get everything under the sun in that product line so that typically works very well in the retail scenario that works very well in the retail scenario how does it work
So let me give you an example of a chemist okay or a hardware store hardware and electrical store okay hardware and electrical store or a chemistry chemist is known for having all of the things that are related to health medicines for certain diseases and things like that right even skin care shampoos and things like that so all of these things can escape
So it is very well known that if you wanted to buy something for your health or if you have a prescription from a doctor the place to go is a chemist so what happens is that they are known as the point place to go okay the place to go the name doesn’t matter which chemistry trader is in med plus or medicare or any one of these other brands or something or even if it’s a local chemist or something okay people in the area know that this is the shop
Where I have to go to get uh you know to get any health-related stuff similarly a hardware and electrical store I need anything for my plumbing I need anything for my electronics electricals or something I need to go to the hardware electrical store they’re gonna they’re gonna have what I need okay so this is called a wide product portfolio which means if anybody wants something in hardware you are the person to go to or electricals
You’re the person to go to if anybody wants something anything at all any brand multi-brand you know they want anything in the health or sickness sector you know you’re the person to go to it doesn’t matter what brand you stock you make a commission on everything there is no you don’t have your own personal brand except for the fact that you have your own you know reputation in the area where
People know that this is the person to go to okay similarly you have something which is called product depth, okay what is the product depth is more uh results oriented okay product more depth is more results-oriented which means what problem are you going to solve these are typically long-standing complex problems okay long-standing complex problems that you’re solving so, for example, let’s take the example of a gym
Okay what does a gym what is the difference between a gym and a chemist, okay a gym solves a complex problem which is health okay which is health which is you know people taking care of their own health rather than the sickness market right so what does a gym really do you’ve got all kinds of things over there people want to have healthy diet people want to have healthy exercise there are various types of exercises
Various types of workouts various types of regimens there is yoga there is calisthenics there is weight lifting there is bodybuilding there is uh you know high-intensity interval training there is long distance marathon running swimming etc right so you’ve got diet you’ve got exercise and the third thing is these things are these things a lot of times you will find that these things are community-driven
Why community is driven because there are comp they are complex problems to solve the long-standing motivation required to crack the code, okay the long-standing motivation required to crack the code is only to be found in hanging out with like-minded people okay it’s only to be found in hanging out with the right like-minded with like-minded people in an in a like-minded conducive environment okay so I’ll just write like-minded people
Lamp okay and then I write ce which is a conducive environment the environment should be something that encourages the user to keep on keeping on till the goals are achieved right so how does the product portfolio of a gym look like how does the product portfolio of a gym look like they have the infrastructure for sure they have the actual gym, okay then they have other uh co-working
Spaces a space that can be used for yoga and you will find on the walls they have these rock climbing things built in today’s gyms right so people want to do these full body exercises like rock climbing you have the thing built on the wall and then you have a functional exercise like those tires that you turn and all of those things okay so yoga plus other formats and then what do you have so they and they will usually have different
Membership options if you have to want to have access only to the gym but you want to do it only afternoon time in the downtime and there’s a different price there’s a cheaper price if you want to have 24 hours access to the gym that the full membership is a typically higher price then if you want to have a yoga another format they’ll have certain add-ons and then they have value-added services like if you can take a training personalized training, okay that’s that’s
You know an add-on is more expensive and then you have something like supplements okay and in order to bring the community together they have you know like a monthly challenge or something like that or they’ll have a three-month challenge twice a year okay which will talk about the biggest largest loser challenge or whatever it is right so which means people who lose the highest amount of weight within the challenge period they will get
Felicitated they’ll get a prize or something like that okay and then they have other community events centered around the gym which will be like parties and things like that okay so this thing it goes deep which basically means there is a product for everyone regardless of how deep they are in the game which basically means if I’m just exploring then I can take an afternoon membership to the swimming
Pool I can take an afternoon membership and just you know to come to the treadmill and basically walk on the treadmill for a little while and after a while, I feel better I say okay I’ve been able to do this I’ve been able to attend it now I want to go you know I want to come in the mornings I want to do some weight lifting I can actually pay them more money convert my membership into full access which means I can come any time of the day so I’ll come at 6 am which is
The rush hour and at that time you know I’m going to be doing some weightlifting they’re going to be a different set of people who are going to be available in the morning doing those things so I have that environment built in at six o’clock seven o’clock whatever okay and then I say okay this was good I’ve learned something there are so many things I don’t understand what do I need to do I’ll take a personal trainer for a month you know that costs another seven eight ten
Thousand rupees extra or something like that right and the trainer gets you going and by the third day or fourth day they’ll ask you well what do you do for diet we have you know free diet plan and then we have some supplements or you can buy a diet plan from any nutritionist for three months and then you can have some supplements to supplement that diet plan the supplements will obviously cost you about five to ten thousand rupees a
Month uh depending on how many months you want to take the regimen right so this is a depth which means over a period of time you get more and more motivated to achieve a higher and higher level of goal and they have a product line to support all of that okay now there are certain product lines like they have the challenges like they have maybe they’re part of a marathon or something like that is everybody going
To be using that product line no probably less than 10 percent of the customers are using that product line what is the initial product line which is you know you can have an afternoon membership come here to do some treadmill whatever okay and that is probably the cheapest product line you can pay two-three thousand rupees a month for that right and then they have this whole what do you call a product funnel where different product lines attract
Different types of customers on each of them the deeper the customer goes the higher the profit for the you know for the ins for the establishment okay over here this is reputation based the more number of over a period of time the more number of customers seem to have you at the top of their mind okay where do you want to go to for a chemist where do you want to go to for tablets where do you want to go to for hardware where do you want to go to for
Electricals the more mind space you build over a period of time that is your secret uh you know to to to making money over the long term to make long-term profits yeah so what are the costs involved what are the different costs involved and how do you actually make the profits and attract the wealth over long periods of time the cost over here is inventory cost okay inventory cost you have to keep lots and lots of stuff
In-house so that every time somebody wants a bunch of different different different different things you have you’re there to supply them right over a period of time as your reputation grows what happens is that the customer acquisition cost okay the this is the big cost over here this cost doesn’t really exist because this is kind of more based on reputation you don’t really you know you don’t really
See your chemist sending out flyers although some some of them will restaurants will actually send out flyers and everything okay so customer acquisition cost which means they don’t really spend on attracting people they don’t really spend on putting banners up they don’t really spend on putting pamphlets into newspapers and things like that but what typically happens is that all of the cost 80 of the cost is going in stocking the equipment that you
Have to buy on a cash basis right and the amount of equipment that moves you actually reinvest in replenishing that over a period of time you figure out what is it that people of this area require and those are the stocks I need to keep the other ones I don’t need to keep right inventory is the big cost over here in the depth definitely if you’re running like a gym or something then infrastructure is a big cost
Infrastructure is a big cost which means the actual setup of the gym and those tires and those little things so you have to build it once and the initial cost could be high initial cost could be high and then the customer acquisition costs are also high because you know a gym is not the kind of place where people go to by default they have to be attracted to come to the gym right they have to be attracted to come to the gym so i’ll just write customer
Acquisition costs over here okay and then over a period of time since they’re solving complex problems once a person likes getting healthy you know they’re happy about it they keep paying because they want to be part of that community they want to have access to the gym and they want to keep doing those activities so you will see that only their top 10 or top 5 customers over a period of time will stick with them for a lifetime and those 5 10
Customers are enough to keep the establishment running for long periods of time, okay so you have customer acquisition costs are high there is not a whole lot of inventory cost over here okay but there are some secrets there are some strengths and weaknesses that I will read out from my notes and tell you you know how these things what are the little secrets that help these businesses stay or stay in business or
Probably get out of business after a certain period of time okay so the three secrets that keep a width based business in business is or the first one the scale okay i’m going to talking them talking about these in great detail scale of product line product line as well as customers yes scale
The second thing is customer service third thing is convenience okay scale of products customer service and convenience and what is the little secret I’m going to talk to you about little the biggest little secret that that will make or break your business that i’ll talk to in five minutes okay scale of product line there is no point going to a hardware store if one
In three times they don’t have what you want there is no point going to a chemist store if one in three times they don’t have what you want okay people don’t like to do that so a lot of times a product a store that does not have the scale of the product line will need to be very strong in customer service you say what do you need well I need x y and z I don’t have it right now but give me your address I will have a person bring
It over to your doorstep within two hours three hours by tomorrow morning whatever yeah so the customer service also has to be strong or the product scale of the product line has to be strong why because people don’t like wasting their time getting out of their house going to the chemist or going to the hardware store and then they don’t find what they want okay it’s a complete waste of their time so customer service has to be strong and the scale of
The product line has to be strong okay either they get everything that they want you will see a lot of different chemists in the area but everybody pretty much 80 percent of the people go to one particular chemist as a default as their default for their medicines for their for their you know kind of grocery items like shampoos and skincare stuff and stuff like that why because they have everything that these people need okay and the second thing is
Definitely, customer service needs to be very strong because these kinds of businesses are very very prevalent in India very very prevalent India why because the real estate is highly optimized if you see a good chemist or a hardware store they’ll have a little shop they’ll be filled to the brim with everything these this person just has a little two by two space to sit and on that little stool they sit all day long so the real estate is optimized so
What they do is for essentials like hardware or electricals or for chemists or groceries they know that the business exists because India is a populated and growing country they know that the footfall is going to be there they know that footfall is going to be there so you will see over a period of time many different chemists in the same shopping center couple of different hardware and
Electrical stores so it’s a competitive business the competitive business so what’s gonna work is either the scale of product line which means everybody knows that this is the person who’s likely to have everything I need and every time I go to the store they always have it okay they always have it and the second thing that they need to have is customer service or convenience which means you can pay me via paytm you can pay me with cash i’ll always have the change you can
Give me a 2 000 rupee note i’ll always have the change people over a period of time will gravitate away from the stores where they say give me exact change or I don’t have this payment method you know discuss basic convenience and then customer service how they interact with you and things like that do they you know do they have the trust uh do they have replaceability of items and you know I come from originally from delhi where they say you know the
The standard answer of every chemist is that they’re not changed right which basically means you just take what you want if you don’t like it bring it back i’ll exchange it that is the level of customer service that will keep people loyal to you uh you know for a long period of time now in the online world how does that work and what are the risks that we don’t see in this business okay let me come to the final secret which is
Customer behavior okay i’ll just write this in big bold customer behavior okay if you notice what happens in the online world is a hyper-accelerated form of business progress which means in the online world it takes very less time and it’s very very visible on who’s winning who’s losing and it takes it’s it’s a very fast time before people go out of business so if you see there were
Hundreds and hundreds of e-commerce companies in India before amazon came in there was flipchart everybody knows about Myntra but we don’t know about the hundreds of different e-commerce companies that used to operate that would give out their ads on Facebook where you know different companies are selling cell phones all kinds of cell phones and all of that there were hundreds of e-commerce companies in India and today
Either all of them are making losses or all of them are getting sold to foreign giants like flipchart is okay so what is the big secret is customer behavior okay and what is customer behavior which is what products I need to keep what is it that customers in India like the customers in this city like what do I need to how do I need to service them what are their different you know wants and needs that I can
Supply that cannot be measured in money and then what is the convenience that I’m providing these guys okay so customer behavior so what typically happens is over a period of time word gets around that it’s in one in three times we can’t find stuff at this particular guy uh word gets around that you know this particular guy doesn’t take this form of payment it’s very difficult to get
Refunds returns etc and you know this particular guy doesn’t have the right inventory etc over a period of time people start gravitating away from the business now this is a very low-margin business why because all of the money is going right back into the inventory very low margin business because you’re not the product manufacturer yourself you cannot control the margin on things it’s pretty much you know the other companies that are stocking their stuff at your
A place that are controlling the margin so very less margin game maybe 10 to 15 okay 10 to 15 margin now what happens is that as behavior starts to gravitate away from you where the customer preference starts to gravitate away from you the profits are eroded and you you’re very likely to go out of business if you see e-commerce which is the internet form of a chemist or grocery store hardware and electrical
Store or whatever the e-form of that you will see that the moment amazon came they had a better scale of product line which means anything that you order that is made in India made in China made in Brazil made in US you can browse it through the algorithm and they will deliver it to you the second thing is the customer service is basically next to none next to not even at two o’clock in the
Night if you just search a product okay where is this product of mine you can hit that button they will call you on your phone even at two o’clock in the night and they will sort out your problem for you there was this case that happened just about one month back I’d ordered some uh you know some embedded led lights and all for my terrace and everything and the lights got four days delayed and my electrician was supposed to come I just kept calling
Them a couple of days saying you know I just need this order today I know it’s four days out can you do anything about it and they made sure I got it I don’t know how they did it they made sure I got it right and then the last thing is definitely is convenience which is in the old days if you had to order anything that is available only in America but you need it you will have to order it and then they will charge you the shipping extra
And then they you don’t know how much the customs is going to cost so if you order something via Aramex or something like that from the US some shopping you did abroad or something like that then you till the last point you don’t know what date it will arrive and you don’t know how much customs will be applied so by the time the product shows up the rmx guy will say now you suddenly owe customers about 1600 rupees on a 2000 rupee product and then you’re like oh my
God this just cost me two times what I figured I would it would cost me right but in amazon, it’s just one price you order something that’s not available in India they will tell you it’s gonna take 15 days to come but they’ll charge you one price which is you know whatever the price is and you know everything is included they’ll figure out the customs at their end I’m sure they make a profit and everything it doesn’t matter you give
One price they give you a date the product is yours on that date right so customer behavior and then figuring out what is customer behavior how they’ve got this algorithm to figure out customer behavior which basically means if you go out to search for kitchen fittings or bathroom fittings or something like that what will typically happen is you will see other recommendations coming side by side so they figured out if a customer wants
One item like this another item like that then they’re typically moving into a new house or something like that and then they’ll keep recommending to you the things if you ever search for a 50-centimeter long or 50-centimeter wide bathroom stand they’ll immediately the algorithm understands what the dimensions of your bathroom are likely to be and they’re going to start showing you uh allied products which could not be
Bathroom style which would be other products that will fit into your house within the same size range and things like that within the same pricing and things like that once you get into surfing amazon by the way it is much more addictive than surfing YouTube or playing video games or something amazon algorithm is super addictive okay so depending on which one of your spouses is more the shopping person you know whether it’s the husband or the wife
Don’t let them [Laughter] get started on surfing the amazon algorithm because what’s going to happen is this thing is addictive you know it’s just gonna you know you just you can just spend hours on it and end up spending ten thousand five thousand rupees a day okay so customer behaviour and that’s how the algorithm is learning what to stock what not to stock it’s gotten so much better in India today
That if you order something at 12 o’clock noon time you’re likely to get your delivery at three o’clock for many products yeah why because they’ve learned what is it that customers in every area need and the nearby fulfillment center is actually stocking these products ahead of time so even before they get the orders they’ve got a local stockist who’s actually stocking all of this is like a mega mall this is like your chemist store or
Grocery store or hardware store on steroids, yeah so this is how this business line works okay again this is your secret this is where you want to focus on and these are the three principles that you want to focus on okay if you didn’t know them uh then these are the secrets now how does a depth-based product portfolio work how does a depth based product portfolio work something like a gym or something like a financial service what does the
Financial service do like a bank or something they will take your money keep your money pay you interest on it okay then you have surplus you will have a get a call from them saying we can invest this money for you you’ll get probably better returns or something we’ll probably charge some commission from those returns or something like that which is your mutual fund advisors uh hey you’ve had a relationship with us for 10 years do you want a home loan or
Something your supply will give you a home loan again these are all different companies because by law a bank cannot sell mutual funds and by law bank cannot be a home loan company together so then they have to create separate companies so you have ICICI housing is separate from ICICI bank is separate from ICSA mutual funds but they all work under the same umbrella, okay and they’re all providing you financial stability security whatever it is
Different tools and different products to help you get more and more financially stable over time if you need a home loan they’ll be happy to give you a home loan based on your qualifying criteria and everything is okay so that is an example of a depth-based product portfolio what are the secrets what are secrets let me read from my notes again so secrets are the number one is motivation
The second is movement and the third is I will write tribe building or you can say community building okay motivation movement and tribe building or you can say community building now what is this the first is nobody uses these products unless they are sufficiently motivated okay nobody wakes up in the morning and goes to the internet and searches for the best investment tools of 2021
Okay so somebody has to actually call you somebody has to interface with you and motivate you or market to you the importance of doing that hey sir you have x amount of money in a bank I see that you have maintained an average quarterly balance of five lakh rupees why don’t you transfer it over to an fd why don’t you why don’t we help you know get it into mutual funds you’ll probably you know make more money than you’re making on the two percent three
The percent interest rate in the bank or whatever it is okay the customer has to be motivated externally in a gym even if you do have a membership 85 percent of gym membership owners never go to the gym regularly they have to be sufficiently motivated to do that, okay so they need to have some sort of motivation built in to constantly get customers to use their products, okay the second thing is because they have a depth based poor
The portfolio they have to help the customer move among the different products, okay they have to help the customer move among the different products the only employees today that sit in a bank branch are the ones who are the sales people who are basically helping customers move through their product portfolio and in return, the customers using more and more of their products okay same with the gym you know you will always see somebody
You know saying hey you know you’re already doing this why don’t you do that as well why don’t you know you’re already taking personal training why don’t you take the diet plan as well you’re already taking the diet plan why don’t you use the supplements as well okay so they’re constantly moving you through their product portfolio okay unlike a chemist is not frightfully interested in moving you through the product portfolio because
They know they are the go-to place if you ever get a thought like that in your head, you’re gonna come straight to them similarly amazon you’ll never see amazon giving you an ad saying use my products yeah because they know that you’re gonna come anyway okay and the third thing is tribe building the sense of belonging has to be built because these becoming financially secure is not just a two-day job or one
Transaction job becoming financially secure something that takes 10 years 20 years becoming healthy is something that takes 10 years 20 years right if you have any kind of skill building you will see music classes or you have these yoga ashrams coming up you know a lot so they will have a lot of online stuff they will have a Facebook group they will have uh you know their live classes but if you live locally you can actually come and subscribe for the classes one
Month two months three months at a time they will have two or three different products and then they will have a lot of motivation built in they will have they will be you know they will be constantly motivating you to be a part of the challenges to be a part of the community you know to have a group to be part of the group and things like that okay so again uh in in the Startup Frat program we have different
Different products and one way we keep everybody motivated is by providing a lot of free value in the Facebook group like I’m providing to you hey by the way if you are finding a lot of value in this particular video can you just help me out and put some comments in there and in return what you also get is the more comments you put or the more number of times you interact with these videos Facebook will keep showing future trainings to you otherwise they will
Stop showing the training because there are 20 000 plus people in the group now and the organic reach of this particular training is probably only about 2000 to 3000 people so if you want to stay plugged in make sure you put a comment and if you want to help me out and give me a give me a little bit of encouragement and put a nice comment yeah okay now what is the little secret that you have over here what is the little
Secret you have over here the secret you have over here is efficacy or results which means our results okay what is efficacy which basically means you can you can basically [Music] the way you promote and how what is the guarantee that people actually getting those results like I mentioned about 85 percent of people who buy a gym membership never actually go to the
Gym at all so how well-oiled your business is that once people buy a membership you suck them and you make sure that they come to the gym and they do get the benefits because if they don’t get the benefits if they don’t attend the gym they’re not going to get the benefits if they don’t get the benefit they’re not going to buy any of your other products right so what is the efficacy in you know in online the
Online world we call it uh product and audience match yeah product market match so what is that which basically means what are you projecting to the people how much is the effort required are you making that clear to the people that just buying the gym membership is not going to get you’re not going to get them the results and how are you making sure that once they buy the membership, they keep attending this the sessions
They keep showing up so that they do get some of the benefits right so what is the efficacy in getting the results how efficient is your system even though you may be making money on the front-end getting people to come and pay to you how efficient are you and making sure that they stay with the program they get the results so they so they come and buy more products right hopefully they want to they want to up and up the physical game which means the next they want to
Do a marathon you know they want to be able to do some swimming they want to learn some new kind of sport or something like that okay that’s what keeps them coming and keep kind of buying more and more of your products uh similarly uh for example I just give you a real life scenario I’d invested some money with in in certain mutual funds with one of the banks and then the moment and for the last two years I was scribing saying you know the returns
Are not good I can see it and with a locked-in fund which basically means the moment it became three years I could probably withdraw the funds before that I could not withdraw the fund so it was a three-year lock-in now the moment the three-year window came up for some reason you know the market went up a lot of it because of us dollar printing etc that I spoke about in the previous video and the fund suddenly went up by 15
Okay so as soon as my encashment window opened up which means I have the freedom to end cash the thing goes up 15 okay and I immediately get a call from my rm saying so the fund has become 15 if the fund has grown 15 which means you made x amount of rupees or next lack of rupees what I would recommend is while the going is good would you want to reinvest and you know so what they’re trying to do is immediately they’re saying hey I’ve got you this result you
Know to buy my next product or reinvest with this same fund or let’s move it into another fund where you probably get the same similar returns in the next three years as well okay so their main goal should be and the main goal of your business should be to keep getting the results for your customers and not only getting the results to publicize the results to the rest of the community so if they’re not plugged in you know they
Want to start attending the gym they also want to get the results and then you want to keep rolling it so that the motivation lasts and it also carries on to the other newer customers and things like that okay so efficient efficacy and results of a depth-based business is very high now if you do it very well you could have a profit margin of 40 percent over here 40 profit margin if you don’t do it well you will lose
Your money because community building and tribe building is not an easy exercise over here you don’t need to do any tribe building or anything you know it’s a simpler business but the product that the profit margins are 15 very highly prone to competition because you know you just go out and see how many chemist stores are there in your area just see how many Kirana stores are there in your area they’ll be like you know many different Kirana stores many
Different chemist stores right so competition are very high but the revenue is pretty much you know revenue flows in the footfall is there but if you don’t understand customer behavior you will go out of business in this particular type of business if you don’t provide the efficacy of results you will go out of business okay so if you like this training and you’d like to know more about more examples about how we are helping our community build out these
Product portfolios for themselves and what are the uh different uh what are the different you know results that they are getting then head over to a master class which is called startupfrat.club/product a free master class you will get the value of at least 15 000 rupees just watching that master class we’ve got lots of customer studies of how the Startup Frat team has been
Helping community members to create products uh product lines for themselves etc and you will probably also be offered a promo of the month that we are running this month okay so just head over to startupfrat.com product and check out the master class it lasts for 45 minutes make sure you login only if you have the 45 minutes now if you would like to meet me live and ask me questions and everything
I’m going to be doing a Facebook live I’m thinking probably tomorrow or maybe the day after at 7 30 so just comment to me at what time you would prefer I can do it at five o’clock I can do it at 7 30 for the next two days and just let me know which day you would prefer it to be wanted to be Tuesday Wednesday or Thursday and I’ll probably do a Facebook live just like to know if you want to meet me live to ask me questions have me
Answer your questions on the live video just uh let me know in the comments what uh what day of the week Tuesday Wednesday or Thursday and what time slot 5 o’clock 7 30 or maybe 9 00 p.m. I can also do 9 p.m, okay so I’ll see you in the next video bye.