There is a cultural shift happening in our midst which is giving birth to
1. Double Income No Kid (DINK) / Double Income Single Kid (DISK) families. Both partners are working & are equally passionate about pursuing their professional career.
2. Young people of both genders are staying in urban areas & find cooking burdensome & troublesome when they return dog tired from work.
Result: DINK / DISK household & young people are ‘Time Short – Cash Rich’ & are not averse to spending cash to ‘buy’ time.
iChef has identified these pain points of this 'Target Group' & decided to either reduce or eliminate them.
iChef offers a range of gourmet meals, which are created by master chefs, and delivered at peoples door step as a ‘Meal Kit’. In the Kit, as per the recipe, vegetables are sourced, cleaned, cut & measured as per recipe requirement; the ingredients are also measured & packed & any other thing required by the recipe. This enables people to quickly cook using the ingredients normally available in a kitchen – gas stove, microwave oven, salt, pepper etc.
iChef has incorporated the following behavioural sciences principle & new rules of business in its business model:
1.
Self Penalisation: If iChef is not able to deliver the order which it has accepted then it will self penalize itself & deposit 10% of the order value to the user’s account.
2.
Eliminating Wastage from cooking: Since vegetables are pre-cut as per the recipe requirements; the ingredients are measured for the recipe hence wastage during cooking is almost eliminated.
3.
De-anchoring people: iChef only offers gourmet meal kit for which people do not have price reference. Hence they cannot make out if the meal kit is expensive or otherwise? Take Panner Makhanwala. People know the price that they pay when they order in a restaurant & hence they have a reference price in mind. And if iChef also offered Panner Makhanwala, people would judge its price based on the reference price they have …. De anchoring kills this debate.
4.
Delivery is free: Delivery cost is a sensitive issue. People when they buy vegetable / ingredients to cook at home do not pay themselves to carry it back at home. So if they have to pay some body to delver at home it rankles them. iChef has built the price of delivery in the meal kit cost itself & declared delivery to be free.
Bottom Line:
1. A successful Business model is based on ‘Consumer Insight’.
2. Successful business incorporates Behavioral sciences principal into their business model.
3. New age business incorporate ‘New Rules of Business’ into their business model.
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In this series, Rajesh Srivastava, Business Strategist and Visiting Faculty at IIM Indore gives you a regular dose of strategy case studies to help you think and keep you one step ahead as a professional as compared to your peers. Rajesh is an alumnus of IIM Bangalore and IIT Kanpur and has over 2 decades of experience in the FMCG industry. All previous
Strategy with RS posts can be found here
