Friday, February 19, 2016

Freedom 251 Lessons on Dominating Free Publicity

It is not everyday that an unknown company appears in the horizon, create shock waves and dominate media attention.

Ringing Bells, a company that 'plans' to manufactur smart phones did exactly that. They announced a smart phone, for the cost that doesn't even buy one lunch for a family.

The Freedom 251 Smart Phone, which costs just Rs.251, and Ringing Bells claims to start shipping in four months, is the news of the town.

If not for the price, Ringing Bells would never get 1/1000th of the media attention. Otherwise, they'd need to burn a good fortune on advertising, which is beyond the scope of a startup.

In short, with a price tag of Rs. 251, Ringing Bells got publicity worth several crores.

The claim of Ashok Chadha, President, Ringing Bells, that Freedom 251 recoups cost and become profitable simply by scale and volume, doesn't hold much water. If they can prove otherwise, fine. But, until they prove the economies of scale works at these levels, I hold my judgment.

What Ringing Bells can however do is this: Sell 100,000 or 1,000,000 units of Freedom 251 for this price, next batch of same numbers for Rs. 1000, and then for regular prices of Rs.2000 to Rs.4000.

By the time of first and second batches, Ringing Bells can establish themselves as a reliable brand.

The price tag has given them the headstart they desired. Now the onus is on the company to prove themselves right.

Until the theory of scale is proven right (or wrong), I won't put my money in.