Is Samsung’s reputation going down in flames? Brand contingency plan is needed after the disaster that was the Galaxy Note7.

Samsung pride themselves on the fact they are one of the top technology innovators in the world, constantly working towards producing the best product on the market. Not only do they pride themselves on this trait, but they market themselves as this – the reliable source for top of the range tech; however, following the Galaxy Note7 we’re not so sure they can say that anymore.

On October 10th we took the decision to stop sales and shipments of Galaxy Note7 devices as part of our commitment to customer safety1 is Samsung’s official statement, after they finally decided to call it a day on the product disaster – only two months after it went on sale.

So where did it all go wrong?

How could Samsung, the supposed frontrunner of phone technology, create a handset that self-combusts? Following the launch of the product and then the initial reports of phones catching fire, Samsung identified the cause of the problem as a battery cell fault and issued the first product recall. Manufacturer Samsung SDI had created batteries that where bigger than intended which resulted in a build-up of pressure when fitted into the handset, so by using another manufacturer (ATL) to create the right size battery problem solved, right? Apparently not. Reports of devices catching fire continued to surface, and Samsung received at least 92 reports of Note7 batteries overheating in the U.S., with 26 reports of burns and 55 reports of property damage2, which left Samsung with no choice other than to call it quits. Since the battery is apparently not the issue, do Samsung even know the cause of this billion-dollar error? And more importantly, will they be able to recover and return as the tech-savvy business that they prefer to identify as.

How much damage are we talking?

Before discussing how Samsung will plan its revival, it’s important to know how much damage has been done to the brand. It’s not often a company stops production and sales of a product; not one on this scale has been seen since Nokia’s 2007 battery debacle – a company that now has near dropped off the radar in the technology industry. In typical internet fashion, it was quick to mock, share and revel in the ashes of the Galaxy Note7’s credibility. And unlike the Note7, the memes didn’t disappoint…

screen-shot-2016-10-18-at-15-45-04

The spectacle of the Note7 has descended into a joke as Samsung tries to deal with the short term impacts; starting by launching a return and refund scheme, with the option to switch to one of their less flammable products, such as the Galaxy S7 or S7 edge. To add to brand embarrassment, airplanes have placed bans on the device (which is understandable due to the phone being a fire hazard) and Samsung swap sites are now set up in major airports globally. Not only have Samsung damaged their brand identity, they may have unintentionally driven customers to competitors. Considering that the Galaxy Note7 was Samsung’s alternative to Apple’s iPhone 7, it’s not the desired effect.

It’s not just the brand image that has taken a hit but the trading shares to, which fell more than 8 percent, its biggest drop since 2008, and knocking $17billion off the company’s market value3. The short lived timeline of the Note7 has become international news across the media, ensuring that Samsung’s customers and competitors know exactly how much they’ve messed up. There is no simple matter of smoothing this over and it’s going to require a strong long term strategy.

Bring on the brand contingency plan

The situation speaks for itself in terms of how much damage has been done, and what is undeniable is that Samsung need to manage this unexpected outcome in a seamless manner (they can’t handle another embarrassment). A contingency plan is more or less a back-up plan, and it is exactly what Samsung need. Devising a plan that will allow them to control the backlash is the best way forward, allowing them to prevent any further damage to the brand.

Samsung is already making steps towards controlling the chaos, by releasing official statements to the media they can selectively choose the information the wish to share with the public, and will dispel false information and rumours from circulating. Furthermore, they will need to rely on the big picture to regain customer trust, and turn to other flagship products to nudge them back into success, such as the upcoming Galaxy S8. One of the biggest assets Samsung has to help them is the fact that they are Samsung, and by deflecting away from the car crash that was the Note7 it will remind customers of why they trusted Samsung in the first place.

The nature of the disaster means that safety concerns will be a new fear amongst customers, so they will need to dive straight into addressing safety measures and showing the public in all possible ways that this will never happen again. There’s speculation that Samsung will attempt to contain the concerns by sacrificing the entire Note series; by ending the production of present and future Note models, Samsung may be able to save other series from suffering as a consequence.

Will Samsung get a happily ever after?

There’s no need to feel sorry for them – Samsung are still a billion-dollar company that is going nowhere anytime soon. However, they aren’t going to shake off this blunder easily, and for the next few years will have the entire technology industry watching them with a close eye to see how they bounce back from this.

 

Sources:

1 http://www.samsung.com/uk/note7exchange/

2 https://www.cpsc.gov/Recalls/2016/Samsung-Recalls-Galaxy-Note7-Smartphones/

3 http://www.nytimes.com/2016/10/12/business/international/samsung-galaxy-note7-terminated.html

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