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Samsung Note 7 fiasco: Brand trust is not eroded overnight, say experts

Korean electronics major Samsung has been facing a lot of flak globally over its Samsung Galaxy Note 7 smartphone. The high-end phone has been facing critical battery issues and videos of the Note 7 phones on fire have been widely circulated on social media. So serious is the issue that airlines all over the world have banned the Samsung Galaxy Note 7 citing security risk.

Samsung has now gone on damage control mode and has permanently stopped the sale and production of the Galaxy Note 7 smartphones. The company has also asked its customers not to use the phones as it continues its investigations into the fiasco.

Is it a case of too little, too late? Should the company have done more? What next for the company? Adgully spoke to some industry experts to know more.

Impact on the overall Samsung brand

 Harish Bijoor, Brand Expert & Founder, Harish Bijoor Consults Inc, remarked, “I do believe the brand is stirred and shaken. Both. Samsung will, however, recoup from it all. Samsung is much more than Galaxy Note 7. It is possibly the only company across all screens available today: the mobile screen, the tablet screen, the desktop screen, the laptop screen, and more.

KV Sridhar, who recently stepped down as Chief Creative Officer of SapientNitro India, opined, “I think going by what had happened in the past – whether it was colas or chocolates or any other category where they had a temporary setback – it is nothing new. A faulty line is always there, even Apple had problem and issues, automobile brands have these issues all the time. I think it will have a temporary impact, but in the long run they will be alright as far as the brand is concerned. Sure, there could be some financial loss for the time being, then there could be some impact on the product range, but it won’t be for the long run, only short term, I feel.

Rajat Agrawal, Editor, BGR.in, noted that there would be some impact on the high-end segment of smartphones, but he doesn’t see it impacting the overall Samsung brand in India. “Samsung had not launched the Galaxy Note 7 in India, which I believe, helped to dampen the impact of the exploding battery fiasco, unlike in the US and other international markets where it had launched. However, the warnings against Samsung Galaxy Note 7 at airports and in-flight announcements could make some high spending customers move away from the brand,” he added.

What more should Samsung do?

While Sridhar called for more transparency on the part of Samsung, Bijoor was emphatic that recall and refund weren’t enough. Agrawal felt that Samsung should have been more proactive with its communication. 

Sridhar remarked, “I think in cases like this, the more transparent, honest and open you are, the more conversations you have with people, the more secure they feel. On the contrary, the lesser communication you have with the consumers, the more will be the speculations. True, mistakes happen, but they can be corrected. But there is the need to be very honest and transparent about it, rather than be silent, that would be my advice to them. 

“It is important to get back into the realm of consumer trust,” stressed Bijoor. Agreeing with Sridhar, he said, “The best thing to do is be transparent about it all. Consumers love transparent companies and transparent brands. Particularly in this space.”

Because Samsung has not been proactive with its communication, it has sent out a confusing message to those who had pre-ordered the Galaxy Note 7 in India, felt Agrawal, who further said that those loyal customers could have been handled better. “After the recall and refund, there is very little left for Samsung to do with respect to the Galaxy Note 7 and its customers. However, it still isn’t clear what caused the batteries to explode and Samsung should come out with its findings in a transparent manner as soon as possible in order to retain customer trust,” he added.

Rebuilding consumer trust

While Bijoor felt that six months flat was a long period of time for rebuilding consumer trust and confidence in the brand when such incidents happened, Sridhar, on the other hand, noted that it had nothing to with the larger brand issue. “It is a product and a model that has developed some defect and they have called back the product from the market and are fixing it the problems. It doesn’t mean that the other products of Samsung will suffer. People are mature enough to understand that there could be a temporary dip and usually it takes 3-6 months or a quarter or two for things to settle down. After that, they will be back because these are trusted brands, this trust has been built up over the years. Had something like this happened to one of the newer brands, then they might not get a second chance and the damage and impact would have been much higher. Brand trust will not be eroded overnight over one mistake or one product. So, I guess after a couple of quarters they should be back in full form.” 

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