Sulekha NairOct 12, 2016 15:13:49 IST
Samsung, the electronics giant from South Korea, has taken a beating with the explosion of its batteries in its recently launched Note 7 series. The brand, which until Note 7, was a leading smartphone manufacturer and a preferred option for the large majority will have to come out with other options soon to regain its' `favourable’ and `popular’ status with its loyal patrons, especially since it is festive season in India.
In spite of offering to replace the faulty Note 7, the Korean behemoth’s nightmare refused to fade with the replacements also becoming faulty. The loss in real terms to the company is around $17 billion in market value, according to some media reports. There is no official word on that score yet from the company.
The loss of perception and reputation among the public will take a longer while to heal. Some die-hard loyal patrons like architect and designer Yashmi Prasad George prefer the Note (earlier version) is because it is an `excellent’ choice to make sketches. “As a designer, I can use the stylus to make sketches on photographs, a feature which other phones do not allow.”
The Note 7 fracas is being seen by George as a one-off incident. Didn’t Nokia phones too have heating problems, she asks. “I would still opt to upgrade my Samsung to the latest version of Note when it comes. Just because one series from Samsung has gone bust does not mean the brand comes out with bad products,” says the brand loyalist.
Supriya Menon, a research consultant for museums, wonders if Samsung could have outdone Note 2. “The Note 2 is so handy. One would assume a stylus is old-fashioned associated with Blackberry, but in my profession it is very useful. I use it to make notes, make pictures and send them to clients.”
The Note 7 fracas is making Samsung bleed, but most of its loyalists say that besides the phone the high note is that the company has ample service centres where one can interact with `real’ people than nameless, faceless online customer care.
However, the company will have to take big steps to stanch its bleeding reputation and image. Brand specialists feel that though the current situation offers a position of increased advantage to recently launched iPhone 7 and iPhone 7 Plus, it is only a matter of time before Samsung can put the damage behind it just like Volkswagen and Ford did with its recall of cars for fuel leakages and latches, respectively.
Harish Bijoor, Chief Executive Officer of brand and business strategy firm Harish Bijoor Consults Inc, says that brand image is `everything’. “With a financial loss on account of Note 7 to around $20 billion, what one has to factor a short-term loss: immediate loss visible in balance sheet, and this is crucial because it is festive season in India and globally, next quarter is important because of Christmas-New Year,” says Bijoor.
When big brands have had to recall their products and continue to thrive, there is no reason for Samsung not to do so, say experts. “There is no loss of face that is permanent in the online world,” asserts Mahesh Murthy, marketer, venture capitalist, corporate speaker, Founder – Pinstorm and co-founder Seedfund. “There have been many other products that have simply not worked, or worked terribly. Remember Antennagate on the iPhone 4? And how it's almost forgotten today. The right thing to do - which Samsung has done - is to shut the Note 7 line, announce the next line: Note 8 - and carry on.
One major factor that works in Samsung’s favour is its honesty and transparency. “Unlike the House of Tata’s that refused to address the issue of burning Nano cars which I would term as arrogance, Samsung has gone all out to replace the faulty phones and has taken proactive measures to contain the damage openly,” says Prahlad Kakkar, advertising filmmaker.
Kakkar says that though the faulty Note 7 will cost the company dear with regard to its bottom lines and also given that the US air-safety regulators banned the device on flights, there is nothing to stop Samsung from recouping its loss. “The fact is that Samsung was up there with iPhone 7 in terms of performance, but this setback will work to iPhone’s advantage," says Kakkar. He feels that the iPhones are ‘hugely overpriced’ and Samsung was able to offer a good alternative with an affordable price.
“It will take a couple of years for Samsung to regain its position in the global smartphone arena,” says Kakkar. “However, this is only a temporary setback. The company won’t lose its reputation on account of Note 7,” asserts Kakkar.
The company will not have to spend money on any brand exercise, says Murthy. “I think all that Samsung needs to come out and say, ‘Sorry, we screwed up on the Note 7. We’re sorry. It won't happen again. Here’s the new Samsung Galaxy Note 8. Try it; it’s awesome.”
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