Once again, we are the observers in what will become another in the great ‘How to manage a marketing cluster****’ course.
I am talking about the public reaction of Samsung to the exploding Galaxy Note 7 phone.
Recent history is littered with lessons on both sides of the equation, how best to handle the meltdown as it happens, and how to really stuff it up. You would think that an operation with the size and apparent sophistication of Samsung would have learnt, but it seems not.
The Galaxy 7 was launched in August, in a race to beat Apple to the market with their new ‘Apple iPhone 7’. There were almost immediately reports of the batteries blowing up, initially treated with some scepticism, as the fail safe levels built into the design and regulatory testing regimes should have identified any problems. Ooops… Samsung test their own batteries, whereas others all have third party tests done.
At the point of recall, Samsung had produced 2.5 million units, sold about 2 million, and there have been 35 reported explosions. Not quite a 1 in a million chance, but not far off it, so I guess they just thought it a minor glitch.
On October 10, Samsung announced ‘We are temporarily adjusting the Galaxy Note 7 production schedule in order to take further steps to ensure quality and safety matters.’ For the couple of weeks prior, Samsung had been recalling the phones, but calling it an ‘Exchange program’. When a couple of the exchanged phones also went ‘Boom’ they ended production, with the ‘temporary’ announcement above.
From October 11 until October 17, when the US Federal Aviation Authority put on a blanket ban on carrying the device, describing it as ‘forbidden hazardous material’ airlines had started banning carrying the Note 7 on board off their own bat, recognising the public concern and real safety question.
There is a pretty large gap between ‘forbidden hazardous material’ and an ‘exchange program’.
Samsung’s statements are in competition for the ‘Biggest Blooper-statement in history’ Oscar with then BP Managing Director Tony Hayward who said ‘There is no-one who wants this thing over more than I do. You know I want my life back’ in the days after Deepwater Horizon blew up in April 2010.
By contrast, when Arnott’s had a recall of Monte Carlo biscuits in 1997 prompted by an extortion bid, MD Chris Roberts was up front, recalling all Arnott’s products from the retail trade, explaining the reason and how Arnott’s was dealing with it. While it cost a lot of money, the Arnott’s brand was probably enhanced in the long term. Similarly, in 1982 Tylenol, the market leading US analgesic brand was found to have caused the death of a young woman after she consumed a poisoned pill. Johnson & Johnson immediately recalled all Tylenol from the shelves, and committed to completely redesigning the packaging to ensure tamper evidence. J&J garnered considerable public support, and Tylenol rapidly regained their market leading position after the relaunch.
These are just a few of the best known but very many examples Samsung should have considered. Had they done so, the short term cost would not have been as high, and the damage to the brand not as severe. Coming on top of the recent exploding washing machine episodes you would have thought they had sufficient practise to get it right.
The cost to Samsung will be huge, in both short term cash losses and longer term damage to the brand. Apple must be loving this!
As an aside, you would think that Samsung would have taken down their digital marketing material on the device, particularly with the tag-line ‘Rethink what a phone can do” but at the time of post publication, had not.