Background of Samsung S7 Fiasco
Communication forms the backbone of any business organization. Effective communication strategies adopted by the business set the right positioning for the brand and build a connection between the brand and its stakeholders (Guffey & Loewy, 2012). Businesses are seen communicating with their customers in the form of media, PR, customer service, customer relationship management strategies and recently, Social media (Meredith, 2012). This report throws light upon a major issue faced by electronics giant Samsung over the S7 fiasco. The organization underwent troubled waters and immense loss during the case. The brand confirmed an estimated loss of over $ 3 billion (Tuttle, 2016). However, it was only the effective communication strategies adopted by the brand that saved the brand’s positioning in the market.
Samsung S7 was one of the most anticipated mobile phones since the time it was announced in the market. The mobile phone model was launched on 2 August, 2016. The device had already created a buzz in the market and hence many people had pre-booked the phone. Once the device was launched, the demand continued to grow for some time. However, by the end of August things started going downhill. The first Samsung galaxy S7 explosion was reported on August 24, 2016 in China. The device exploded when it was charging and by the end of August, over 30 smartphone explosions had been reported (Hartley, 2017).
On 2 September, 2016, after analyzing the issue to an extent, Samsung released a public statement announcing that the brand will replace the current S7 with a new one (Samsung, 2016). This worldwide recall of a particular smartphone model was the largest in consumer electronics history (Dempsey, 2016). Samsung urged the users to return their smartphones at the earliest. The brand even announced an over the air update that would limit the charging of the phone to 60% (First Post, 2016).
The brand’s shares started plummeting and it was losing trust (Shamsey et. al., 2017). Customers from across the globe resorted to social media to complaint about the brand.
The brand image for Samsung was at a toss and it was imperative that the brand responds to the issue in a planned and highly effective manner.
It has often been seen that various organizations and even leading businesses face severe wrath over a bad quality product. However, it is the response of the business to its stakeholders as well as its attempt to communicate with them that creates a protective shield around the brand. The very first rule of communicating under a crisis is to apologize and control the panic that has occurred.
Importance of Effective Communication Strategies during a Crisis
Samsung resorted to all communication channels including their own website, official social media pages, media releases and new reports to apologize for the mistake that occurred at their end. The brand asked all customers to return their phone, promised to deeply analyze the issue and fix it at its very core.
Channel of communication at the time of a crisis communication plays a significant role in addressing the issue (Schultz, 2011). Samsung understood this and resorted to all possible channels to address the issues. A brand can initiate a communication with stakeholders either through public platforms and reach out to a wide audience or they can communicate in a one on one manner and demonstrate excellence of service. At this time, Samsung did both. The social media channels and media reports aim to engage audience at large and calm the situation (Veil et. al., 2012). On the other hand, Samsung further tightened its customer service centers, increased the number of temporary recruits and ensured that anyone who gets in touch with the brand gets his or her issue resolved.
Samsung even organized various press releases and media interviews and accepted its mistake and addressed the issue. At such a time, an organization could have completely ignored the press and focused on resolving the issue. But Samsung’s head of business mobile division, Koh Dong-jin, personally ensured that the seniors of the business be present in all the media conferences and take responsibility for the issue.
Individual perception plays a significant role in any form of communication (Coombs & Holladay, 2011). Individual attitudes, values and even psychological state largely impacts their perception of the communication message. Some of the customers were furious and completely boycotted the use of Samsung and on the other hand, most of the customers continued to hold trust in the brand. Reuter’s survey poll resulted that a whopping 91% of the current Samsung customers are likely to buy their next phone from Samsung only (Dazeinfo, 2018). This is the kind of loyalty that Samsung needed at this point of time. This loyalty and immense trust in the brand is not just a result of years of excellent service but also years of impeccable communication strategies adopted by Samsung.
Samsung even resorted to publishing a page long apology in the newspaper. Even the press conference was apologetic and thorough. The company took complete responsibility and promised its stakeholders to fix the issue. It is important to note that all of these announcements from Samsung came at a strategically planned time. Koh had announced the results of the investigation just a few days before Samsung reported its highest quarterly profits in three years. This further built trust among consumers of the brand.
Samsung’s Communication Strategies during the S7 Fiasco
An effective communication process can be broken down into 8 essential components. Fortunately for the brand, Samsung aced at all of these 8 components to ensure the efficacy of their communication during this tough time.
Source is the person who sends the message. Samsung was careful about ensuring the most appropriate source of all communications made by the brand. While announcing the recall, the message was sent by the chief operational office, Tim Baxter. Country heads made apologies and onus of resolving customer issues in their particular countries. It was evident that all the leaders of the brand are taking complete responsibility.
The messages transmitted by the brand were humble, carefully curated and had an emotional appeal as well as a future plan of action.
Channel is the way in which the message travels between the sender and the receiver (McQuail & Windahl, 2015). Samsung resorted to every possible channel to reach out to its customers and be available for them. Social media including the brand’s official Facebook and Twitter account gave live updates many times in a day. The brand itself called upon press releases to leave no room for speculation and even resorted to print media as a channel of communication.
Samsung customers were the receivers and given their unabashed loyalty to the brand, it is safe to assume that they understood the context of the message by the firm.
Responding to the source intentionally or unintentionally is a way of giving feedback. Samsung customers took to social media to write about the brand and this was their way of providing feedback. Many customers even demonstrated support and loyalty towards the brand.
The global environment at the time of a crisis is that of stiff competition and when customer centricity takes a foreground.
The language and tone of communication was formal but added a personal touch which gave the message an emotional appeal. Context is all about what communicators expect from each other (Neuendorf, 2016). Samsung handled the situation in a manner that was expected by such a strong brand.
Interference is anything that blocks or changes the source’s intended message. The immense wrath on social media and funny tweets from people across the globe acted as an interference.
Conclusion
Samsung is a leading name in the consumer electronics segment. 2016 proved to be a tough year for the brand owing to the explosions caused in one of the most anticipated models of the year. Samsung faced immense wrath over the issue for a long time. However, Samsung set a perfect example of handling crisis communication in an effective manner.
Impact of Effective Communication on Samsung’s Image
The organization took complete responsibility for the problem faced by its customers. The brand took to every leading communication channel and platform to apologize for the inconvenience cause. The brand even ensured to improve its customer service centers during this tough phase in order to be available for the customers who contact the brand. Eventually, the brand recalled all the phones and replaced them with new ones. The cancelled pre-orders were refunded in an effective manner.
Communication strategies adopted by Samsung during this phase have truly garnered trust among employees. It was perfect timing, context and channel of message that hit the nail right on top and ensured that the brand calms the panic and restores trust. Overtime, it would be safe to say that Samsung will not be known as a company that made exploding phones but it will be known as a company that made exploding phones but embarked on the road of redemption, earned customer loyalty and continued to generate mammoth revenues for the brand.
References
Coombs, W.T. and Holladay, S.J. eds., 2011. The handbook of crisis communication (Vol. 22). John Wiley & Sons.
Daze Info, 2018. ‘Samsung customers remain loyal despite S7 fiasco’. Available at https://www.firstpost.com/tech/news-analysis/the-samsung-galaxy-note-7-fiasco-a-blow-by-blow-account-3695113.html. Accessed on 3 May, 2018.
Dempsey, P., 2016. The Teardown: Samsung Galaxy S7. Engineering & Technology, 11(4), pp.82-83.
First Post, 2016. ‘Samsung galaxy Note 7’. Available at https://www.firstpost.com/tech/news-analysis/the-samsung-galaxy-note-7-fiasco-a-blow-by-blow-account-3695113.html. Accessed on 3 May, 2018.
Guffey, M.E. and Loewy, D., 2012. Essentials of business communication. Cengage Learning. United States.
Hartley, S., 2017. The case of the exploding Samsung phones. Busidate, 25(1), p.9.
McQuail, D. and Windahl, S., 2015. Communication models for the study of mass communications. Routledge.
Meredith, M.J., 2012. Strategic communication and social media: An MBA course from a business communication perspective. Business Communication Quarterly, 75(1), pp.89-95.
Neuendorf, K.A., 2016. The content analysis guidebook. Sage. United Kingdom.
Samsung, 2016. ‘Samsung will replace current Note 7 with new one’. Available at https://news.samsung.com/global/statement-on-galaxy-note7. Accessed on 3 May, 2018.
Schultz, F., Utz, S. and Göritz, A., 2011. Is the medium the message? Perceptions of and reactions to crisis communication via twitter, blogs and traditional media. Public relations review, 37(1), pp.20-27.
Shamsi, A.F., Ali, M.H. and Kazmi, S.S., 2017. Samsung Note 7-An Unprecedented Recall That Created History: Exploding Phones Recovered–Exploded Trust?. International Journal of Experiential Learning & Case Studies, 2(1), pp.44-57.
Tuttle, H., 2016. Samsung’s vertical integration challenge. Risk Management, 63(10), p.6.
Veil, S.R., Buehner, T. and Palenchar, M.J., 2011. A work?in?process literature review: Incorporating social media in risk and crisis communication. Journal of contingencies and crisis management, 19(2), pp.110-122.
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