How Samsung’s brand reputation plummeted from 7 to 49
The Samsung Galaxy Note 7 smartphone has become notorious for spontaneously exploding. The owner of the Jeep in the pic above had a Note 7 charging on the dashboard when it exploded and set his vehicle on fire.
Events such as this has led to the Note 7 being banned from carriage on many airlines, and eventually triggered a worldwide recall of the model in November 2016 that cost Samsung $5 billion.
Having your smartphone catch fire seemingly at random does not instil confidence in consumers. And so the Samsung brand has plummeted from 7th to 49th in the most recent brand reputation survey, the US Reputation Quotient Ratings, released by Harris Poll, after coming an impressive 3rd in 2015. Ratings agency Fitch Thursday said that the potential long-term brand damage from Samsung’s move to scrap the Galaxy Note 7 was a greater threat to the Korean smartphone maker’s A+ or stable credit profile, rather than a direct financial impact.
Brand intangibles such as customer loyalty, prestige and positive brand recognition are Samsung’s most valuable asset, and clawing back a damaged corporate reputation can be a long, painful and expensive business. Just ask German carmaker VW, which is still trying to restore its good name following last year’s emissions scandal, when it was revealed to have used software to lower how much pollution its diesel engines released under test conditions.
Samsung are now in the throes of launching the Galaxy S8, and their biggest battle is convincing the public that the phone won’t explode in their pocket. Well I guess that’s half the battle – the other half is actually making sure it doesn’t.
Needless to say there is a lot riding on this phone, not only as it is their flagship product, but Samsung will also be looking to make up lost earnings from the explosive Note 7.
Samsung’s mission statement is “Inspire the world, create the future”. I hope they get it right this time round.