With Samsung’s formal recall of the Galaxy Note 7 amidst news of the mobile phone model spontaneously catching fire and injuring some users, flight bans due to the same and third quarter profits slashed, can the popular consumer brand recover from one of the worst spots in its history?
We do expect at Brand Finance a significant hit to Samsung’s brand strength and brand value in the short-term.
Robert Haigh, director of marketing, Brand Finance
As rival Apple enjoys a ten-month stock high, Samsung also has billions of its share price being knocked off to contend with, and a reputation crisis to manage.
In Seoul, Samsung’s home, consumers are in two minds. Some believe it is the urge to produce at an unrelenting rate which has caused Samsung’s current predicament. Others believe this is only a bump in the road for the conglomorate, and handled the right way, could soon be a thing of the past. With its revenues equivalent to a fifth of the South Korean economy, this could easily be the case.
But has the company done enough to minimise reputation damage and has there been enough transparency about the faulty phone model to encourage consumers to trust in Samsung once again? Some analysts question the lack of publicity in that regard.
“In terms of a public engagement point of view, there are certainly lessons that Samsung can learn,” says Robert Haigh, director of marketing at Brand Finance, a brand valuation consultancy based in London. “The idea that they’ve ‘hidden’ this is perhaps an overstatement, but certainly the idea that they haven’t communicated enough is a fair criticism. They probably will suffer somewhat in terms of consumer trust as a result of that.”
There is also the question of new customers and whether Samsung will be able to grow its market share, considering consumer brand loyalties to other brands in combination with this recent blunder.
“There will be a very significant problem with market share in the short-term,” continues Haigh, “but the truth is in western mature markets, there is already a very high saturation of smart phones, so there is limited scope for the attraction of new customers.”
Also on this episode of Counting the Cost:
Africa’s largest mobile phone market: The mobile phone industry has contributed over $4.5 billion dollars to Nigeria’s economy in the first quarter of this year, alone. All this growth has, however, led to a different set of problems, including network congestion and quality of service. Fines and sanctions on operators have left the country in a flurry of network improvement tasks.
We speak with Bassim Haidar, CEO of the Channel IT Group which brings infrastructure, technologies and services to emeging markets since the early 1990s about the evolution of the challenges facing the mobile industry.
Qatar Airways Boeing shopping spree: Last week, Qatar Airways spent $18.6 billion dollars on up to 100 new airplanes. This comes as part of the airlines’ continuous expansion which has seen the fleet increase from 4 to 188 planes in the last two decades alone. The airlines also flies to 150 destinations and made an estimated $9.8 billion in revenue last year in due course. It is also the world’s third largest air cargo operator.
Akbar Al Baker, CEO of Qatar Airways, spoke to us after the Boeing announcement about the Open Skies agreement, the Airbus delayed delivery debacle and the new cap on aviation emissions.
Sweet taxes: The World Health Organisation (WHO) has urged countries this week to impose taxes on sugary drinks as a means to combat the increasingly alarming obesity crisis. However, with giants like Coca Cola and Pepsi making backhanded moves to protect themselves, such as millions of dollars of donations to health organisations, the route to a healthier diet is a lot more complicated than previously thought.
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