Samsung is on fire
Tom Dougherty, CEO – Stealing Share
13 October 2016
Galaxy Note 7 fire hazard disaster
Sure an exploding or smoldering smart phone is not a product feature in even the most optimistic consumer’s mind.
But, could this product recall seriously and permanently damage this mega-brand consumer products company?
In a word. Maybe.
Brands have meaning to consumers and great brands have great emotional meaning to customers. They associate with that brand meaning and, because that association should be about the customer and not the product, it becomes personal.
It’s the Nike promise that you should just do it. Forget the distractions. Keep focused because YOU are a winner for choosing Nike (read about the NIKE brand here). That is the power of BRAND.
I am trying to think about Samsung. What does the brand MEAN? Does the Galaxy Note 7 fire hazard in any way damage that association? I think it does and here is why.
Samsung is the largest electronics company in South Korea. It makes quality products and has infiltrated almost every category of consumer electronics. But it has a very poorly defined brand promise.
It might not be fair to dis Samsung as lacking in innovation but I think the market does not view it as being an innovator in any way. It is a fast follower. Often copying the market leader’s products with a slightly cheaper (value) positioning.
This model has allowed them to steal the thunder from many storied brands. Take Son (Read about the Sony brands here) for instance. Its Trinitron TV brand reinvented the category.
Sony even led the way in flat screen innovation. But Samsung copied those products and dared to make side by side comparisons of product features — all with a value twist. The result? Growth in market share.
Galaxy Note 7 fire hazard has reshaped the smart phone pecking order
Same is true with the smart phone. Everyone knows the category was invented by Apple.
Even the courts backed up that statement. Samsung entered the category with a cheaper reproduction and an nearly all-open sourced operating system. Side-by-side comparisons with the iPhone showed similar capabilities at about 50% of the cost.
But the Galaxy Note 7 fire hazard has undone much of that value cache. The great enemy of value brands is an underlying and almost universal human belief that, at the end of the day, you ALWAYS get what you pay for.
Customers who invest their emotional soul to value brands sit around waiting for the shoe to drop and hoping it does not.
Want proof? Ask Value Jet.(Read about the fire that burned up an airline here: ValueJet). A failure by a low cost provider can be fatal to the brand.
You are reminded of it every time you fly on a US passenger airline because they warn you before boarding that, having a Samsung Galaxy Note 7 turned on or charging, is forbidden because of the recall.
To survive, Samsung might have to double down on its value proposition and make the risk worth the reward by gutting its profit margins.
Or it could call us and we could help them create a REAL brand that incorporates brand repair with a new juggernaut of meaning.
Samsung won’t call however. It thinks brand is a logo and name. But there is no need to change either. There is a need to change the meaning.
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