research paper

Running head: ROLE OF PUBLIC RELATIONS IN SOLVING CRISIS IN SAMSUNG 0

Role of Public Relations in Solving Crisis in Samsung Company, 2016

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Abstract 3

Public Relation (PR) is an important aspect of every company. Every firm strives to improve their market viability so that they can have a competitive advantage in the given market. Samsung Corporation has been at the forefront of the technology industry as depicted by the market growth and development of innovative products and services to their consumers. However, the recent problem that arose from Samsung Galaxy Note 7 in 2016 has adversely affected the operations of the company. This research will critically evaluate the relationship between PR and Galaxy Note 7 in 2016. Additionally, the paper will expound on the role of PR in solving the crisis and ensuring everyone was satisfied with the measures taken by the company.

Role of Public Relations in Solving Crisis in Samsung Company, 2016

Introduction

With the growth and development in the economic, social, and technological aspects, it has become necessary for businesses to encompass PR as an operational element. PR is a broad and complicated field that requires proper understanding of firm mechanisms regarding operation and marketing. Most people are always uncertain on the tasks that are undertaken by PR agencies. There is confusion between advertising and PR agencies in the business world. Unlike advertising agencies, the PR firms focus promoting individuals and companies through avenues such as magazines, TV programs, websites, and newspapers. The Public Relations Society of America (PRSA) has defined PR as “anticipating, analyzing, and interpreting public opinion, attitudes, and issues that might impact, for good or ill, the operations and plans of the organization” (Coombs & Holladay, 2013). From the definition, it is clear that PR is all about protecting the reputation and credibility of a given company in the market. Media provides an appropriate channel for PR agencies to protect their clients. For example, they can find positive messages and ensure that they are positively translated into media stories. On the other hand, when faced with bad or negative news, the PR agency should formulate a framework that responds and mitigates the damage in the best way possible. A PR agency is measured by its ability to assist their clients to manage their audience successfully (Coombs & Holladay, 2013). Every agency should be an excellent listener to the marketplace and have practical conversational techniques such that they can differentiate what might work or not. Since there is reliance on media, most of the publicists are usually media personalities. In this case, they know the best ways to pitch their stories and ensure that they can appeal to intended audience. PR firms have the capacity to give an honest opinion on the condition of the company because they have not been employed (Coombs & Holladay, 2013). Moreover, there should be a strong relationship between the agency and client. For example, it is the duty of the customer to inform the company regarding the messages that need to be addressed. On the other hand, the PR agency should help the firm in improving their visibility in the market. PR played a significant role in solving the crisis in Samsung Company in 2016. The company relied on the PR ability to address the problems that arose from Galaxy Note 7.

Brief Summary of Samsung Galaxy Note 7

Samsung Corporation is one of the leading technological firms in the world. Its primary competitor is Apple Inc. Often, the competition is usually intense because each firm seeks to gain a given share in the global market. The struggle has forced Samsung and Apple to develop products and services that are unique in nature (Lopez, 2017). Additionally, the goods should have the ability to attract consumers and compete fairly with others in the market. Therefore, the creation of Galaxy Note 7 in 2016 was intended to give the company a competitive edge in the already flooded market. The initiation of the device was a success because it recorded massive preorders and sales across the globe (Lopez, 2017). The sales began in August 2016. However, the sales started to decline from September due to the technical glitches that arose from the phone. Samsung was forced to initiate a recall from September because the Galaxy Note 7 had faulty batteries that overheated and exploded when charged (Lopez, 2017). The massive complaints across the world had a detrimental effect on the sales and company as a whole. Statistics show that by October Samsung had recalled over two million devices (Dipert, 2017). On the other hand, it had to discontinue its production in the market. The recall had an effect on the financial status of the company because it cost $5.3 billion (Dipert, 2017).

Samsung’s PR Strategy in Handling Galaxy Note 7

Brand Establishment

The primary role of a PR in a company is to help in establishing a brand. In the case of Samsung, the brand had already been created and well positioned in the market. There has been a tremendous growth in Samsung as depicted by the innovative products. The company has massively invested in the research and design as means to ensure that their products and services can compete with Apple in the mobile market. PR is the ability to guarantee protection for both the company and customers (Coombs & Holladay, 2013). Samsung Galaxy Note 7 was seen as a threat to the consumers. The act to recall was an element of PR because the company wanted to guarantee safety to them. On the other hand, Samsung’s reputation would still exist due to their fast rate of approach to the matter. There was a need to avoid further escalation of the issue in the market. In the long run, the recall helped in cushioning the viability of Samsung in the market because it assisted in protecting other mobile lines and goods that were offered by the firm. People feel valued when they are given priorities. There is a relationship between PR and power. It is clear that PR played a significant role in the Samsung crisis by empowering consumers on their right to return the devices and get a refund. The ability of Samsung to acknowledge its faults was an active PR function. It gave the consumers the opportunity to feel empowered that the product did not meet their set standards. Hence, they had the power to return them and receive a refund. The PR strategy was outstanding because it eliminated the chance for consumers to sue the company in a court of law. Samsung played the role of a victim in their production standards. The ability to play victim portrays the active role of PR in the company. Samsung established the facts, apologized and took immediate action. PR should be an active process as in the case of Samsung response to Galaxy Note 7 technical failure in the market. For example, Samsung worked efficiently to ascertain the origin of the problem and identified the issue with an objective of finding an appropriate solution (Lopez, 2017). The acknowledging the fault and apologizing helped in improving the company reputation in the market. Technology is prone to hitches. There should always be backup plans to remedy the situation. Although the problem of product recall and technicalities are common, it is the process of handling them that matters. Consumers are very sensitive on how the company approaches them. The presence of PR is to put the concerns of the customers at the forefront because they are the primary reason as to the existence of the company. A corporation should be proactive in establishing facts and apologizing to their consumers through platforms such as media.

Language

Language is an important aspect of PR. A PR agency should know how to distinguish their internal and external language in the market. The usage of a certain language form can have both positive and adverse effect on the message delivered to the audience. Language can make or break the relationship between the company and their loyal customer base. Good knowledge of PR implies the proper understanding of the dynamics in the market and finding appropriate ways to deal with the challenges (Coombs & Holladay, 2013). Although the role of PR was clear in Samsung strive to solve the crisis, there were areas that the company failed to address. Samsung Corporation was not honest regarding the issue at the beginning. The first statement claimed to have “identified the affected inventory and stopped sales and shipments of those devices.” However, the matter was beyond the suppliers because the replacements were also exploding. The issue led to more questions than answers from the loyal consumers. It showed that the company did not have enough facts on the prevailing conditions. People began to lose trust on Galaxy Note 7 though the company apologized. The rebuilding of the lost consumer trust would require full transparency in the process. The presence of PR ensured that Samsung regained from the 2016 crisis through the establishment of public loyalty that had been lost. The company has been able to reclaim the lost trust by offering compensation to the affected parties. Moreover, Samsung provided an opportunity whereby customers would exchange the devices with different models. The firm also offered mobile credits and coupons.

Preparedness

PR promotes preparedness. Information is everything in PR. It is crucial to have adequate information because it helps in formulating an appropriate preparation mechanism. Samsung crisis was hard to address because the company did not have sufficient information on what was happening in the market. Galaxy Note 7 was designed such that it addressed the weaknesses presented by other devices. The smartphone had a 5.7-inch display with an exemplary performance regarding the speed and memory capacities (Dipert, 2017). The good reviews were short lived. The PR agencies contracted by Samsung had done their best to place the Galaxy Note 7 on the global map since its launch. However, when the first case of the explosion was reported, the PR had to do their best to mitigate the emerging challenge. The preparedness of Samsung was measured by their ability to recall the product which had already been sold globally. PR was very effective in the recall process. They ensured that all parties ranging from the suppliers, media, and relevant agencies knew that they had an intention of achieving a 100 percent return rate (Lopez, 2017). In this case, it meant that there would be no Galaxy Note 7 in circulation across the world. The strategy was possible because Samsung achieved a return rate of 96 percent after three months of launching the product in the market. It implies that the company was fully prepared for any eventuality that could arise from device failure.

Appointment of Distinct Persons

The assignment of distinct persons to address the issue was also a PR strategy. A company is made up of many individuals who are responsible for executing particular tasks. However, in the issues facing Samsung, it was necessary to have specific people tasked with responding to queries raised by the customers. Since it was a worldwide problem, the company had to establish a division comprising of engineers and financial experts who would access the condition brought by the failure of Galaxy Note 7. Tim Baxter, the chief executive officer (CEO) of Samsung Corporation, was at the forefront in addressing the issue (Lopez, 2017). In most cases, it is a good PR mechanism for top management to participate in solving the crisis in the organization (Coombs & Holladay, 2013). On the other hand, the consumers would be satisfied because they acknowledge the fact that the top management knows about the problem and are working out for suitable solutions. Baxter stated that the Galaxy Note 7 was the first digital recall of the century (Lopez, 2017). The presence of individual spokesperson helps in reinforcing the message to the consumers. It is easier to convince a person by using one source rather than many because it may look unsound in the long run. For example, the statement “Technology innovation is important to Samsung, but our customer’s safety is more important. We want to reinstate trust in the brand,” by Dong-Jin Koh, a representative of Samsung Electronics portrays a lot regarding the company (Lopez, 2017). The affected consumers can be easily convinced that it was not the fault or wish of Samsung that Galaxy Note 7 experienced the problem. The company wanted to provide a product that meets the need and wants of the customers. Additionally, PR requires that the persons mandated to address the challenges in the company observe timeliness. In the case of Samsung crisis in 2016, the appointed spokespeople failed to observe the initial time. There were no messages at the beginning of the crisis. Samsung avoided the issue during the first stages because it considered it minor. The neglect opened a window for negative press releases regarding Galaxy Note 7. If the responsible persons had held interviews at the early stages, there would be minimal damage to the brand and reputation of Samsung (Lopez, 2017). Therefore, an appointed spokesperson is an excellent agent of PR.

Social Media

PR has become a necessity in the 21st century. The growth and development of technologies such as social media have made it hard for companies to operate in the market. Social media platforms such as Twitter, Facebook, Youtube, and Instagram have forced businesses to ensure that their goods and services meet the required standards. There is a fast spread of information through social media. In most cases, the platforms are not monitored. As a result, dissatisfied consumers find the platform pivotal in relaying their grievances. Social media hugely escalated Galaxy Note 7 crisis in 2016 (Dipert, 2017). People who did not have an idea on the happenings were quickly informed as long as they were members of the social media platforms. The reaction of customers showed the transformation of PR from a traditional to the modern perspective of issues. Social media has a significant impact on PR because it ensures that customer’s feedback is everywhere hence providing no means of controlling them. Since it cannot be shut, potential clients have the opportunity to research relevant information regarding a product before making any informed decision. Thus, it is complicated to engage in PR, especially in negative feedbacks. In the past before the adoption of social media, agitated customers would air their grievances on the company’s website or customer service agent on the phone. In this case, the role of PR was easy because the availed negative information would be controlled from being known by potential clients. For example, Twitter has been a problem in PR. Millions can retweet bad reviews and comments on the platform. Controlling the tweets require careful monitoring of the platforms. The Samsung Galaxy Note 7 crisis changed ways through which corporations should improve their relationship with consumers on the platform.

Samsung through their social media accounts on Facebook, Twitter, and Instagram have been pivotal in improving communication and responses to the ever-emerging issues in the company. In social media, PR is measured by the reply ability to the grievances aired by the consumers on the platform. Moreover, during the crisis, Samsung correctly used the social media platforms to update their clients on the problem regarding Galaxy Note 7 (Dipert, 2017). People did not have to visit their websites or buy a newspaper. Interested parties had just to follow their social media handles if they need clarifications on certain matters. Media statement is important in social media (Lopez, 2017). Once it is shared on the social media, there is no way that it can be changed back. It implies that the company must gather their facts properly before engaging in any step. When a negative review is posted, the issue will not go away. Public relation is evident by the ability of a company to keep updated on social media happenings. On the other hand, the engagement should always be live in nature. Samsung managed the crisis through their twitter handle @SamsungMobile (Lopez, 2017). However, the presence of spoof accounts has been a challenge in PR. It is hard for PR firms to contain the information portrayed by the pseudo accounts. For example, people tend to believe the information given by the spoof accounts carry some truth. The role of PR was evident in the management of social media accounts. At first, there was a slow response to adverse comments on the platforms. However, as the problem continued, Samsung was forced to monitor their social media accounts regularly to counter the accusations. Platforms such as Twitter gave Samsung a good channel to provide vital updates on their progress. Samsung continues to combat the negativity in powerful means to this date.

Listening to Silent Voices

The PR ability to assist the company and clients lies in listening to the silent voices in the marketplace. Being a good listener is essential in understanding the dynamics of the organization. Samsung was able to address the problem with ease as a result of listening to the customer’s reviews on various platforms. On the other hand, Samsung would have resolved the problem if it had listened to the complaints of the low-level management. For example, there is a high likelihood that low-level employees sensed that there would be a problem with the Galaxy Note 7 but feared being victimized by the top-level management as an act of sabotage. PR would have ensured that the issue is well addressed before the products are released into the market. Samsung had been able to establish media tools that assisted them in listening and understanding the various forms of conversations that consumers had regarding their products. The voices of the silent majority in the market should not be neglected. They can quickly influence public opinion through their negative criticism of company’s goods and services. Therefore, the role of PR in Samsung crisis in 2016 was to provide effective listening to the grievances of people and develop a framework based on their thoughts and opinion.

Problem-solving Facilitator

The role of PR as a problem-solving facilitator was also evident in Samsung crisis. The problem of Galaxy Note 7 was due to the faulty battery. There was fear among the consumers because of explosions, fires, and toxic emissions of fumes. The batteries acted as a catalyst for external fires as posed by reports from customers. There were two suppliers of the batteries during the launch of the device in August namely ATL and Samsung SDI subsidiary (Dipert, 2017). At the initial stage, the company believed that the problem arose from batteries that were supplied by SDI were faulty. The acknowledgment of the problem origin forced Samsung to replace the Galaxy Note 7 provided by SDI with those supplied by ATL (Dipert, 2017). However, when the ATL batteries proved to be faulty, Samsung had to recall the whole lot of Galaxy Note 7 present in the market. The company had to work with the United States (U.S.) Consumer Product Safety Commission as a PR strategy to instill the notion of recall among the customers (Dipert, 2017). The clients had to contact their network operators or places of purchase for a full refund or switch with other available Samsung products. The role of PR was also evident in during the recall process. The users of Galaxy Note 7 were required to power down the device with the help of special gloves provided by the firm. The ‘fireproof’ packing was PR by Samsung to show care and safety of their clients (Lopez, 2017). Samsung even went further in the PR effort on people who were not ready to surrender their Galaxy Note 7 (Dipert, 2017). The company forced them to return the devices by disconnecting their services. Data, texts, and calls are some of the services that Samsung threatened to impose on the consumers who were using the phones. As a PR strategy, the firm ensured that the information regarding the recall was well published across the media platforms so that people acknowledge the need to return the devices for replacement or refund.

Conclusion

In conclusion, PR plays a significant role in the management of the crisis. It assists in improving the brand and reputation of the company in the market. Samsung Corporation faced a major crisis in 2016 that adversely influenced their operations and financial capabilities. However, the employment of PR ensured that the company remained afloat in the marketplace. In the long run, the presence of PR convinced the consumers that Samsung had placed their safety as a priority. The business put a lot of efforts in trying to work with the clients who experienced challenges while using their products. Although the customers were not happy and satisfied, the role of PR in handling the crisis helped to instill confidence among the clients.

References

Coombs, W. T., & Holladay, S. J. (2013). It's not just PR: Public relations in society. John Wiley & Sons.

Dipert, B. (2017). Samsung Galaxy Note 7: Explosion diagnosis and prevention. Edn.com. Retrieved 11 June 2017, from http://www.edn.com/Pdf/ViewPdf?contentItemId=4443233

Lopez, M. (2017). Samsung Explains Note 7 Battery Explosions, And Turns Crisis Into Opportunity. Forbes.com. Retrieved 11 June 2017, from https://www.forbes.com/sites/maribellopez/2017/01/22/samsung-reveals-cause-of-note-7-issue-turns-crisis-into-opportunity/#3af8dcb324f1