Samsung on why it chose to take risks and ‘fight complacency’ during its phone crisis

Last year was by no means easy for Samsung with exploding phones and product recalls hitting the brand and its reputation. But in such a competitive smartphone market, slowing down or taking a more risk averse approach was not an option for the brand.

Even at the height of the Galaxy Note 7 scandal, which the brand’s US CMO Marc Mathieu said “he wouldn’t wish on any marketer”, Samsung continued to invest in innovation.

Speaking to Marketing Week at the Cannes Lions Festival, Samsung’s global head of integrated marketing, Pio Schunker, says: “While the recall was happening we were building the Galaxy S8. Most other companies would have pulled back and taken softer measures; most companies would have exercised some degree of caution [but we didn’t].

“It wasn’t that we were throwing caution to the wind, but we were looking at what was happening in the marketplace with our consumers and knew the time was right to really stress who we are and do that through the product.

“In order to shine brightly you have to fight against the enemy of complacency.”

Ultimately the brand ended production of the troublesome Galaxy Note 7 after replacement phones also began catching fire, and it has been on a recovery mission ever since.

Taking a confident approach

Schunker feels this confidence and conviction in its approach has helped Samsung repair some of the brand damage created by the controversy.

He believes it has been helped too by the shift Samsung made two years ago from functional, product-led marketing to a more human and emotional focus, which has enabled the brand to build more meaningful and stable relationships with consumers.

READ MORE: Samsung’s top mobile marketer on being ‘human first’

He says the brand recognised that “just selling product alone in this category was not going to be enough” because people were basing their buying decision on the brand first and foremost before considering the product and its features.

As an example he points to the brand’s ‘Sink’ campaign (above), which showcased the waterproof Galaxy S7 through the story of a guy who meets a girl and is waiting for her to call, but when she eventually does he drops the phone in the sink as he tries to answer it.

This approach was quite a departure for the brand, which in the past would have focused more on the technology than what it means to consumers. Schunker says it “helped us define our brand voice”.

This segued into the brand’s Rio Olympics activity last summer, which again took a more emotional route. It’s an approach that is resonating with consumers as it was Samsung’s activity, over that of fellow sponsors like McDonald’s and Coca-Cola, that dominated conversations around the event.

Because consumers are more emotionally attached to Samsung on a “human level”, claims Schunker, they view the brand more favourably. And it is this foundation that has helped the brand begin to bounce back.

“It built a cushion,” he explains. “So once the Note issue happened we were able to recover faster because there was the transparency there and we took responsibility. Once we began to communicate that we were able to come out of it [at a greater pace].”

The brand has certainly recovered from a sales perspective considering it entered this year with profits at a three year high, but it has been harder to repair brand damage.

While Samsung continues to top YouGov’s BrandIndex for mobile manufacturers, its index score is down a statistically significant 2.1 points to 30.6 over the past year. Its closet rival Apple, meanwhile, has gained 2.7 points but is still considerably lower that Samsung with an overall score of 22.5.

Brand building

Following the debacle Samsung shifted quickly into brand building mode, which Schunker says has been critical.

“We talked about quality assurance. [Everything we’ve done since], so ‘The New Normal‘ and ‘Ostrich’, has been part of a massive brand building effort that we continued from the Olympics.”

Schunker believes this latest campaign also symbolises the struggle and determination the brand has experienced.

https://www.youtube.com/watch?v=hjKd24UCPYY

“’Ostrich’ is a metaphor for us in terms of our own journey through this whole issue,” he explains. “The dream, the failure and the dream then taking off. Samsung never stopped being bold and never said don’t do that. [The senior team] asked questions to make sure we were reading the market dynamics right. We wanted to truly understand consumer sentiment and gauge where we were relative to that and pivot off into a much bigger conversation about the brand.”

Avoiding being disrupted

In such a competitive marketplace, innovation is critical, particularly as newer players such as Huawei and ZTE gain pace and tap away at market share.

Schunker says: “As a premium brand, you’ve got to compete with the premium brands but you’ve also got to have product innovation that outguns the players that move as fast as you do.

“It has to go beyond marketing. When you have a brand ethos that you understand and that comes into product innovation and development, you have something to market that is bigger than a brand campaign. It’s that combination in the long run that will be our winning formula.”