Brand Equity Management Post-Failure: Samsung's Foldable Tablet Case

This case study examines Samsung's brand equity management in the wake of reported malfunctions in their foldable tablets. The report highlights the importance of brand equity, defined as the commercial value derived from consumer perception, and how product failures can negatively impact it. It discusses how Samsung can manage its brand equity through appropriate responses, consistent innovation, and social media management. The study identifies challenges Samsung faces, including competition and convincing customers of product quality, and potential harm to the foldable tablet's demand. Strategies to manage customer boycotts, such as social media campaigns, issue correction, customer compensation, and promotions, are proposed. The report concludes that proactive measures are essential to mitigate damage and maintain brand loyalty. Desklib offers a platform for students to access similar case studies and solved assignments.

BRAND EQUITY MANAGEMENT 1
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Introduction
Brand equity can be defined as the commercial value that is derived from the perception of the
consumer of a brand name of the certain product or service. The phrase is commonly utilized in
marketing industry and it describe the importance of having a famous brand name based on the
assumption that the producers of the well-known product can generate more revenue from its
brand recognition than products that are not well known. For instance, Samsung selling its
gadgets at a higher price than the average market price just because of its brand (Ali and
Muqadas 2015). It determines the profitability of the organization and it can also be damaged by
failure of a new product where the customers lose confidence in the quality of the products. This
report discusses on how to manage brand equity after a product has failed and to build it back so
as it can remain competitive, based on a case study of the Samsung Company, who introduced
foldable tablets which were reported to be malfunctioning due to screen flickering and cracking
(Cheng 2016).
How Samsung may be able to manage its brand equity
To remain profitable, Samsung has to manage its brand equity after the reported failure of their
new product to avoid people boycotting their products, and they can achieve this through several
ways which include reacting appropriately to the current problem. Samsung Company should
replace all the spoilt tablets to the innocent customers then come up with a permanent solution to
avoid such cases in future. They can do so, by changing the design or getting screens of higher
quality that cannot easily break (Patel 2018). They should also give detailed manuals on
describing how to handle the foldable tablets. They should also seek to be consistent in
innovating new products that matches the taste and preferences of their customers. Customers
tend to forget aboutpast failure when they are provided with a perfect product that matches their

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preferences and remain loyal to the Samsung brand. Samsung should as well try managing social
media to avoid too many trends of their failed product. This is because such patterns will have a
very negative effect on the brand (Gallouj 2017)
The main issues encountered by Samsung in managing brand equity
Samsung may face challenges in terms of severe competition in brand equity management after
the failure of the foldable tablet as customers may opt to buy the gadgets from the South Korean
company, who also have almost a similar products to the one produced by Samsung. They may
also encounter difficulties in convincing customers that their products are of good quality after
the incidence of the failed product. The situation is even worse because other another company
(South Korean) has successfully launched a similar product. They also have Apple as another
major competitor who has quality products and with fewer reports on spoilt products. Customers
will always purchase products that have been successful and will tend to avoid products that
have a failure history; they may; therefore, boycott purchasing Samsung products and move to
other companies that they consider to have better quality products.
Potential harm to the foldable tablet
Foldable tablets from the Samsung Company may ultimately lose their demand. This is due to
the negative report given by its first customers that the product is malfunctioning within the first
two days through flickering or cracking of the screen. Some customers who have posted their
complaints on Twitter have made it trend on social media that the product is of poor quality, and
Samsung company was not able to explain the possible cause of this problem. New customers
may fear to purchase from sansung company even after the product has been improved because
they already developed a negative attitude and hence prefer to purchase from other companies or

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purchase the products that have been proven successful (Weitzl and Hutzinger 2019). Even the
royal customer will avoid purchasing this particular product based on the negative trends about
the product. Foldable tablets may never acquire a significant market share throughout its life
cycle (Song, Sheinin and Yoon 2016).
Strategies that Samsung could use to manage customers boycott
Samsung users are most likely to boycott their products, and new users may fear to purchase
their products as well due to the adverse reports made on their new product (foldable tablets).
This may cause a sudden fall in profits to the company, and it should, therefore, come up with
strategies to manage the boycott. They can achieve this by ensuring that social media is not
spreading the negative side of their products and rather use it to advertise their new improved
product. They should seek to correct the issue before it’s too late and make it known to the
customers, and they should also give reasons as to why the screens were cracking. Samsung
should also negotiate with the customers whose tablets spoilt, compensate for the damages, and
promise a better product. By doing so, they will minimize the spreading of the negative report,
and customers will be convinced that the Samsung Company is still determined to produce a
quality product. The company can as well use promotions and offers after the failed product has
been improved to create awareness to new customers and bring back the old customers who had
lost confidence in their products (Nyffenegger, Kahr, Krohmer and Hoyer, 2018).
Conclusion
In conclusion, brand equity is very important to the profitability of any organization, the failure
of a single product could damage it, and therefore, organizations should be cautious before
releasing a new product. The Samsung Company may have its brand equity damage due to

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failure of their new product, which is the foldable tablets. The new tablet has been reported to be
malfunctioning within the first two days after it has been purchased by flickering and cracking of
the screen. Negative trends about this may convince both old and new Samsung users that they
no longer produce quality products and thus boycott purchasing from them. It will be difficult to
convince customers because the competitors of Samsung have proven to be more successful.
Nevertheless, Samsung may manage the boycott by negotiating with its customers through
compensation and promotions, improving the quality of the screen as well as ensuring no more
negative trends about their product.

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References.
Ali, F. and Muqadas, S., 2015. The Impact of brand equity on brand loyalty: The mediating role
of customer satisfaction. Pakistan Journal of Commerce and Social Sciences (PJCSS), 9(3),
pp.890-915.
Cheng, J.X., 2016. Investigation on Customer-Based Brand Equity in Hypermarket: a case study
in Ipoh (Doctoral dissertation, UTAR).
Gallouj, F., 2017. Book review: Elie Ofek, Eitan Muller and Barak Libai (2016), Innovation
equity: assessing and managing the monetary value of new products and services, The University
of Chicago Press. Journal of Innovation Economics & Management, pp.212-218.
Patel, S., 2018. “An Effect of Consumer Promotional Tools on Brand Equity for Pantaloons
Fashion & Retail Ltd. in Jamnagar City.
Song, S., Sheinin, D.A. and Yoon, S., 2016. Effects of product failure severity and locus of
causality on consumers' brand evaluation. Social Behavior and Personality: an international
journal, 44(7), pp.1209-1221.
Weitzl, W.J. and Hutzinger, C., 2019. Rise and fall of complainants’ desires: The role of pre-
failure brand commitment and online service recovery satisfaction. Computers in Human
Behavior, 97, pp.116-129.
Nyffenegger, B., Kähr, A., Krohmer, H. and Hoyer, W.D., 2018. How Should Retailers Deal
with Consumer Sabotage of a Manufacturer Brand?. Journal of the Association for Consumer
Research, 3(3), pp.379-395.

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Albrecht, C.M., Heinrich, D. and Mathew, J., 2017, January. Together we can make it: Exploring
why consumers engage in boycotts. In The Customer is NOT Always Right? Marketing
Orientations in a Dynamic Business World: Proceedings of the 2011 World Marketing Congress
(p. 66). Springer.