Samsung Galaxy Note 7: A Detailed Analysis of a Product Failure

This essay provides a comprehensive analysis of the Samsung Galaxy Note 7 product failure. It begins with an introduction to the product and its target market, followed by a detailed situation analysis that explores the reasons behind the failure, including battery defects, poor design choices, and marketing missteps. The essay then examines the marketing mix elements – product, place, promotion, and price – and assesses the metrics of success and the marketing implications for Samsung. It highlights the importance of rigorous testing, quality assurance, and honest communication with consumers. The essay also discusses the company's subsequent actions, including the launch of the Galaxy Note FE, and concludes with recommendations for future product development and marketing strategies. The analysis draws upon various academic sources to support its arguments and provide a well-rounded understanding of the case.

Running head: NEW PRODUCT AND SERVICE DEVELOPMENT
NEW PRODUCT AND SERVICE DEVELOPMENT
Name of the Student
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Author Note

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Introduction
The primary focus of this topic will be to discuss about the failure of the product of
Samsung smartphones, namely Samsung Galaxy Note 7. The details of the failure story will
be discussed, along with the target market and need for the product. The situation analysis
will be there, where the issues of the failure of the product will be discussed, along with the
competition prevailed in the market, the capabilities of the company and the marketing mix
of that particular product. Metrics of success will be laid as well as the marketing
implications for the organization of Samsung for future purposes.
Target market
The Samsung Galaxy Note 7 was a successor to the product, Galaxy Note 5. But it
was numbered as 7 and not 6 in order to remove the misconception of the consumers that it
may be an inferior product to the flagship Samsung Galaxy S7. It introduced to the market on
2nd August 2016 and was released officially on 19th August 2016. It was the first phone
developed by Samsung which had an USB-C Connector and the last one in the series of
Galaxy Note having a home button on it. This product was an evolution of its predecessor-
products that inhibited the hardware components and improvised techniques. It included re-
establishment of the expandable memory storage capacity along with IP68 water resistance
facility. The Samsung Galaxy Note 7 contained some special features too, such as, a high
dynamic range color support, curved-display on both sides, an improvised bundled stylus or
pen, latest software features and an iris recognition technology. The demand for this product
was quite high as the ore-order record broke in South Korea. This also led to a delayed
release in several international markets because of shortage in supplies. It received critic
reviews that were positive and praised the construction quality, support from HDR and a
huge customer interface though it was priced high and had similar features with the phones of

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the Galaxy series. After the launch of the product, the Note3 and Note4 users were awestruck
by the rich-looking design with curved edges and vibrant display. The software aspects were
also admired which could be upgraded to Android Nougat. The battery back-up was
considered quite efficient and long-lasting. The customers ranging from 26-50 years old were
the chief target for this product as this group of tech-savvy customers have the capability to
buy any latest product that Samsung launches.
Situation analysis
The following reasons were accounted for the failure and permanent discontinuation of
the Samsung Galaxy Note7 phone after 10th October 2016:
 Faults in the battery – Over-heating was a major issue for the batteries of these
products which even led to explode or combust. The weak disconnection between the
positive and negative tabs of the battery resulted in short circuits and thermal
runaways. A few batteries entirely lacked insulation tape. And due to these defects in
the battery, the device was considered as a hazardous product was also forbidden to
carry it on buses and airplanes.
 Poor design – It was seen that the curved edges of the device was causing small but
frequent matters on the screen while the stylus was being used. In addition to this, the
organization was criticized for using glass material on the rear panel instead of using
metal.
 Cheap S-pen – The stylus pen was panned too. It looked cheap like a hollow tube of
plastic that gave a feeling of disposable pens rather than a metal stylus of a smart
phone.

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 Scanner fault – the implementation of the iris scanner was criticized for adding
unnecessary additional steps to unlock the phone as compared to a finger-print reader.
It does not even integrate into the integrated authentic platforms of Android system.
 Other faults and errors – warnings were given for the sensor as it felt scary to look
at it for a longer period of time. The TouchWiz on Note7 did not add much to the
experience of software and thus making the interface less durable with the third-party
software.
Initial reports said that Samsung is delaying the supply and delivery of its products as
additional tests were being conducted to ensure the product quality. Along this came the
customer reports and reviews saying that the batteries had started exploding while charging
the phone. Finally it was reported by Yonhap News Agency of South Korea that the delay in
their shipments is due to their battery issues. the main defect of the phone was that the
batteries have led to produce such excessive heat that fires and explosions have occurred. The
sale of the Galaxy Note7 was finally suspended on 2nd September 2016. Samsung also
replaced some of the devices’ batteries from a separate supplier. But the replacement mobiles
also caught fire. Samsung demanded that the reports accounted for only 0.1 percent of the
total products sold that the hazards were only confined to a small fraction of the
manufactured phones. Even after several exchange and replacement programs the product
could not maintain its brand value in the market and was ordered for suspension and
destroying all the manufactured phones and then to be recycled into new products. The chief
competing phones of the Samsung Galaxy Note7 are Apple iPhone XS, Google Pixel 3a, LG
G8 ThinQ, Apple iPhone XS Max, LG V50 ThinQ, Google Pixel 3, Sony Xperia 1 and some
other including Note9 and Note10 models.
Over powering Apple’s iPhone by the end of 2010, Samsung became the leading
smartphone developer and manufacturer in the world having a 32% of the total market share.

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Samsung is an integrated business group, both vertically and horizontally. It has the
capabilities to work and organize the business as legal independent entities. It adopts strong
policies that are performance based and thus motivates to improve the competitiveness quite
strongly. Internal co-opetition is an important feature of Samsung where performance
evaluations play a vital role. Individuals are acknowledged for achieving their goals and are
awarded with incentives as well as promotions. Moreover, by promoting internal co-opetition
between the employees, dynamic capabilities are developed in the organization.
The Galaxy series, including the Note series, are high-end smartphones, which has an
effective marketing strategy for competing with its rivals effectively in the market. The
marketing mix has been mentioned below:
Product
Samsung focuses on the market of smart phones although having a wide range of
electronic products in the market. Smart phones and tablets, especially the Galaxy Note
series, are in high-demand in the global market. It has gained the title of the best quality
manufacturer of high-end smart phones and tablets.
Place
Place includes the overall management processes until the product is delivered to the
customer and not only distribution or location. The products of Samsung are made available
through channel marketing with the divisions - dealers of sales and service, retailers and
distributors. The dealers have their exclusive showrooms, modern retailers are available and a
sole and single distributor in the city.
Promotions
Samsung keeps updating about their new launches in the local media through
newspapers and electronic media as it is well conscious of the fact that promotion is the

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strongest pillar for achieving success behind marketing mix strategies. Hoardings and posters
are put up in every concerned place. The most popular global celebrities are made
ambassadors for the promotion of a product.
Price
As Samsung has a variety of products, so their pricing methods are also different. The
different smart phones of the Galaxy Note Series are priced accordingly. They generally use
the Skimming Price method to get a high value for the commodity on the onset pf the
competition. In some cases, they also apply Competitive Pricing to beat their rivals in the
market. The price of Samsung Galaxy Note7 was 822.40$.
Metrics of Success
The failure of the Samsung Galaxy Note 7 proved that the product missed safety for
both the product and the customer. The organization implemented more rigorous battery
safety methods, which involved a fresh eight-point battery check. The management learnt a
lesson from the failure of the Samsung Galaxy Note 7 and decided to move forward and took
some serious actions or steps. The eight-point battery check was implemented in all the
assembly plants of the organization located in India, Indonesia, Vietnam, South Korea, China
and Brazil. The eight-point battery check also companies a separate "multi-layer safety
guideline," which involves many physical durability tests.
Recommendations and Marketing Implications
Samsung should have immediately pulled all the damaged devices out of the market
and should have tried to fix the problems in them. Replacement by different batteries or an
exchange program was not a solution to this problem. In case of manufacturing such a high-
end product, proper testing and quality assurance should be done in order to ensure that the

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Galaxy Note7 was totally safe. From the very beginning they should have been more honest
about their failure. It was reported on June 2017 that Samsung has planned to renovate its
invention of the recalled phones and launch them with a fresh name and model called the
Galaxy Note FE, where FE stands for Fan Edition. In South Korea, this phone was released
on the 7th of July. The availability was limited in the rest of the countries with a discounted
price of around 610$. It consisted of a small battery and had multiple safety features.

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