Answer to Question #223984 in Marketing for resh

Question

Discuss how the recall of Galaxy Note 7 can affect consumer perception towards the Samsung brand.

Answer 1

The investigation into Samsung's Galaxy Note 7 debacle discovered that the phones' overheating and burning were caused by battery issues. ... Internal and outside examinations "concluded that batteries were determined to be the cause of the Note 7 accidents," according to a statement issued by the South Korean technological behemoth.

SEOUL— Samsung Electronics Co. reported a 16.8 percent drop in net profit to 4.54 trillion Korean won ($4.0 billion) in the third quarter, owing to a disastrous recall of its premium Galaxy Note 7 smartphone, which caused the company's mobile division to report its smallest quarterly profit since it launched its first Galaxy series phone more than six years ago.

Samsung's mobile operating profit fell 96 percent year on year to 100 billion won following the discontinuation of the Galaxy Note 7, which went on sale on August 19. Dozens of reports of overheating compelled the firm to recall the phone on September 2 and later, on October 11, to discontinue it entirely.

Overall operating profit decreased 30% to 5.2 trillion won for the three months ended September 30 from almost 7.4 trillion won a year earlier, while sales declined 7.5 percent to 47.82 trillion won.

The firm stated earlier this month that the Galaxy Note 7 disaster will cost it an extra 3.5 trillion won in the final three months of 2016 and the first three months of 2017.