In 2006, Cadbury India had a crisis on its hands when some buyers reported finding worms in its popular Dairy Milk chocolate bars. The company acted swiftly, recalling stocks, pinpointing the source of the problem to packaging, introducing improved and more expensive packaging without increasing the price, and releasing reassuring TV ads featuring Amitabh Bachchan. Dairy Milk sales bounced back soon.
This was an instance of successful damage control after an unexpected product failure accompanied by a blaze of negative publicity. There have been many other famous product recalls, such as those of Nokia's BL-5C batteries and Toyota cars.
The most recent product crisis, of course, concerns Samsung Galaxy Note7. After its launch in August the Korean smartphone maker's latest flagship phone has been reported to have spontaneously burst into flames by many users.
After a noticeable number of incidents, Samsung asked all Galaxy Note7 buyers to return their phones and get a replacement unit or another phone. While Samsung did act quickly, it was not decisive enough in recalling a product that could potentially have proved fatal to a user. The units started coming in but there were -- and still are -- many units of old Samsung Galaxy Note7 out there.
More incidents of the phone spontaneously combusting were reported after Samsung's announcement. Airlines the world over banned the Note7 from their flights, while some allowed carrying switched off Note7 units in hand baggage.
Having traced the source of the problem to the Note7 battery, Samsung released a patch that reduced the peak level to which the battery could be charged by 40 percent. That however meant that customers had to recharge their phones more frequently.
What Samsung could have done instead was to work with the carriers and get all Note7 phones deactivated.
A week after the official recall, Samsung said that it began selling the new Note7 phone along with the replacement units. The new Note7 units have a green battery indicator icon and a black square on the packaging box. Relieved consumers, who view Samsung as a trusted brand, took the company at its word.
But then fresh incidents of Note7 units on fire began being reported that involved replacement units. In the third and most recent incident, as reported by WKYT, Micheal Kearing, a resident of Kentucky in the United States, suffered from smoke inhalation reportedly caused by a burning replacement Note7.
Samsung didn't seem to take fresh reports of problems with Note7 devices seriously, offering vague statements such as, "We are taking customer safety very seriously."
Kearing received an unexpected text from a Samsung executive that was obviously meant for a colleague.
I can try and slow him down if we think it will matter, or we just let him do what he keeps threatening to do and see if he does it.
Two earlier incidents were reported in the US involving replacement Note7s, the first one on a flight and the second involving a child in Minnesota. There was a report of another replacement unit catching fire in Taiwan as well.
Today, Samsung issued an official statement, as follows:
Samsung understands the concern our carriers and consumers must be feeling after recent reports have raised questions about our newly released replacement Note7 devices.
We continue to move quickly to investigate the reported case to determine the cause and will share findings as soon as possible. We remain in close contact with the CPSC throughout this process.
If we conclude a safety issue exists, we will work with the CPSC to take immediate steps to address the situation. We want to reassure our customers that we take every report seriously and we appreciate their patience as we work diligently through this process.
At this point, it would have been best for Samsung to put a hard stop on people using the Note7. There are a number of ways for the company to deactivate each and every Note7 out there. But Samsung is putting user safety at risk by not doing so. Investigations can continue but the top priority should be customer safety.
A Bloomberg report suggests that the company blames a "small" battery fault that forced the recall. But the fact is that Samsung was lethargic in its response before the recall and, again, after the replacement units went on sale.
And it is important to bear in mind that this case cannot be equated to, say, iPhone 4's antenna-gate where people couldn't make calls. Here is a product defect that could potentially endanger lives. Samsung has made some great phones this year and will make more in the future. But this is the time for Samsung to put a hard stop to Note7.
The company can market and sell more Galaxy S7 phones or offer other deals to customers. But if they continue to sell Note7 phones, they are putting their brand name on the line.