Today is Halloween and the connection to the witching hour and all things scary. The Korean based company of Samsung recently experienced its scary times in the battery of its Samsung Note 7 phone caught on fire – accidentally. Those of us who own Android phones, Samsung is one of the go to phone types. It would be natural to move up the later when a replacement was desired. Given 80% plus of the sales of phones are the so called smart phones, this is a market where Samsung has to be in. It was good Samsung ordered a recall of all its phones, however for Samsung calling their phones the Galaxy 7 and the Note 7 is an addition headache. Consumers will see the 7 series being recalled and ask for a replacement – they go it and say fix it and the provider will say no the Galaxy is fine, it is only the Note 7. It sounds confusing which means consumers look to alternatives.

In terms of a brand, Professor John Jacobs of Georgetown University says “A company’s brand is their promise to consumers. If you break that promise, you lose customers, you lose their loyalty.” Samsung has said they are stopping making the Note 7, but those in the phone technology world wonder – if Samsung’s cutting features were in the Note 7, what would replace the phone? While Samsung looks for the root cause of the fires, it has issues to consider.

Linking to dividend paying stocks, the relationship line works until it breaks down and what companies do at the time is how the company’s reputation and loyalty will develop. In this case Samsung has recalled their phones, offered credits on their other phones and stopped making the Note 7, that was the right thing to do from a brand perspective. From a corporate perspective it will cost millions of dollars and the stock price has fallen. The next step is replacement of the phone and then the company can rebuilt its loyalty and brand.

There are more questions than answers, till the next time – to raising questions.