Final Report on Nokia BL-5C battery issue

Submitted by: Group 4 Suraj Dongare Harsh Khambra Roshan Kumar Roshan Mandrawalia Pratibha Singh Varinderpal Kaur

Executive Summary
Nokia Corporation gets the BL-5C series of batteries for some of its mobile handset from Matsushita Battery Industrial Co. Ltd. Out of the 300 million BL-5C batteries supplied by, 46 million batteries manufactured by Matsushita between December 2005 and November 2006 were under scrutiny for the problem of overheating as reported by around 100 customers across the globe. Due to wrong media coverage related to the release of product advisory for battery BL-5C, there has been a panic situation among the Nokia customers about the safety of their phone. The brand of Nokia is under threat of losing its credibility on account of this over embellishment of a small manufacturing defect. In order to inculcate the feeling of safety amongst the customers and to provide proper service to the customers having defective batteries we suggest following measures: Communication with stakeholders Deployment of additional resources to handle the customer queries Focus on localised solution (SMS, Nokia care centers for battery replacements)

Background
The BL-5C was one of 14 battery models used in Nokia products and featured lithium-ion technology. Matsushita Battery Industries Co. Ltd. was one of the battery suppliers to Nokia. The batteries went through rigorous quality testing and were checked using internationally recognized quality standards and Nokias own stringent quality requirements. In summer of 2007, Nokia received few complaints; the batteries were overheating while charging. Over 100 complaints were registered globally. The defects were attributable to particular batch of batteries manufactured by Matsushita from December 2005 to November 2006. Nokia came up with a solution in an advisory that will cater to the growing concern of the customers regarding the safety of their mobile handsets. However the major distress was about customers not being able to differentiate between an advisory and a recall. Adding to the misery were the exaggeration and misinterpretation of the issuing of advisory by certain media channels. News showcasing Nokia phones as a potential bomb that could explode created a panic amongst the customers. As different news channels jumped into the race of generating additional TRPs out of manufacturing defect issue, lots of worried customers started coming to Nokia care centers. A less magnitude manufacturing defect was blown out of proportion that started leading to brand dilution of Nokia.

Impacts on Nokia Corporation

Being the largest market player in the country, the impact of the crisis could be catastrophic for the brand image of Nokia. Nokia has come up as one of the most trusted brands in the country in the last decade and such adverse news could be detrimental to its current market share as well as for its future growth in the country. With the increasing competition in the handset market Nokia cannot afford any such negative publicity where the safety of its customer is at stake. Hence the magnitude of crisis for Nokia is enormous where it can lose the trust of its customers very quickly and never to be regained.

Plausible measures 1. Communication with stakeholders

For Nokia, the customers, suppliers, dealers, media, & employees are its major stakeholders. It should utilise the same medium that was a major player in ruining the image of Nokia i.e. the Television. Following communication strategies needs to be followed:
I. II.

Press release by MD & VP Nokia, India: The MD should give a press release assuring customers about the safety of Nokia products. Ad campaign: An Ad campaign by the brand ambassador giving assurance to the customers about the safety of Nokia products will help Nokia from losing its credibility. An ad campaign featuring the brand ambassador can be made explaining the process of checking the battery and getting it replaced if required.

2. Deployment of additional resources

In order to pace the process of customer management, additional employees should be deployed at the Nokia care centers. The existing network of 500 Customer care centers and 600 Nokia Priority Dealers should be utilised to address the customer issues. A separate cell should be made within the Nokia care to address customers with battery issues.
3.

Localized solutions:

Since NOKIA is having its presence in rural markets where the people are not accustomed to technology it will have to adopt a localized solution to address the issue. India is having diverse geography and languages. So keeping this in consideration following can be done. Publish in media about the plausible solution for the issue in all local languages. Explain that only certain battery has this issue. Customer can check their battery series as given in the press release and if it matches they can call a toll free number or send a SMS to a number. Then a customer care executive will help them in getting the battery replaced.

With these solutions being implemented the issue can be handled with minimal damage to reputation of the brand. Moreover it will help to regain the trust of the customers highlighting the resolve of Nokia to put the safety of its customers at uttermost importance.