This document summarizes Nokia's battery replacement crisis in India in 2007. It describes how Nokia issued an advisory about replacing defective batteries but the media sensationalized the story by saying the batteries could explode. This caused mass panic among customers who flooded customer service centers demanding replacements. Nokia was unprepared to handle the situation locally and it took time to establish a crisis team and response plan. The document outlines steps Nokia could have taken to better address customer concerns and manage the crisis.

1. A BOMB IN YOUR POCKET
 KRITIKA JINDAL
 MANAS RANJAN TRIPATHY
 RUTVIZ DHANANI
 SAHIL JAIN
 UNNI KRISHNAN S

2. Nokia- An Overview
 Started as Paper Pulp Business in 1865
 Morphed into Global Telecom Leader
 Operates in more than 150 countries
 Net Sales(2007)- $66.7 billion
 Operating Profit(2007)- $13.74 billion
 Among Top 5 Best Global Brand in 2007
 40% of Global Market Share
 Estimated Brand Value- $33.69 billion

3. Nokia India Operations
 Market Entry- 1995
 Market Share(2006)- 76%
 Customer Care Centres- 500+
 Nokia Priority Dealers- 600+
 R&D Centres- 3
 Manufacturing Unit in Chennai

4. Case Basics:
Key People Involved:
 Managing Director, Nokia India: D. Shivakumar
 Director, Communications: Poonam Kaul
Scenario:
 Company to release an advisory regarding replacement against a
batch of defective batteries
 Customers would have to log on to Nokias website to check if their
product was affected
Concerns of Communications Director:
 People wont differentiate between advisory and recall
 Customers would not go online to check their if their poducts are
affected

5. Problems with BL-5C
 BL-5C is a Li-ion battery used in Nokia mobiles
 More than 300 million units produced
 100 units of BL-5C reported for over-heating globally
 Units limited to batch produced by Matsushita between Dec 05
and Nov 06
 46 million batteries in batch
 Batteries over-heating while charging due to short circuit
 Nokia issues advisory for free replacement of faulty units

6. Timeline of BL-5C Controversy
ENFOLDING CRISIS

7. Events of August 14, 2007
Day Starts:
Nokia Advisory issued
as press release to
200 publications and
media outlets
 Regional Managers
notified
 Total process to be
online
 Call Centres to
operate normally
Starts as a normal day
5:00 PM
 Star News flashes There is a bomb
in your pocket
 Report is coupled with gory blast
footage
 Within the hour news van reach
Nokia office at Gurgaon
 TRP fight begins
 Marketing Head assigned as
media spokesperson
 Company gets air time on every
channel
 Channels started to become
neutral only after 10:30 PM
News is neutral at the beginning
4:00 PM
Aaj Tak broadcasts advisory in
straight forward neutral manner
 Customers throng customer
care centres
 Customers ask for replacements
 Customer Care Centres not
authorised to replace batteries
 Customers not willing to go
online to check for solutions
Mayhem Begins
Crisis Management
Damage
already done
 MD returns to India
 Crisis Team set up
 Crisis Response planning
begins
Damage control and
planning for next few days

8. Causes of Controversy
Over Sensitisation by Indian Media for Ratings
Lack of Knowledge among Indians
Mentality of Indians

9. Where Nokia went wrong…..
 Inability to understand Indian Market and sentiments
 Did not consider Socio-Cultural and Literacy factors
 Projection of Global idea on India was wrong
 Disregarding intuition of Communications Director
 They should have started SMS service along with online
advisory
 Did not create a Toll-Free Helpline for customers
 Did not keep Customer Care Centres open for longer
duration and also did not stock extra batteries
 Could not control media
 Contingency plans were missing (Had to control crisis by
forming a crisis team which wasted precious time)

10. Crisis Response by Nokia
 MD returns to India
 Crisis Team formed
 Team conceptualizes ads for next day
 Keep tabs on news reports
 Telephones lines active and ready to take calls
 New way to check status of product through sms service
Questions remain unanswered:
 How to prevent false rumours?
 How to handle irate customers?
 How to control damage and save brand image?
 How to manage logistics?
 What will cost implications be?

11. Solutions to the Crisis
 Create additional team for logistics management
 Use SMS services for replacement procedure:
 Create an SMS service so that customers could send their battery number
 Make SMS service free of cost
 Send SMS in local languages
 If battery was defective ask customers to send their addresses
 Send batteries to Priority Dealers and Customer Care Centers to directly
serve customers
 Start a Toll Free Number for helping customers
 Hire temporary workers to handle extra work load

12. Solutions to the Crisis (contd)
 Tie up with a courier company to deliver products directly to the
customers
 Make a provision so that customer can return the defective product in
the same package (to check if defective product exists and for safe
disposal)
 Create a system to record outgoing and incoming batteries
 System should help avoid duplicate queries and also keep tab on
batteries replaced
 Setup a deadline for replacement operations (about 4 months)

13. Conclusions
 Concerns of customers can be dealt with directly
 Customers will have choices for replacement (through
Customer Care Centres, online or SMS)
 Environment Concerns taken care of as battery returned
to company for safe disposal
 Replacement operations should end in 4 months
 Brand image should remain intact
 Nokia should learn from mistakes and follow some simple
steps in the future:
 It should try to understand its market and its customers
sentiments
 Should prepare for the worst even if the matter is small
 It should create contingencies for failure of its plans