The Johnson & Johnson Tylenol Crisis Before the crisis,

Tylenol was the most successful over-the-counter product in the United States with over one hundred million users. Tylenol was responsible for 19 percent of Johnson & Johnson's corporate profits during the first 3 quarters of 1982. Tylenol accounted for 13 percent of Johnson & Johnson's year-to-year sales growth and 33 percent of the company's year-to-year profit growth. Tylenol was the absolute leader in the painkiller field accounting for a 37 percent market share, outselling the next four leading painkillers combined, including Anacin, Bayer, Bufferin, and Excedrin. Had Tylenol been a corporate entity unto itself, profits would have placed it in the top half of the Fortune 500

During the fall of 1982, for reasons not known, a malevolent person or persons, presumably unknown, replaced Tylenol Extra-Strength capsules with cyanide-laced capsules, resealed the packages, and deposited them on the shelves of at least a half-dozen or so pharmacies, and food stores in the Chicago area. The poison capsules were purchased, and seven unsuspecting people died a horrible death. Johnson & Johnson, parent company of McNeil Consumer Products Company which makes Tylenol, suddenly, and with no warning, had to explain to the world why its trusted product was suddenly killing people.

Primary Evidence. Robert Andrews, assistant director for public relations at Johnson & Johnson recalls how the company reacted in the first days of the crisis: "We got a call from a Chicago news reporter. He told us that the medical examiner there had just given a press conference-people were dying from poisoned Tylenol. He wanted our comment. As it was the first knowledge we had here in this department, we told him we knew nothing about it. In that first call we learned more from the reporter than he did from us." Andrew's dilemma points out something that has become more prevalent with the expansion of 24 - hour electronic media. The media will often be the first on the scene, thus have information about the crisis before the organization does

Johnson & Johnson chairman, James Burke, reacted to the negative media coverage by forming a seven-member strategy team. The team's strategy guidance from Burke was first, "How do we protect the people?" and second "How do we save this product?" The company's first actions were to immediately alert consumers across the nation, via the media, not to consume any type of Tylenol product. They told consumers not to resume using the product until the extent of the tampering could be determined. Johnson & Johnson, along with stopping the production and advertising of Tylenol, withdraw all Tylenol capsules from the store shelves in Chicago and the surrounding area. After finding 2 more contaminated bottles Tylenol realized the vulnerability of the product and ordered a national withdrawal of every capsule.

By withdrawing all Tylenol, even though there was little chance of discovering more cyanide laced tablets; Johnson & Johnson showed that they were not willing to take a risk with the public's safety, even if it cost the company millions of dollars. The end result was the public viewing Tylenol as the unfortunate victim of a malicious

Johnson & Johnson also used the media, both PR and paid advertising to communicate their strategy during the crisis. Johnson & Johnson used the media to issue a national alert to tell the public not to use the Tylenol product. In the first week of the crisis Johnson & Johnson established a 1-800 hot line for consumers to call. The company used the 1-800 number to respond to enquiries from customers concerning safety of Tylenol. They also establish a toll-free line for news organizations to call and receive pre-taped daily messages with updated statements about the crisis. Before the crisis Johnson & Johnson had not actively sought press coverage, but as a company in crisis they recognized the benefits of open communications in clearly disseminating warnings to the public as well as the company's stand.

Several major press conferences were held at corporate headquarters. Within hours an internal video staff set up a live television feed via satellite to the New York metro area. This allowed all press conferences to go national. Jim Burke got more positive media exposure by going on 60 Minutes and the Donahue show and giving the public his command messages

Johnson & Johnson communicated their new triple safety seal packaging- a glued box, a plastic sear over the neck of the bottle, and a foil seal over the mouth of the bottle, with a press conference at the manufacturer's headquarters. Tylenol became the first product in the industry to use the new tamper resistant packaging just 6 months after the crisis occurred.

The initial media reports focused on the deaths of American citizens from a trusted consumer product. In the beginning the product tampering was not known, thus the media made a very negative association with the brand

All 3 networks lead with the Tylenol story on the first day of the crisis. CBS put a human face on the story which contained the following: "When 12 year-old Mary Kellerman of Elk Grove Village, Ill., awoke at dawn with cold symptoms; her parents gave her one Extra-Strength Tylenol and sent her back to bed. Little did they know, they would wake up at 7:00 a.m. to find their daughter dying on the bathroom floor." (Kaplin, pg. 1, 1998) The print media weighed in with equally damaging headlines: Time Magazine, "Poison Madness in the Midwest," Newsweek, "The Tylenol Scare," The Washington Post, "Tylenol, Killer or Cure."

The media was not only focused on the deaths but it was also pervasive. Throughout the crisis over 100,000 separate news stories ran in U.S. newspapers, and hundreds of hours of national and local television coverage. A post crisis study by Johnson & Johnson said that over 90 percent of the American population had heard of the Chicago deaths due to cyanide-laced Tylenol within the first week of the crisis. Two news clipping services found over 125,000 news clippings on the Tylenol story. One of the services claimed that this story had been given the widest US news coverage since the assassination of President John F. Kennedy (Kaplin, 1998).

Media reporting would continue to focus on Tylenol killing people until more information about what caused the deaths was made available. In most crises media will focus on the sensational aspects of the crisis, and then follow with the cause as they learn more about what happened.

Scholars have come to recognize Johnson & Johnson's handling of the Tylenol crisis as the example for success when confronted with a threat to an organization's existence. Berge lauds the case in the following manner, "The Tylenol crisis is without a doubt the most exemplary case ever known in the history of crisis communications. Any business executive, who has ever stumbled into a public relations ambush, ought to appreciate the way Johnson & Johnson responded to the Tylenol poisonings. They have effectively demonstrated how major business has to handle a disaster." (pg. 19, 1990)

The Tylenol case was the bases for many of the crisis communications strategies developed by researchers over the last 20 years. Berg's suffering strategy and Benoit's Rectification strategies both were developed from doing case studies of how Johnson & Johnson handled the Tylenol poisonings (Coombs, 1995).

The crises category in the Johnson & Johnson Tylenol case is Terrorism. Combs defines terrorism as intentional actions taken by external actors designed to harm the organization directly (hurt employees or customers) or indirectly (reduce sales or disrupt production). Product tampering, hostage taking, sabotage, and workplace violence are examples of terrorism. The violent, outside agent promotes attributions of external locus and uncontrollability.

The Tylenol product tampering clearly fits the Terrorism category. An external agent, presumably, acted to hurt the customers and possibly the employees of Johnson & Johnson. The other categories, Faux Pas, Accidents, or Transgression do not fit in the Tylenol case, so there was no cross-categorization in this case.

Crisis Response Strategies used by Johnson & Johnson: Johnson & Johnson employed Forgiveness and Sympathy strategy for this crisis. Forgiveness strategy seeks to win forgiveness from the various publics and create acceptance for the crisis.

Johnson & Johnson used Remediation and Rectification, both Forgiveness strategies, in the Tylenol crisis. Remediation offers some form of compensation to help victims of the crisis. Johnson & Johnson provided the victim's families counseling and financial assistance even though they were not responsible for the product tampering. Negative feelings by the public against Johnson & Johnson were lessoned as the media showed them take positive actions to help the victim's families (Berg, 1990).

Sympathy strategy was a big component of Johnson & Johnson's crisis communication strategy. Sympathy strategy wins support from the public by portraying the organization as the unfair victim of an attack from an outside entity. Johnson & Johnson's willingness to accept losses by pulling the Tylenol product developed sympathy with the public (Berg & Robb, 1992).

The Johnson & Johnson Tylenol crisis is an example of how an organization should communicate with the various publics during a crisis. The organization's leadership set the example from the beginning by making public safety the organizations number one concern. This is particularity important given the fact that Johnson & Johnson's main mission with Tylenol is to enhance the public's well-being or heath.

Although Johnson & Johnson's leadership performed superbly during the crisis there were some important areas Tylenol improved upon after the crisis. Johnson & Johnson did not have a proactive public affairs program before the crisis. The only media relations engaged in by Johnson & Johnson was in the advertising and marketing area. In the early stages of the crisis Tylenol was informed about what was going on from a Chicago reporter. If this particular reporter had been more contentious or adversarial the whole crisis may have taken on a different form in the public's perception.

Johnson & Johnson's failure to employ/establish a positive relationship with the media, a key stakeholder, forced the company to respond to the crisis in an advertising-like manner. Johnson & Johnson received criticism from the media for not being genuine due to the slick sales-like response ads run during the crisis. The personal messages with the media from the CEO of the organization enabled Johnson & Johnson to overcome this problem.

Today Johnson & Johnson has completely recovered its market share lost during the crisis. The organization was able to re-establish the Tylenol brand name as one to the most trusted over-the-counter consumer products in America. Johnson & Johnson's handing of the Tylenol crisis is clearly the example other companies should follow if the find themselves on the brink of losing everything.

TASK

Having been appointed as Marketing Manager of Johnson & Johnson just after the incident happened, you are required to advise the board on the most appropriate brand crisis management and provide a revised marketing strategy going forward, to restore confidence in the brand and prevent any further negative impact on the brand. You are required to research this incident and the company in detail.

Your report should focus on the following issues:

1. Situation analysis: assess the current situation that Johnson & Johnson is facing

2. The impact the incident had on the brand

3. Johnson & Johnson's positioning strategy before and after the incident and assess how this situation has affected the positioning of the brand in the mind of the consumers.

4. Commentary on the Public Relations steps and approach taken.

5. The importance of ethics and its impact on business and advertising with reference to the current situation.

6. Revised Marketing strategy GOING FORWARD

Question 1

1.1Problem statement

1.2Situation analysis

1.3The impact that the incident had on the brand

1.4 Johnson & Johnson's positioning strategy before and after the incident