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Tylenol Scandal 1982
How did the hospital or facility respond?
Johnson & Johnson made a decision that would set a new standard for crisis involving product tampering (Hogue (2001), p. 1). Once the connection was made between the Tylenol capsules and the reported deaths, public announcements were made warning people about the consumption of the product. Johnson & Johnson was faced with the dilemma of the best way to deal with the problem without destroying the reputation of the company and its most profitable product (The Tylenol Crisis, 1982 (2008), p. 1). 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?" (Crisis Communication Strategies, p. 2). The company's first reaction was to immediately alert consumers across the nation, via the media, not to consume any type of Tylenol product. They used the media, both PR and advertising to communicate their strategy during the crisis. 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 going national. They issued a national to tell the public not to resume using the product until the extent of the tampering could be determined (see Crisis Communication strategies, p. 2). In the first week of the crisis the company established a 1-800 hot line for consumers to call. They used the 1-800 number to respond to inquiries from customers concerning safety of Tylenol. They also established a toll-free line for news organizations to call and receive pre-taped daily messages with updated statements about the crisis (Crisis Communication Strategies,
p. 3). Although Johnson & Johnson knew that they were not responsible for the tampering of the product, they assumed public responsibility by ensuring public safety first. Johnson & Johnson, along with stopping the production and advertising of Tylenol, by its subsidiary McNeil Consumer Products, conducted an immediate product recall of all Tylenol products from the entire country which amounted to about 31 million bottles and a loss of more than $100 million dollars (The Tylenol Crisis, 1982 (2008), p. 1). Additionally, they halted all advertisement of the product.
Once the product was removed from the market, Johnson & Johnson had to come up with a strategy to re-introduce its product and restore confidence back to the consumer. The following steps were taken by the company: Tylenol products were re-introduced containing a triple-seal tamper resistant packaging. Johnson & Johnson became the first company to comply with the Food and Drug Administration (FDA) mandate of tamper-resistant packaging just six months after the crisis occurred. Furthermore, they promoted caplets, which are more resistant to tampering. In order to motivate consumers to buy the product, they offered incentives, such as free replacement of caplets and a $2.50 off coupon on the purchase of their product. (see Hogue (2001), p. 1). The company was also available in the newspapers as well as by calling a toll-free number (see The Tylenol Crisis, 1982 (2008), p. 2). To recover loss of stock from the crisis, Johnson & Johnson made a new pricing program that gave consumers up to 25% of the purchase of the product. Over 2250 sales people made presentations for the medical community to restore confidence on the product (see The Tylenol Crisis, 1982 (2008), p. 2).
2. Why was it necessary for the facility to respond? Where they trying to gain the public trust, put the public at ease, or disseminate information?
In general, a response of Johnson & Johnson as the manufacturer of pain-reliever Tylenol was necessary because the company faced a tremendous crisis when in October 1982 seven people in Chicago were reported dead after taking extra-strength Tylenol capsules. It was reported that (an) unknown suspect(s) put 65 milligrams of deadly cyanide into Tylenol capsules, 10,000 more than what is necessary to kill a human being (The Tylenol Crisis, 1982 (2008), p. 1). 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 (Crisis Communication Strategies, p. 1).
From the corporate responsibility and business ethics point-of-view, the company had to respond because of the underlying credo of the company which defines the focus of the company as its customers. It reads in part as follows: "We believe our first responsibility is to doctors, nurses and patients, to mothers, and fathers and all others who use our products and services." (see Hogue (2001), p. 1. From the economic point-of-view, the company had to respond in order to regain lost ground on the national pain-reliever market. Johnson & Johnson tried to regain public trust. While they could have tried to ride out the storm or simply reacted to the regional [Chicago] problem, their CEO Burke prompted them to go on the offensive, launching both a recall of 31 million bottles of Tylenol capsules and a massive PR campaign to inform the public (see Yang (20070,
3. How did they promote the view of the facility?
Johnson & Johnson promoted the view of the company by essentially following the guidelines of its chairman, James Burke, which again reflect the company's credo written 1943 by Robert Wood Johnson, a philanthropist and grandson of one of the co-founders of the company. Wood therein stated that the company's responsibilities were to the consumers and medical professionals using its products, employees, the communities where its people work and live, and its stockholders. Therefore, it was essential to maintain the safety of its publics to maintain the company alive (The Tylenol Crisis 1982 (2008), p. 2). With this credo as its inspiration, Johnson & Johnson used the media to promptly begin alerting people of the potential dangers of the product and dispatched scientists to determine the source of the tampering (Hogue (2001), p. 1). The company aired commercials within days to regain public trust, and a month after the recall, the company embarked on an aggressive campaign to rebuild the Tylenol brand. Johnson & Johnson's responsibility to its publics first proved to be its most efficient public relations tool. It was the key to the brand's survival (The Tylenol Crisis 1982 (2008), p. 2).
4. What was the outcome of the response?
The company was lauded for its quick decisions and sincere concern for its consumers (Hogue (2001), p. 1). By withdrawing all Tylenol from the market, 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 costs the company millions of dollars (Crisis Communication Strategies, p. 2). This type of drastic response had never been attempted before, which prompted a lot of criticism. However, Johnson 7 Johnson stood firm behind its CEO's decision -- and for good reason. The company was able to "use the crisis to demonstrate to [its] customers [its] commitment to customer safety and to the quality of the Tylenol product." In addition, the company's willingness to be open with the public and communicate with the media helped the company to maintain a high level of credibility and consumer trust throughout the incident" (see Hogue (2001), p. 1). James Burke, the company's chairman, was widely admired for his leadership in the decision to pull Tylenol capsules from the market, and for his forthrightness in dealing with the media (Rehak (2002), p. 1). CEO Burke got even more positive media coverage by going on "60 Minutes" and the "Donahue Show" and giving the public his command messages (Crisis Communication Strategies, p. 3).…[continue]
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