Johnson & Johnson's 1982 Tylenol Crisis Response

Introduction: The 1982 Tylenol Crisis

In October 1982, seven people in the Chicago area were reported dead after taking extra-strength Tylenol capsules. Investigators determined that an unknown suspect or suspects had placed 65 milligrams of deadly cyanide into Tylenol capsules — more than 10,000 times the amount necessary to kill a human being (The Tylenol Crisis, 1982, 2008, p. 1). Johnson & Johnson, the parent company of McNeil Consumer Products, which manufactures Tylenol, suddenly and without warning had to explain to the world why its trusted product was killing people (Crisis Communication Strategies, p. 1). The company's response to this crisis would set a new standard for crisis communication and crisis management that endures to this day.

How Johnson & Johnson Responded

Johnson & Johnson made a decision that would set a new standard for crisis situations involving product tampering (Hogue, 2001, p. 1). Once the connection was established between the Tylenol capsules and the reported deaths, public announcements were made warning consumers not to use the product. Johnson & Johnson was faced with the dilemma of how best to address 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 responded to the crisis by forming a seven-member strategy team. Burke's guidance to the team established two priorities: first, "How do we protect the people?" and second, "How do we save this product?" (Crisis Communication Strategies, p. 2). The company's first action was to immediately alert consumers across the nation, via the media, not to consume any type of Tylenol product. They used both public relations channels and advertising to communicate their strategy during the crisis. Several major press conferences were held at corporate headquarters, and within hours an internal video staff established a live television feed via satellite to the New York metro area, enabling all press conferences to reach a national audience. The company also issued a nationwide alert telling the public not to resume using the product until the full extent of the tampering could be determined (Crisis Communication Strategies, p. 2).

In the first week of the crisis, the company established a 1-800 hotline for consumers to call with safety inquiries about Tylenol. They also set up a toll-free line for news organizations, which provided pre-recorded daily messages with updated statements about the crisis (Crisis Communication Strategies, p. 3). Although Johnson & Johnson knew they were not responsible for the tampering, they assumed public responsibility by prioritizing public safety. The company, along with its subsidiary McNeil Consumer Products, halted production and advertising of Tylenol and conducted an immediate nationwide product recall of approximately 31 million bottles — a loss of more than $100 million (The Tylenol Crisis, 1982, 2008, p. 1).

Once the product was removed from the market, Johnson & Johnson developed a strategy to re-introduce Tylenol and restore consumer confidence. Tylenol products were re-launched in triple-seal tamper-resistant packaging. Johnson & Johnson became the first company to comply with the Food and Drug Administration (FDA) mandate for tamper-resistant packaging, doing so just six months after the crisis occurred. The company also promoted caplets, which are more resistant to tampering. To encourage consumers to repurchase the product, the company offered incentives including free replacement of caplets and a $2.50 coupon toward purchase (Hogue, 2001, p. 1). A new pricing program offered consumers up to 25% off purchases, and over 2,250 sales representatives made presentations to the medical community to restore professional confidence in the product (The Tylenol Crisis, 1982, 2008, p. 2).

Why a Response Was Necessary

Johnson & Johnson's response was necessary on multiple levels. Seven people had died, and the company faced an urgent obligation to protect the public from further harm. From a corporate responsibility and business ethics standpoint, the company was guided by its underlying credo, which defines the company's primary focus as its customers. The credo reads in part: "We believe our first responsibility is to doctors, nurses and patients, to mothers, and fathers and all others who use our products and services" (Hogue, 2001, p. 1).

From an economic standpoint, the company also had to respond in order to regain its position in the national pain-reliever market. While Johnson & Johnson could have attempted to wait out the crisis or react only to the regional Chicago problem, chairman Burke pushed the company to go on the offensive, launching both a recall of 31 million bottles and a massive public relations campaign to inform the public (Yang, 2007, p. 1). Both ethical duty and business survival demanded a swift and comprehensive response.

References

Crisis Communication Strategies. (n.d.). pp. 1–7. Retrieved from www.ou.edu/deptcomm/dodjcc/.../Johnson%20&%20Johnson.htm

Hogue, J. (2001). Johnson & Johnson's Tylenol scare (pp. 1–2). Retrieved from iml.jou.ufl.edu/projects/spring01/hogue/tylenol.html

Rehak, J. (2002, March 23). Tylenol made a hero of Johnson & Johnson: The recall that started them all. The New York Times. Retrieved from www.nytimes.com/2002/03/23/your-money/23iht-mjj_ed3_.html

The Tylenol Crisis, 1982. (2008). pp. 1–3. Retrieved from www.media.fourwinds10.com/siterun.../doc1229116455.html

Yang, J. L. (2007, May 22). Fortune. Retrieved from money.cnn.com/magazines/fortune/fortune_archive/.../index.htm