Johnson & Johnson: Public Relations Case Study

The objective of this case is to understand the importance of crisis management. This case is intended to make the reader consider not only financial implications at the time of the event but the effects on the long term strategies of the organization. Also, the case urges participants to think about the consequences not only on the customer but on those within the organization as well.

In October of 1982, Tylenol, the leading pain-killer medicine in the United States at the time, faced a tremendous crisis when seven people in Chicago were reported dead after

How many of you have taken a tylenol pill. What if you died days after taking them, what about hours, minutes, seconds. This is what happened in Chicago 1982 after someone got tylenol pills and poisoned them with 100 to 10000 times the fatal dose. Seven people were killed and more poisoned bottles were found after this. One family and other individuals were found dead because of this. In total it ended up being seven dead. No one was ever convicted for the murders, but three people were suspects in the investigation.

The competitors of our product would be Tylenol. The product was developed by McNeil Laboratories. The major ingredient in their medication is acetaminophen. The company was bought by Johnson & Johnson in 1959. They began advertising to many health professionals. They are a company that has many different brands of drugs that serve children up to adults. Their product is said to work by being able to elevate the body’s overall pain threshold so that an individual who takes this medication will feel less pain.

Tylenol, an over the counter prescription product from Johnson & Johnson, was one of the top brands in the analgesic market. Within the company, it was also a large income earner that commanded nearly 15% of the company’s total profits. That being the case, the 1982 crisis was not only a big blow to the brand, but also to the company as a whole. The crisis jeopardized the company’s existence; putting at risk a multi million investment which the investors had a lot of faith in. Irrespective of whether the crisis was due to malicious acts from ill motivated criminals or not, the company had to act swiftly to counter the legal issues which were ensuing and mitigate huge impending losses. It was really a trying moment for the top management of Johnson & Johnson and more so to the CEO, James Burke, who faced the toughest test of his managerial career during this time. Though the crisis was amicably solved, there were some legal issues that were imminent and some valuable lessons learnt from the episode.

The tragic deaths of seven people who died due to potassium cyanide-laced Tylenol capsules started as a disaster for Tylenol producer Johnson and Johnson. However, J&J communicated with their publics and the media proficiently, investigated their

This happened on two occasions, the first in 1982 and the second in 1986. These episodes could have been devastating to the McNeil company by drastic decrease in consumption of the Tylenol products. The McNeil company rallied to the situation to counter this possible decrease in consumption. According to "Laurels: The National Business Hall of Fame", Tylenol's share in the one billion dollar analgesic market commanded thirty-five percent of the market before the 1982 incident. At the time of these episodes, consumer trust was damaged and market share decreased to seven percent. By February 1983, Tylenol had regained a twenty-four percent share of the market(Diary of an Amazing Comeback). In the 1990's, Tylenol again reached its thirty-five percent of the market which at this time accounted for a two billion dollar market(Laurels: The National Business Hall of Fame, Fortune). By regaining their share of the market, this demonstrated that the consumers had faith in the McNeil company's ability to produce safe and trustworthy products, i.e. Tylenol, for their comfort and happiness.

Zaremba (2010) points out that “crisis is any unanticipated event, incident, situation, or development that has the potential to damage or destroy your organization’s reputation”. (P.234) This definition indicates two attributes of crisis: unexpectedness and destructiveness, so effective communication is crucial to manage a crisis. The Nuance Group, a successful management consulting company, with a reputation of experienced and highly educated consultants, was facing the crisis brought by its great “reputation”. As a consultancy, it’s their profession to market themselves. A glossy brochure with specific introduction of consultants’ information, which is the highlight of the company’s reputation, is a fabulous method to market

In the early ‘80s the Johnson & Johnson company was a very successful brand. So successful, that some of their most popular brands were able to corner more than a third of their market. However, all of their accomplishments were threatened when a series of unfortunate murders tarnished one their most popular names: Tylenol.

In a competitive market to which Johnson and Johnson operates, the smallest of errors can lead to consequences which can cut revenue. When large mistakes occur, millions of dollars are lost, and even worse, there is a loss of customer confidence. Johnson and Johnson has had numerous recalls in their consumer healthcare division recently, which rocked the organization’s once sound image, and diminished its profits. These recalls have hurt Johnson and Johnson’s stocks and cost the company about $900 million in sales last year (Rockoff, 2011).

The main issues that Gupta’s focus should be on in regards to short term are the allegations from Center for Science and Environment (CSE) that threatens to tarnish the image of the company’s brand, and the survey result of the its consumers. Crisis is inescapable. When it does occur, for the most part, ones’ wish is for it to go away as fast as possible. While it is an uncomfortable dilemma; nonetheless one ought to have a plan in place to reconcile the issue. In this case study Gupta, president and CEO of Coca Cola India found himself in a crisis that could either conquer his company’s animation or redeem its success as the lead in India. According to Dolewski, the element of surprise should be incorporated into the role of managers due to the variation in the amount of a disaster warning. Bearing in mind Gupta had tactics in place in to dealing with desolations that results from crises, it will at least allow company managers to start from a resilient situation. The gift to identify short-term issues in crisis is an accomplishment but having a solution is an entirely different scenario.

In 1982, Johnson & Johnson (J&J) faced a major crisis that had the potential to send the company into financial ruin. Tylenol, the country’s most successful over-the-counter product, with over one hundred million users, was under attack.

Tylenol was the leading pain-killer medicine in the United States at the time. It was reported that

The company that I selected is Johnson & Johnson and the product I will be writing about is Listerine. Listerine was originally marketed by Lambert Pharmacal Company later known as Warner-Lambert. In December 2006, Johnson & Johnson acquisition of Pfizer’s consumer healthcare division is what led to the manufacturing and distribution of Listerine for this company. The inputs put into making Listerine is Raw Materials, design, and the manufacturing process, with these inputs we will analyze them to see how the effect the production and cost of making and selling Listerine.

Crisis communication is the most important aspect of external and internal organization communication. This type of communication ranges from image restoration campaigns to employee turnover. In the articles that I have analyzed, I discovered many examples of crisis communications and its importance. I will discuss the Bridgestone-Firestone Corporation's image restoration campaign and explain Benoit's theory of image restoration. Also, I will discuss how crisis communications fits into public relations models. Two examples for discussion will be how supervisors should convey bad-news to their employees, and group communication within employee turnover. My last example for this discussion will be Bill Clinton's image repair discourse.