Hi captiand,
Thank you for an interesting question (I remember the Tylenol scare)
and thank you for requesting I post my findings as the answer. I've
added a bit more information in addition to what I posted originally.
Rebuilding after the crisis: A legal Practitioner's Guide to Relations
with the Media
http://www.findlaw.com.au/articles/default.asp?task=read&id=3306&site=GN
"But there are many examples of companies who have redeemed public
confidence in their position - and more - through skilful recovery
operations. The textbook example of good crisis management and
recovery was Johnson & Johnson's handling of the Tylenol contamination
in the United States.
Seven people died in 1982 after taking headache tablets laced with
cyanide. The company acted quickly to remove product from the shelves
and came back into the marketplace with a tamper-proof pack. There was
evidence that consumers even switched over to the brand because of the
safety precautions. In 2000, Johnson & Johnson was ranked number one
in a major survey of reputations of American corporations. It is worth
noting that the company was less successful in its defence of toxic
shock syndrome associated with tampons, declining to place warnings on
its packaging for several months."
==========
I'll Drink the Privatized Water
http://www.environmentprobe.org/enviroprobe/evpress/july1900_ff.html
"From the Tylenol contamination scare, Johnson & Johnson also learned
that it needed to be more proactive and vigilant about product safety.
It implemented changes which had little to do with regulation, and a
lot to do with its need to reassure the public and regain the public's
confidence. The changes were not coerced by the government; they were
inspired by the need to maintain share price and profits. According to
economist Mark Mitchell, because of the 1982 product tampering,
Johnson & Johnson "suffered a $1.24 billion wealth decline (14 percent
of the fore- casted value of the company) due to the depreciation of
the company brand name and the Tylenol brand name" (Mitchell, p. 616).
Johnson & Johnson's immediate change was to create triple safety seal
packaging. When in 1986 the company was hit with another product
tampering episode, Johnson & Johnson stopped all capsule production
and created the replacement caplet, which was less easily tampered
with (ten Berge, pp. 28-29.) Indeed, Robert Wood Johnson, the company
leader for 50 years, wrote a credo in the mid-1940s that outlined the
corporation's responsibilities (ten Berge, p. 32). The executives in
charge of the Tylenol recall were working with the credo, which kept
at the forefront of their concerns the "consumers and medical
professionals using its products, employees, the communities where its
people work and live, and its stockholders." According to Tamara
Kaplan, "Johnson believed that if his company stayed true to these
responsibilities, his business would flourish in the long run. He felt
his credo was not only moral, but profitable as well" (Kaplan, p. 382)"
=========
Yahoo Finance Groups - trainingworld · Training and Development List
http://finance.groups.yahoo.com/group/trainingworld/message/2
THE TYLENOL CRISES
"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 to find their daughter
dying on the bathroom floor.
Johnson & Johnson won the public's heart, and the public's trust, with its
obvious commitment to protecting the consumer during the Tylenol poisoning
scare. In the fall of 1982, McNeil Consumer Products, a subsidiary of Johnson &
Johnson, was confronted with a crisis..."
[...]
"Johnson & Johnson told of the company's strict quality control and said that
the poisonings could not have been performed in the plants. The tainted Tylenol
capsules were from four different manufacturing lots. Evidence suggests that
the pills were taken from different stores over a period of weeks or months.
The bottles, some of which had five or less cyanide laced capsules and one
which had ten, were tampered with and then placed back on the shelves of five
different stores in the Chicago area.
"I don't think they can ever sell another product under that name. There may be
an advertising person who thinks he can solve this and if they find him, I want
to hire him, because then I want him to turn our water cooler into a wine
cooler." - Advertising genius, Jerry Della Femina as told to the New York Times
right after the crises.
Johnson & Johnson needed to find the best way to deal with the crises, without
destroying the reputation of their company and their most profitable product,
Tylenol. They immediately alerted 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. They
also recalled all Tylenol capsules from the market. The recall included
approximately 22 million bottles of Tylenol, with a retail value of more than
100 million dollars. This was unusual for a large corporation facing a crisis.
They also immediately put up a reward of $100,000 for the killer.
At first, it is easy to believe that such a move could hardly be acting in the
best interest of the company's stockholders. Johnson & Johnson's top management
put customer safety first, before they worried about their company's profit and
other financial concerns. In other words, they did the right thing.
Della Femina was quite wrong in assuming that Tylenol would never sell again.
Not only is Tylenol still one of the top selling over the counter drugs in this
country, but it took very little time for the product to return to the market.
Johnson and Johnson's handling of the Tylenol tampering crisis is considered by
public relations experts to be one of the best. Johnson & Johnson was praised
for their socially responsible actions. Along with the nationwide alert and the
Tylenol recall, Johnson & Johnson established relations with the Chicago
Police, the FBI, and the Food and Drug Administration. This way the company
could have a part in searching for the person who laced the Tylenol capsules
and they could help prevent further tamperings.
"Johnson & Johnson has effectively demonstrated how a major business ought to
handle a disaster. This is no Three Mile Island accident in which the company's
response did more damage than the original incident. What Johnson & Johnson
executives have done is communicate the message that the company is candid,
contrite, and compassionate, committed to solving the murders and protecting
the public." - Jerry Knight, The Washington Post on October 11, 1982. Note
that they could have disclaimed any possible link between Tylenol and the seven
sudden deaths in the Chicago area. The company never attempted to do anything,
other than try to resolve the deaths.
As final step in Johnson & Johnson's public relations plan, the company offered
to exchange all Tylenol capsules that had already been purchased for Tylenol
tablets. It was estimated that millions of bottles of Tylenol capsules were in
consumer's homes at the time. Although this proposition cost Johnson & Johnson
millions more dollars, and there may not have been a single drop of cyanide in
any of the capsules they replaced, the company made this choice on their own
initiative in order to preserve their reputation.
To make a comeback, New Tylenol capsules were introduced in November with a
triple-seal tamper resistant packaging: the package has glued flaps on the
outer box, which must be forcibly opened. Inside a tight plastic seal surrounds
the cap and an inner foil seal wraps over the mouth of the bottle.
To advocate the use of Tylenol to customers who may have strayed from the
brand, Johnson & Johnson provided $2.50 coupons that were good towards the
purchase of any Tylenol product. Also, over 2250 sales people from Johnson &
Johnson domestic affiliates were asked by Johnson & Johnson to make
presentations to people in the medical community. These presentations were made
by the millions to promote support for the reintroduction Tylenol.
How Did Johnson & Johnson Make These Decisions? They simply turned to their
corporate business philosophy, which they call "Our Credo," when determining
how to handle the Tylenol situation. The credo was written in the 1940's by
Robert Wood Johnson, the company's leader for 50 years. Little did Johnson
know, he was writing an outstanding public relations plan. Johnson saw business
as having responsibilities to society that went beyond the usual sales and
profit incentives. He felt that his credo was not only moral, but profitable as
well. The credo stressed, it was important for Johnson & Johnson to be
responsible in working for the public interest. The public and medical
community was alerted of the crisis, the Food and Drug Administration was
notified, and production of Tylenol was stopped. The media did much of the
company's work. Queries from the press about the Tylenol crisis were beyond
2,500."
=========
AGRICULTURE AND FOOD/WATER SUPPLY PROTECTION - The Tylenol Terrorism
Incident of 1982
http://faculty.ncwc.edu/toconnor/431/431lect09.htm
(Scroll to insert and image of Package Extra strength Tylenol and map
of Tylenol poisonings - slightly down from top of page.)
"Seven people died from cyanide-laced Tylenol and numerous "copycat"
incidents followed. An unknown quantity of packages (the FDA said 36)
contained 65 milligrams of cyanide laced on the pills, far more than
needed to kill. The case remains officially unsolved and was only
detected by off-duty firemen who pieced together bits of information
from news reports. Like the 270 Halloween poisonings that year, the
attacks were meant to look like the work of a random madman. Hospitals
were swamped with people from the panic. Some people tried to extort
money from Johnson & Johnson, who did a $100 million recall. The U.S.
lost its innocence that year, as tamper-proof packaging soon became
the norm on drugstore shelf products."
==========
Court TV's Crime Library
http://www.crimelibrary.com/terrorists_spies/terrorists/tylenol_murders/5.html?sect=22
"After the addition of new tamper-proof bottles, extra strength Tylenol
was again released to the public, in new packaging. There was a big
push by Johnson & Johnson to try to reclaim part of the market share
that they lost due to the poisonings."
=========
The Tylenol Crisis: How Effective Public Relations Saved Johnson & Johnson
http://www.grif.com.au/index.php?id=79
==========
http://www.4hb.com/marketing/0134rpwbrandingrestofus.html
Branding for The Rest of Us by Robert P. Woyzbun - T H E / M A R K E T
I N G / W O R K S
(Scroll to middle of page.)
"The benefits and positive impacts of adopting a "branding approach" can include:
Establishing brand equity. Brand equity is a set of assets that add
value to a product, service or organization, beyond the generic
service or product benefits. Brand equity is the goodwill related to a
product or service - the goodwill that cannot be easily quantified or
copied. Brand equity is important for both customers as well as
intermediaries or stakeholders who must interact with, or represent
the "branded" product or organization. Strong brand equity also allows
an organization to better "weather" downturns or instability. For
example, Tylenol's strong brand equity (and Johnson & Johnson's
effective brand management) helped the product survive the Tylenol
poisoning tragedy."
==========
http://www.wadsworth.org/educate/workshops/food.html
Cyanide contamination of Tylenol capsules and other analgesics in the
1980s and early 1990s resulted in more than a dozen deaths in the U.S.
Prior to 1982, tamper-proof capsules and tamper-proof packaging were
essentially unknown.
=========
The Chemical Terrorism of Food by Robert Turesky, Ph.D.
http://redesignresearch.com/dmi-km.htm
"Products can be evaluated as supporting or diminishing the core values
of a firm. For example, when Johnson and Johnson removed Tylenol from
store shelves during the 1982 Tylenol contamination crisis,
management?s actions demonstrated a clear commitment to the core
values of the firm as embodied in their Credo."
=========
The Incredible Payback - Chapter 2 Ten Common Mistakes
http://www.amanet.org/books/catalog/0814472079_ch.htm
"The Tylenol poisoning case in which President James Burke communicated
a strong message that told the world McNeil (a Johnson & Johnson
company) had itself also been hurt, and that the company planned to
refill the pipeline with tamper-proof products, saved the company and
established a benchmark for how to deliver bad news well. Burke's good
press position put Johnson & Johnson in a better recovery position as
well."
==========
RiskProf
Discussions on Liability Law and Economics, plus occasional other subjects.
http://riskprof.typepad.com/tort/catholic_issues/
"Why is it that Johnson and Johnson took the fall for the Tylenol
poisoning cases in Chicago when it was not its fault? It is because
management wanted to restore the customers faith in its products. Why
is it that J&J have a credo that places its customers first? It is
because J&J wants to make sure the customer has faith in it."
=========
CRISIS MANAGEMENT STRATEGY UTILIZED BY THE UNITED STATES 83
DEPARTMENT OF DEFENSE FOLLOWING THE TERRORIST ATTACK ON AMERICA:
http://murphylibrary.uwlax.edu/digital/jur/2002/wolosektritz.pdf
"Fortunately, there is also an example of previous crisis management
success. Johnson & Johnson experienced a dangerous crisis when a
terrorist poisoned Tylenol bottles withcyanide. Yet, the company
enhanced its image through effective management of crisis.
?Johnson & Johnson?s experience with the Tylenol poisonings suggests
that outstanding crisiscommunications can enhance an organization?s
image and credibility? (Kauffman, 1999,
p. 430). ?Organizations that have managed crises well such as AT&T and Johnson &
Johnson, did so, in part, because the senior public relations
practitioner was inside the boardroom
helping to set strategy, not outside the boardroom waiting to be told
what to do?(Marra, 1998, p. 473)."
=========
Johnson & Johnson Credo
http://www.tylenol.com/page.jhtml?id=tylenol/about/subfind.inc
=========
Johnson & Johnson Credo History
http://www.jnj.com/our_company/our_credo_history/
=========
Johnson & Johnson?s Corporate Social Responsibility
http://tigger.uic.edu/~amp/Corp/johnson.html
"General Johnson wrote a Credo that codified the Company's socially
responsible approach to conducting business. The Credo states that the
Company's first responsibility is to the people who use its products
and services; the second responsibility is to its employees; the third
to the community and environment; and the fourth to the stockholders.
General Johnson and his successors in managing the business have
believed that if the Credo's first three responsibilities are met, the
stockholders will be well served."
=========
Best regards,
tlspiegel |
