Analysis
Denny's
Challenger
Jack in the Box
Tylenol
Union Carbide
Analysis
Case
Study: 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 (Berge, 1998).
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 (Berge, 1998).
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 (Berge,
1990).
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 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. 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 withdraw of every capsule (Broom, 1994).
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 crime (Broom, 1994).
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 inquires 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 (Berge, 1990).
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 (Broom, 1994).
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 (Fink, 1986).
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
(Berge, 1990).
Secondary Evidence. 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 name.
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.
Scholarly Journals. 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).
Discussion. 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).
Rectification involves taking action to prevent a recurrence of the crisis
in the future. Johnson & Johnson's development of Triple sealed packaging
is an example of rectification. They also developed new random inspection
procedures before the shipment of Tylenol to retailers (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 reestablish the Tylenol
brand name as one to the must trusted over-the-counter consumer products
in American. 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.