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The tylenol

Ankita Pandey
Ankita Pandey

The document discusses the 1982 Tylenol crisis where Tylenol capsules were laced with cyanide, killing 7 people in Chicago. In response, Johnson & Johnson recalled 31 million bottles of Tylenol at a cost of over $100 million. They communicated openly with the public and medical professionals. Tylenol was reintroduced 6 weeks later with tamper-resistant packaging. Through public apologies, coupon offers, and a marketing campaign, Tylenol regained market share within a year due to Johnson & Johnson's quick and responsible response to the crisis.

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THE TYLENOL:An analgesic that became a headache once The 1982 Crisis Here's the credo. If we're not going to live by it, let's tear it off the wall. These words from James E Burke, former CEO of Johnson and Johnson have marked their place in history just like Mr. Bruke , who landed up as one of the top 10 CEO of all the time (Source: FORTUNE MAGAZINE / article by Jim Collins) The September of 1982 was a blot on Johnson and Johnson, when quit famous medicine that ruled a huge market as an analgesic ended up killing seven people due to being laced with potassium cyanide on Chicago's West Side. This news spread like fire nationwide and waves of panic shook up the company as well as the people. The incident:- On the morning of September 29, 1982, twelve-year-old Mary Kellerman of Elk Grove Village, Illinois, died after taking a capsule of Extra-Strength Tylenol. Adam Janus of Arlington Heights, Illinois, died in the hospital later that day. Shortly thereafter Adam's brother Stanley and sister-in-law Theresa, of Lisle, Illinois, died after gathering to mourn his death, having taken pills from the same bottle. In the coming days Mary McFarland of Elmhurst, Illinois, Paula Prince of Chicago, and Mary Reiner of Winfield also died in similar incidents. Investigators soon discovered the Tylenol link. Urgent warnings were broadcast, and police drove through Chicago neighbourhoods issuing warnings over loudspeakers. As the tampered-with bottles came from different factories, and the seven deaths had all occurred in the Chicago area, the possibility of sabotage during production was ruled out. Instead, the culprit was believed to have acquired bottles of Tylenol from various supermarkets and drug stores over a period of several weeks, added the cyanide to the capsules, and then returned to the stores to place the bottles back on the shelves. In addition to the five bottles that led to the victims' deaths, three other tampered-with bottles were discovered. The case till date remains unsolved, so does the $100,000 reward offered by Johnson & Johnson remains unclaimed. (Source: Wikipedia) CatastrophicEffects on J & J:- In 1982, before these mysterious homicides, Tylenol, sold by J&Js McNeil Consumer Products division had 35% of the $1.2 billion analgesic market. After the deaths, J&Js market share dropped to 7%.
The image of the company was at stake, the condition of obloquy was on the way. How did J & J deal with the crisis:- As soon as J&J became aware of the catastrophe, the then CEO, James E. Bruke made one of the most toughest decision in the history of company. With the help of media, he first broadcasted not to use Extra- Strength Tylenol capsules. They immediately pulled out all the advertisements and sent warning to all healthcare professional without hesitation. And then the major hit on the business was the recall of the Tylenol capsule. The recall included approximately 31 million bottles of Tylenol, with a retail value of more than 100 million dollars. The loss to the company was huge and the leading advertising firm, Della Femina was sure that the product has lived its life and will never revive. Though it was not clear how the medicines became laced with cyanide, but the company took the full responsibility of incident and by taking the decision of recall, protected the brand name. In days media made J&J the hero of market. An article by Jerry Knight, published in The Washington Post on October 11, 1982, said, "Johnson & Johnson has effectively demonstrated how a major business ought to handle a disaster." The article stated that, "This is no Three Mile Island accident in which the company's response did more damage than the original incident." The Washington Post cited many incidents where public relations programs at large companies failed in crisis situations. They applauded Johnson & Johnson for being honest with the public. Tylenol capsules were reintroduced within 6 weeks of its recall in November baring a new triple-seal tamper- resistant packaging. The new packaging was appearing on market shelves by December, making McNeil Consumer Products the first company in the pharmaceutical industry to react to the Food and Drug Administration's new regulations and the national mandate for tamper-resistant packaging. (Johnson & Johnson) To advocate the use of Tylenol to customers who may have strayed from the brand as a result of the tampering, McNeil Consumer Products provided $2.50-off coupons that were good towards the purchase of any Tylenol product. The coupons could be obtained by consumers calling a special toll-free number. This offer was also made in November and December through popular newspapers where the $2.50 coupon was printed. (Johnson and Johnson) Sales people at McNeil planned to recover former stock and shelf facing levels for Tylenol by putting a new pricing program into effect. This new program gave consumers discounts as high as 25 percent. Also, a totally new advertising campaign was put in the works. The new advertising program was launched in 1983. (Johnson & Johnson) Finally, 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. The Tylenol comeback was a great success. Many executives attribute the success of the comeback to the quick actions of the corporation at the onset of the Tylenol crisis. They think that if Johnson & Johnson had not been so direct in protecting the public interest, Tylenol capsules would not have re-emerged so easily. (Johnson & Johnson) The media yet played another role is safeguarding the image of the company and within a year the company became a family company because of their generous move of saving people than thinking of the loss through stock. The credo was written in the mid-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. In this respect, Foster explained, Johnson outlined his company's responsibilities to: "consumers and medical professionals using its products, employees, the communities where its people work and live, and its stockholders." Johnson believed that if his company stayed true to these responsibilities, his business would flourish in the long run. The New York Times, published an article by, Tamar Lewin, on December 24, 1982, that announced to consumers that Tylenol had, in a short period of time, gained back much of the market that it lost prior to the cyanide deaths. The article stated that at that time Tylenol had 24 percent of the market for pain relievers, not much less than the 37 percent of the market that the product held before the crisis. This article continued the media trend of publicizing Tylenol's comeback in a positive light. References The 10 Greatest CEOs of All Time: Fortune dated on July 21, 2003 Wikipedia: Chicago Tylenol murders http://www.jnj.com/ http://content.time.com/time/nation/article/0,8599,1878063,00.html http://iml.jou.ufl.edu/projects/fall02/susi/tylenol.htm Questions: 1) What other marketing strategies could have been followed for the comeback of Tylenol? 2) What was the major Brownie point that helped Tylenol to gain the market value this fast. Explain.

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The tylenol

  • 2. THE TYLENOL:An analgesic that became a headache once The 1982 Crisis Here's the credo. If we're not going to live by it, let's tear it off the wall. These words from James E Burke, former CEO of Johnson and Johnson have marked their place in history just like Mr. Bruke , who landed up as one of the top 10 CEO of all the time (Source: FORTUNE MAGAZINE / article by Jim Collins) The September of 1982 was a blot on Johnson and Johnson, when quit famous medicine that ruled a huge market as an analgesic ended up killing seven people due to being laced with potassium cyanide on Chicago's West Side. This news spread like fire nationwide and waves of panic shook up the company as well as the people. The incident:- On the morning of September 29, 1982, twelve-year-old Mary Kellerman of Elk Grove Village, Illinois, died after taking a capsule of Extra-Strength Tylenol. Adam Janus of Arlington Heights, Illinois, died in the hospital later that day. Shortly thereafter Adam's brother Stanley and sister-in-law Theresa, of Lisle, Illinois, died after gathering to mourn his death, having taken pills from the same bottle. In the coming days Mary McFarland of Elmhurst, Illinois, Paula Prince of Chicago, and Mary Reiner of Winfield also died in similar incidents. Investigators soon discovered the Tylenol link. Urgent warnings were broadcast, and police drove through Chicago neighbourhoods issuing warnings over loudspeakers. As the tampered-with bottles came from different factories, and the seven deaths had all occurred in the Chicago area, the possibility of sabotage during production was ruled out. Instead, the culprit was believed to have acquired bottles of Tylenol from various supermarkets and drug stores over a period of several weeks, added the cyanide to the capsules, and then returned to the stores to place the bottles back on the shelves. In addition to the five bottles that led to the victims' deaths, three other tampered-with bottles were discovered. The case till date remains unsolved, so does the $100,000 reward offered by Johnson & Johnson remains unclaimed. (Source: Wikipedia) CatastrophicEffects on J & J:- In 1982, before these mysterious homicides, Tylenol, sold by J&Js McNeil Consumer Products division had 35% of the $1.2 billion analgesic market. After the deaths, J&Js market share dropped to 7%.
  • 3. The image of the company was at stake, the condition of obloquy was on the way. How did J & J deal with the crisis:- As soon as J&J became aware of the catastrophe, the then CEO, James E. Bruke made one of the most toughest decision in the history of company. With the help of media, he first broadcasted not to use Extra- Strength Tylenol capsules. They immediately pulled out all the advertisements and sent warning to all healthcare professional without hesitation. And then the major hit on the business was the recall of the Tylenol capsule. The recall included approximately 31 million bottles of Tylenol, with a retail value of more than 100 million dollars. The loss to the company was huge and the leading advertising firm, Della Femina was sure that the product has lived its life and will never revive. Though it was not clear how the medicines became laced with cyanide, but the company took the full responsibility of incident and by taking the decision of recall, protected the brand name. In days media made J&J the hero of market. An article by Jerry Knight, published in The Washington Post on October 11, 1982, said, "Johnson & Johnson has effectively demonstrated how a major business ought to handle a disaster." The article stated that, "This is no Three Mile Island accident in which the company's response did more damage than the original incident." The Washington Post cited many incidents where public relations programs at large companies failed in crisis situations. They applauded Johnson & Johnson for being honest with the public. Tylenol capsules were reintroduced within 6 weeks of its recall in November baring a new triple-seal tamper- resistant packaging. The new packaging was appearing on market shelves by December, making McNeil Consumer Products the first company in the pharmaceutical industry to react to the Food and Drug Administration's new regulations and the national mandate for tamper-resistant packaging. (Johnson & Johnson) To advocate the use of Tylenol to customers who may have strayed from the brand as a result of the tampering, McNeil Consumer Products provided $2.50-off coupons that were good towards the purchase of any Tylenol product. The coupons could be obtained by consumers calling a special toll-free number. This offer was also made in November and December through popular newspapers where the $2.50 coupon was printed. (Johnson and Johnson) Sales people at McNeil planned to recover former stock and shelf facing levels for Tylenol by putting a new pricing program into effect. This new program gave consumers discounts as high as 25 percent. Also, a totally new advertising campaign was put in the works. The new advertising program was launched in 1983. (Johnson & Johnson) Finally, over 2250 sales people from Johnson & Johnson domestic affiliates were asked by Johnson & Johnson to make presentations to people in the medical
  • 4. community. These presentations were made by the millions to promote support for the reintroduction Tylenol. The Tylenol comeback was a great success. Many executives attribute the success of the comeback to the quick actions of the corporation at the onset of the Tylenol crisis. They think that if Johnson & Johnson had not been so direct in protecting the public interest, Tylenol capsules would not have re-emerged so easily. (Johnson & Johnson) The media yet played another role is safeguarding the image of the company and within a year the company became a family company because of their generous move of saving people than thinking of the loss through stock. The credo was written in the mid-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. In this respect, Foster explained, Johnson outlined his company's responsibilities to: "consumers and medical professionals using its products, employees, the communities where its people work and live, and its stockholders." Johnson believed that if his company stayed true to these responsibilities, his business would flourish in the long run. The New York Times, published an article by, Tamar Lewin, on December 24, 1982, that announced to consumers that Tylenol had, in a short period of time, gained back much of the market that it lost prior to the cyanide deaths. The article stated that at that time Tylenol had 24 percent of the market for pain relievers, not much less than the 37 percent of the market that the product held before the crisis. This article continued the media trend of publicizing Tylenol's comeback in a positive light. References The 10 Greatest CEOs of All Time: Fortune dated on July 21, 2003 Wikipedia: Chicago Tylenol murders http://www.jnj.com/ http://content.time.com/time/nation/article/0,8599,1878063,00.html http://iml.jou.ufl.edu/projects/fall02/susi/tylenol.htm Questions: 1) What other marketing strategies could have been followed for the comeback of Tylenol? 2) What was the major Brownie point that helped Tylenol to gain the market value this fast. Explain.