The History and Background of the Organization
By Pamela Horton
Johnson & Johnson Inc. was founded in 1886 by three brothers, James, Edward, and Robert Johnson. Its main headquarters reside in New Brunswick, New Jersey. They wanted to find ways to make antiseptic surgery easier through scientific research. In 1888 they did just that! A book was published giving directions on how to keep a sterile environment and is the standard we use today.
The main goal and credo of Johnson & Johnson Inc. (even used today) is the customer comes before the product. A safer, cleaner environment for their consumers takes precedence over a defective product. This was long before anyone ever heard the term “corporate social responsibility.” Our Credo is more than just a moral compass. We believe it’s a recipe for business success (Johnson & Johnson 2012).
Starting in the late 1800s into the early 1900s consumer products were introduced such as women’s sanitary napkins, dental floss, maternity kits for easier childbirth, and the first first-aid kits made available. JNJ would sell hard to physicians, nurses, hospitals, employees, the community, and consumers. The company expands to overseas and begins to thrive with 37 percent of market shares. They now own many name brand healthcare products: Band-Aid, children’s no more tears bathing products, Acuvue contact lenses, Listerine, and many more.
In 1951, the safety and efficacy of acetaminophen was described at a scientific symposium in New York City sponsored by the Institute for the Study of Analgesic and Sedative Drugs. According to the research reported at this symposium, acetaminophen was found to be as effective as aspirin for pain relief and fever reduction, but without the side effects of aspirin such as stomach irritation, gastrointestinal bleeding, and impairment of the blood to clot normally ((http://www.nancywest.net/pdfs/McNeilConsumerHealthcareCompany.pdf).
Convinced of the safety and efficacy of the drug, McNeil began its own extensive research on acetaminophen which confirmed the findings reported at the symposium. McNeil's first use of APAP was as a component of the combination product, ALGOSON, an elixir which contained sodium butabarbital and acetaminophen. It was marketed in 1953 as a prescription analgesic (http://www.nancywest.net/pdfs/McNeilConsumerHealthcareCompany.pdf). In 1955 Children’s Tylenol was introduced with a prescription only.
In 1959 Johnson & Johnson receive McNeil Laboratories. McNeil Laboratories was one of the largest drug stores in Philadelphia serving all consumers along with all the physicians in that area. Family owned and operated, Henry and Bob McNeil would finally become the president and chairman of the company after their father’s death, Robert Lincoln McNeil. The constantly expanding company was always looking for more land to purchase in order to build bigger and better laboratories. The company was worth $11.4 million. The cost of research rising made the decision for McNeil Laboratories to sell to Johnson & Johnson.
Business is booming. Both companies have credible names along with research to prove efficiency of their products. In September 29, 1982, Tylenol would put JNJ to the test.
A Detailed Case Description and Media Coverage
In Chicago, 12-year-old child tells her parents she has a cold. They gave her an Extra-Strength Tylenol for comfort and she died hours later. Another person named, Adam Janus, a postal worker in the Chicago area, takes an Extra-Strength Tylenol for a headache and dies the next morning. Eventually five other individuals die using the same product.
Through police investigations the only logical explanation for these deaths was tainted medicine. It was all within the same city of Chicago that this had happened resulting in seven deaths. Someone is believed to have removed bottles from the shelf at the store and laced the pills with cyanide 10,000 times the normal limit to kill a person.
Immediately after the incident JNJ’s market share went from 37 percent to 7 percent. Although no evidence was found of internal poisoning on behalf of JNJ manufactures and employees, the brand name needs to gain its consumers trust once again.
A press conference release was given by the medical examiner confirming that Tylenol was the cause of death in all seven individuals. The media, within minutes, started to report that Tylenol was the cause of deaths in Chicago. In one week 90 percent of the American population knew about the incident. The newspaper gave negative headlines toward the JNJ Company and television would put faces with the stories playing on the emotions of many. This gave JNJ an untrustworthy brand name many used to believe in. Media focused heavily on the death toll rather than the product itself.
JNJ public relations department found out about the medical examiner comments through a Chicago reporter calling for confirmation of the incident. JNJ unaware this happened received most of its information from the reporter. Without delay a special group was formed consisting of seven member strategy team headed by Chairman James Burke. He started gaining back positive media coverage by going on television to explain the situation.
Strategies made by the group started to make consumers view JNJ as the victims. JNJ pulled millions of dollars’ worth of Tylenol bottles was pulled from the shelf, and manufacturing stopped. Advertising was also stopped. A 1-800 crisis line was set up for concern consumers to call with questions. Many press releases were given at JNJ headquarters constantly informing public of information received and what is going to be done to prevent this in the future. JNJ also used sympathetic and forgiveness techniques by providing financial assistance and counseling for their consumers.
A few weeks later JNJ repackaged the capsules with a triple safety seal and began an advertising campaign focusing mainly on the new packaging. The capsules gradually reappeared on the shelves in late December of 1982. Even before the return of the Tylenol capsules, the market share of Tylenol tablets appeared to rebound, despite heavy competition from brands never before advertised. Tylenol rebounded to a 30 percent market share within six months. By August 1983, Tylenol was firmly established once again as the nation's leading pain reliever (Mitchell).
Johnson & Johnson took the following steps to re-introduce the product:
1. Tylenol products were re-introduced containing a triple-seal tamper resistant packaging. It became the first company to comply with the Food and Drug Administration mandate of tamper-resistant packaging. Furthermore, they promoted caplets, which are more resistant to tampering.
2. In order to motivate consumers to buy the product, they offered coupons on the purchase of their product. They were available in the newspapers as well as by calling a toll-free number.
3. To recover loss stock from the crisis, Johnson & Johnson made a new pricing program that gave consumers up to 25% off the purchase of the product.
4. Over 2250 sales people made presentations for the medical community to restore confidence on the product (Zoulas).
A Critique of the Case and Media Coverage
The Tylenol Crisis of 1982 proved to be a successful public relations campaign used many years later. Johnson & Johnson’s credo that states customers are before products became beneficial to their company’s image. Accurate and honest information was given to the publics and restored their trust.
The media report as they hear it. Small amounts of information is reported until more information is received and a broader analyzes can be made. This is not good when a company wants to keep a credible image. The media have a negative effect of crisis. They tend to place blame quickly while not knowing all the details involved. This is why companies have to jump into action as quickly as possible to deter this type of thinking to its publics. Otherwise a business will have a negative image and not be in business anymore.
Johnson & Johnson's handling of the crisis a success included the following:
• They acted quickly, with complete openness about what had happened, and immediately sought to remove any source of danger based on the worst case scenario - not waiting for evidence to see whether the contamination might be more widespread
• Having acted quickly, they then sought to ensure that measures were taken which would prevent as far as possible a recurrence of the problem
• They showed themselves to be prepared to bear the short-term cost in the name of consumer safety. That more than anything else established a basis for trust with their customers (Zoulas).
This is a classic public relations case because it shows how all businesses should react in a crisis.
JNJ became aware of the issue. Once aware of the deaths caused by their product, JNJ began a crisis management plan. They immediately formed a strategic group of well-informed employees to access the crisis and at what degree the crisis was held.
The media turned the blame to JNJ and JNJ turned themselves into a victim of terrorism. This kept publics from having a negative image of their company and products. They implemented a plan an followed through with it. They were direct and did not lie about the facts. They said it and gave explanation for it.
They used the local media (TV and newspapers) to provide comments to their publics. They never tried to cover up anything and were open to criticism to use it to give facts. The more information the media received the less they were placing the blame on their company and started looking at other possible suspects.
The 1-800 crisis hotlines were another detour from a negative company image. This allowed the public to express their concerns and have the company answer them. This gives positive feedback.
Although it was proven they didn’t have anything to do with the deaths of these seven individuals they still sympathized with the families of the deceased and gave them financial backing.
Today technology has progressed so much since 1982. The World Wide Web can give information within seconds. In 1982, it took only hours for millions of people to know via the television or newspapers, but now with WWW information can be transmitted with the blink of an eye. It is evident that any crisis in this day and time should be handled via the internet first along with other forms of media. The idea is to get the facts out before someone else corrupts the public’s thinking, and this can happen so quickly now, I believe extra employees should be hired just for internet surveillance.
Advancements in technology and other areas have made individuals much smarter than it was in 1982. The publics are well informed in many fields of study with information at their fingertips. The best way to deal with educated people is to be direct and honest. People will know if they are being lied to or the whole story is not told. Keep up-to-date information to keep people mindful of what is going on and not sway to their own opinions but stick with the facts.
References
Department of Defense (n.d) Crisis Communication Strategies. University of Oklahoma Department of Communications. Retrieved January 31, 2012, from http://www.ou.edu/deptcomm/dodjcc/groups/02C2/Johnson%20&%20Johnson.htm
Mitchell, Mark L. (Oct. 1989). The impact of external parities on brand-name capital: the 1982 Tylenol poisonings and subsequent cases. Academic One File. Retrieved January 31, 2012, from http://go.galegroup.com.lib-proxy.jsu.edu/ps/retrieve.do?sgHitCountType=None&sort=DA-SORT&inPS=true&prodId=AONE&userGroupName=jack26672&tabID=T002&searchId=R1&resultListType=RESULT_LIST&contentSegment=&searchType=AdvancedSearchForm¤tPosition=4&contentSet=GALE%7CA8026221&&docId=GALE|A8026221&docType=GALE&role=
Oshins, Alice H. (Nov. 1989). Crisis management plan crucial in product tamperings. Academic One File. Retrieved January 31, 2012, from http://go.galegroup.com.lib-proxy.jsu.edu/ps/retrieve.do?sgHitCountType=None&sort=DA-SORT&inPS=true&prodId=AONE&userGroupName=jack26672&tabID=T002&searchId=R14&resultListType=RESULT_LIST&contentSegment=&searchType=AdvancedSearchForm¤tPosition=25&contentSet=GALE%7CA8230555&&docId=GALE|A8230555&docType=GALE&role=
Fletcher, Dan. (Feb. 2009). A Brief History of the Tylenol Poisonings. Time U.S. Retrieved January 31, 2012, from http://www.time.com/time/nation/article/0,8599,1878063,00.html
West, Nancy. (n.d). History of Tylenol. Worldwide Consumer Pharmaceutical Intranet Site
Content. Retrieved January 31, 2012, from http://www.nancywest.net/pdfs/McNeilConsumerHealthcareCompany.pdf
Singer, Natasha. (Jan. 2010). In Recall, a Role Model Stumbles. The New York Times. Retrieved January 31, 2012, from http://www.nytimes.com/2010/01/18/business/18drug.html
Zoulas, Soterios. (n.d). The 1982 Tylenol Crisis. Zoulas Communications. Retrieved January 31, 2012, from http://aboutpublicrelations.net/uczoulas1.htm
Reyna, Susi. (2002). Effective Crisis Management. University of Florida College of Journalism and Communications. Retrieved January 31, 2012, from http://iml.jou.ufl.edu/projects/Fall02/Susi/sources.htm
