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by
Soterios Zoulas
Zoulas
Communications
 Recent
news reports have resurrected memories of a 28-year seminal criminal case
that has never been solved.
In 1982, seven people died
from cyanide-laced Tylenol capsules in the Chicago area. More recently,
the FBI and other police agencies searched the home of ongoing suspects
who were ordered to submit DNA samples, fingerprints and palm prints in
response to a Chicago-area grand jury subpoena.
My interest, however, stems from its importance as a case study in the
field of public relations rather than as a criminal case. It has been a
staple in the teaching of public relations in general and crisis
communications in particular for nearly 30 years. It shows clear lessons
of what a company should do when it finds itself in such a crisis.
News reports at the time said that that an unknown suspect/s put 65
milligrams of deadly cyanide into Tylenol capsules -- 10,000 more than what
is necessary to kill a human. Academic researchers who have studied
the case found that the tampering occurred once the product reached the
shelves. They were removed from the
shelves, infected with cyanide and returned to the shelves.
In 1982, Tylenol, owned by
Johnson & Johnson, controlled 37 percent of its market with revenue of
about $1.2 million. Immediately after the cyanide poisonings, its market
share was reduced to seven percent. The company was faced with the dilemma
of the best way to deal with the problem without destroying its reputation
and its most profitable product.
Once the connection was made
between the Tylenol capsules and the reported deaths, public announcements
by Johnson & Johnson were made warning people about the consumption of
the product. Furthermore, the company took the dangerous step for the
future of the product by the immediate product recall from the entire
country, which amounted to about 31 million bottles and a loss of more
than $100 million dollars. They also halted all advertisements for the
product.
However, the company at the
time and today has won praise for its rapid response and appropriate
action. Having sidestepped the position others have found themselves in --
of having been slow to act in the face of consumer concern and media
pressure -- they achieved the status of consumer champion. The company took
responsibility and placed public safety above profit.
According to reports, within
six months of the catastrophe, the company had recovered 70% of its market
share for the drug -- and the fact this went on to improve over time showed
that the company had succeeded in preserving the long term value of the
brand. Companies, who had been criticized for less than honest handling of
a crisis, found their reputation damaged for as long as five years after a
crisis.
In fact, according to academic
researchers, there is some evidence that it was rewarded by consumers who
were so reassured by the steps taken that they switched from other
painkillers to Tylenol.
The features that made 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
But Johnson & Johnson was
not done. It had to come up with a campaign to re-introduce its product
and restore confidence back to the consumer. According to a variety of
academic studies of the Tylenol case; 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.
Johnson & Johnson’s
responsibility to its publics proved to be its most efficient public
relations tool. It was the key to the brand’s survival. This case
has a unique place in the study of public relations because the company
was open, direct, honest and successful. Nearly 30 years later companies
CEOs, government officials, politicians and others should take heed.
Soterios
Zoulas is president of Zoulas
Communications, advising
clients on crisis communications, and also teaches public relations at
several Boston area colleges, with more than 25 years experience in
public relations, journalism, radio and television.
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