Case Study

The Tylenol Crisis

Presented To
Mr. M A Butt

MBA 4B

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Table of contents:

Acknowledgement 3

Introduction To Case 4

Case History 5/6

SWOT Analysis 6/7

Strategic Brand Objectives 7

Branding Strategy 8/9

Recommendation 9/10/11

Appendix 11

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Acknowledgments:
First of all I would like to thank Allah, the lord of known and unknown, the
most merciful and compassionate, who bestowed on us with his unlimited
blessings and made us better off than many. He gave me strength and
potential to be able to understand, read and write and helped me to pursue
the best education. I being his small creature do not have sufficient thank
you and gratitude for countless blessings he conferred me.

I especially want to thank Mr. M A Butt, the person who held my hand in the
beginning of the semester and helped me understand things and learn stuff
that I was unaware of, with a different and very convenient style. My
deepest gratitude goes to him. I was delighted to take Strategic Brand
Management from him. All the fear to speak in front of people has
considerably reduced. The reading habit has pretty much improved. The way
he taught the concepts has made my grip pretty much stronger on the
subject.

I’m looking forward to take other courses from him in subsequent semesters
and would like to become a successful marketer in future.

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Introduction to the case:
The case is about the crashing down of Tylenol’s success and its recovery
and how it became the number one remedy to headache as it was before the
famous Tylenol crisis.

The sudden downfall of the brand was due to the demise of seven people in
Chicago when they used Tylenol Extra Strength Capsules tempered with
cyanide poison. The damage was colossal that many marketing men
believed that it is irreparable. It was said in NYT by a famous advertising
guru that on one day every American believed that Tylenol might kill them
and there aren’t enough dollars and marketing men to change that.

Tylenol’s comeback from these crisis and attain the same status was a
classic example to deal with such crisis.

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History to case:
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 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.

During the fall of 1982, some deranged people 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.

Within the first week of crisis J&J issued a worldwide alert to the medical
community, set up a 24 - hour toll - free telephone number, recalled and
analyzed sample batches, briefed food and drug administration and offered a
$ 100,000 reward to apprehend the culprit of the tampering .Oct 5. J&J
began a voluntary withdrawal of brand from the market. The company
stopped advertising and communication with the public was in the form of
press releases.

On November11, 1982. Chairman of J&J had a live teleconference with 600

news reports from around the country announcing the return of Tylenol
capsules 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.

On Nov 28, 1982 60 million coupons offering free Tylenol product. Incredibly
by February 1983, sales for Tylenol had almost fully returned to the sales

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level the brand had enjoyed sis month before. J&J skillful handling of an
extremely difficult situation was a major factor in the brand come back.
Another factor was the strong brand association that was built trough trust
and consistent performance by the brand.

SWOT Analysis:
Opportunities:

1. Economic conditions apparently seem appropriate in USA.

2. There is social shift been witness in the environment and J&J’s armed
to internalized these social shifts.

3. J&J’s is equipped to internalize the legislation along with its

article/clauses.

4. Government policy is consistent and conducive for pharmaceutical

industry.

5. J&J’s equip with latest technology relatively speaking.

Threats:

1. Legislation are been passed focusing the pharmaceutical companies

and the tendency of passing the legislation is quiet frequent.

2. Industry is subjected to rapid technological change in the

manufacturing sector.

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Strengths:

1. Consumers are loyal with the corporate brand and they are moderately
loyal with Tylenol brand.

2. J&J’s enjoy formidable position in the competitive arena.

3. J&J’s maintaining good relationship with suppliers.

4. Company enjoys good relationship with CBR.

5. J&J’s need improvement in the strategic thinking and strategic

process.

6. J&J’s is financially strong.

7. Production system and process are of high standards.

Weakness:

1. J&J’s needs improvement in marketing management.

2. HRM needs improvement in human resource.

3. The competition is moderately fierce in the competitive arena.

Strategic brand objectives:

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 1. To rebuild the brand and achieve trust of the consumers within three
months.

2. To achieve the pre-tempering market share within three months.

3. To create awareness among masses by using the concept of brand

salience in CBBE Model.

4. To restore the brand equity using above method.

5. To provide contingency plan.

6. To get the same market status as it was before the incident.

Branding strategy:
We will rebuild the Tylenol brand by using CBBE model using the concept of
brand salience.

Using salience, we will try to deepen, broaden and increase the awareness of
our brand. Clearly define our product category. And make consumers able to
recall, recognize Tylenol under different conditions and also to create strong
associations. And also ensure customer which of their needs our products
can satisfy.

Then to differentiate us from competitors and to deliver our meaning, we

clarify point of difference and point of parity. Our brand’s (product)
performance is primary influence what they experience with our tablets and
capsules. How much reliable, durable and effective our product is and how
effectively they receive our product. To build brand image we try to meet
the psychological and social needs. Also to link many kinds of intangibles to
brand like, user profile, personality and values, history, heritage and
experience. It will help us to produce brand response. In this regard we will
use the 20 years of trust the brand already has with the consumers.

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Then to elicit positive response and reaction about brand we can use four
particular factors:

Brand quality

Brand credibility

Brand consideration

Brand superiority

Customers emotionally respond through their feelings about brand. Feelings

include warmth, fun, excitement, security, social approval and self-respect.
Positive brand judgments and feelings can favorably affect consumer
behavior.

Final step of this model is brand resonance, focuses on ultimate relationship

with our customers. To make our customer loyal to Tylenol, increase their
attachment, build brand community and actively engage them.

Recommendation to the management:

1- In the beginning of the crisis I would have the CEO of J&J’s to take the
press conference and assure the public that the tempering occurred
outside the company and the production is safe and certified by FDA.
Any further steps that company will take will be notified to the masses
through press releases and ads.

2- I will have the company to run an awareness campaign telling masses

that there is no problem in the production but to keep their trust and

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 health concerns in mind, we are discarding the capsules that were
distributed in Chicago.

3- I will recall the product from the same batch from all the major
markets in the country and re launch it after two months in new
packaging that is virtually temper proof.

4- I will launch a documentary on how company makes the product

following all the rules and regulation by FDA. The purpose of this
documentary will be to educate the people that though their
production is safe but still we are recalling the batch and that they can
still use the tablets. The documentary will end with the assurance of
FDA certified doctors that the production is safe and up to the
standards they propose for company. The documentary will conclude
with the tag line ‘Tylenol is safe, you can still use it’.

5- We will give commission to the pharmacy owners and distributors on

every sale of Tylenol tablets and to showcase the brand and help us
regain the trust by telling people that it is safe and still is the best
remedy to headache.

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 6- Radio is ultimate entertainment and info source for masses so we’re
targeting this medium to convince people through immense repetition
of the slogan that ‘Tylenol is safe, you can still use it’.

7- After all these trust building activities, we will launch Tylenol Temper
Proof packaging.

8- We will start couponing scheme by launching 20 million vouchers in

the first phase. The next couponing scheme depends on how many are
redeemed in this phase.

9- In the next campaign we will go back to full fledge television ads

telling people about the benefits of temper proof packaging. The ads
will feature people from the hospitals including doctors and patients
and the masses telling their perception about the new product
packaging.

With help of all these marketing and trust building activities I will help
Tylenol regain the trust and the same sales status in three months as it was
before the tempering incident. I will carry out all those activities in my
capacity and take all the necessary measures that, according to me, will help
elevate the brand once again.

Appendix:

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Kevin Lane Keller, The Tylenol Crisis, edition 3(Prentice Hall Publications)

Berge, “Crisis Communication Strategies,”

http://www.ou.edu/deptcomm/dodjcc/groups/02C2/Johnson%20&
%20Johnson.htm(DoD Joint Course in Communication, Class 02-C, Team 1,
1998)

Kevin Lane Keller, Brand Salience CBBE Model, edition 3(Prentice Hall
Publications)

SWOT Analysis was done in the case study session in the presence on the
facilitator Mr. M A Butt on 14th May, 2009.

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