ACE INSTITUTE OF MANAGEMENT

Strategic Brand Management

Assignment#2:The Tylenol Crisis
Submitted to: Suman Shakya 4/23/2012

Submitted by: Sirish N. Shakya

Summary of The Tylenol Crisis

In October of 1982, Tylenol, the leading pain-killer medicine in the United States at the time, faced a tremendous crisis when seven people in Chicago were reported dead after taking extra-strength Tylenol capsules. It was reported 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. 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 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. Once the connection was made between the Tylenol capsules and the reported deaths, public announcements were made warning people about the consumption of the product. Johnson & Johnson was faced with the dilemma of the best way to deal with the problem without destroying the reputation of the company and its most profitable product. Following one of our guidelines of protecting people first and property second, McNeil Consumer Products, a subsidiary of Johnson & Johnson, conducted an immediate product recall from the entire country which amounted to about 31 million bottles and a loss of more than $100 million dollars. Additionally, they halted all advertisement for the product. Although Johnson & Johnson knew they were not responsible for the tampering of the product, they assumed responsibility by ensuring public safety first and recalled all of their capsules from the market. In fact, in February of 1986, when a woman was reported dead from cyanide poisoning in Tylenol capsules, Johnson & Johnson permanently removed all of the capsules from the market. Once the product was removed from the market, Johnson & Johnson had to come up with a campaign to re-introduce its product and restore confidence back to the consumer. 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 a $2.50 off coupon 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. The reason Tylenol reacted so quickly and in such a positive manner to the crisis stems from the companys mission statement. Since the companys responsibilities were to the consumers and medical professionals using its products, employees, the communities where its people work and live, and its stockholders. Therefore, it was essential to maintain the safety of its publics to maintain the company alive. Johnson & Johnsons responsibility to its publics first proved to be its most efficient public relations tool. It was the key to the brands survival.

Example of Brand Crisis in Nepal

In case of Nepal, Beer and mixed drinks are available at almost every bar and restaurant. If we ask for liquor at local places San Miguel, Everest Beer, Nepal Ice, Carlsberg, and Tuborg beer are the principal conventional beers served in Kathmandu. Yes, there is also a case which happened recently in 2011 with the Brand Tuborg Beer. Tuborg is an international leading brand in Beer Industry which is manufactured and distributed in Nepal by Gorkha Brewery. The incident as from source Himalayan News, The Police have arrested a retailer, a dealer and a company representative of Tuborg beer after two persons fell ill after drinking the beer in Mitranagar, Gongabu, Kathmandu. The arrestees are Pan Bahadur Adai, a Tuborg retailer in the locality, Shyam Shrestha, a dealer, and company representative Sandeep Subedi. According to the source, the victims are Devilal Gauchan and Chandra Singh Tamang fell ill after allegedly drinking Tuborg beer. The culprits are alleged of refilling of bottles of Tuborg beer with unhygienic liquids and stuffs. It is the times when, not only this brand is suffering a serious crisis or brand attacks, but there are other brands too which are being suffered such as Carlsberg, Royalstag, Khukuri Rum, Ruslan Vodka and so on in the whole liquor industry. The same incidents happen along with other such brands too where the publics have been deeply affected by it. Other brands suffered from illegal mixing of stuffs, finding defects in bottles of beer and expiry products being sold and people are being seriously injured by such activities.

Thus, in reaction with such incident the governments took serious action for public welfare. They attempt many raid, searches in warehouses of retailers and distributors, destroyed such inconsumable products and temporarily banned the sale and distribution of such products. Further the government imposed a legal seal of printed sticker of Inland Revenue Department to stop the smuggling and illegal mixing in liquor products. Eventually the sale of the Tuborg beer decreased so with the industry. Interestingly these cases in Nepal are not so rare and are regular incidents happening day by day. And so the company did not publish any sort of public announcement but tried to suppress the incident.