Crisis Management at Bausch & Lomb: The ‘ReNu Mositureloc’ Controversy

Sarvesh Gupta (318) Aliasgar Navagharwala (425) Jai Awatramani (402)

MBA(Tech.), Marketing, Class of 2004-09, NMIMS University

“When written in Chinese the word crisis is composed of two characters. One represents danger and the other represents opportunity.”
-- John F. Kennedy

The Crisis
• Bausch and Lomb

A Product Crisis

Impact on the Brand

The use of IMC by Bausch and Lomb

Conclusion & Learning's

Bausch and Lomb
• An eye care company • Started by a German Immigrant John Jacob Bausch and Henry Lomb • Businesses in
– Contact Lenses – Eye Care – Pharmaceuticals – Cataract and Viteroretinal – Refractive Surgery

Bausch and Lomb – The Corporate Brand
• Employs over 14000 people • Products in more than 100 countries • Revenues for 2004 – US$ 2.2 Billion

The Start
1. 5. 2. 3. 4.

The Crisis
• June 15, 2005 First reported fusarium case reported in the United States • November 2005 Hong Kong health officials tell Bausch & Lomb about the noted increase in hospital admissions due to contact-lens-related keratitis from June to September 2005.

What keratitis looks like..

• December 2005 Bausch & Lomb mentions but downplays the Hong Kong incident to the FDA.

• February 20, 2006 Bausch Lomb voluntarily suspends sales in Singapore, Malaysia, and Hong Kong after 29 cases of fungal keratitis are found in Asia since November 2005.

• March 22, 2006 FDA begins inspection of Bausch & Lomb, Greenville, S.C. plant.
Reigon Americas Europe Asia Revenue 955.5 819.9 456.9 Contributi on 43 37 20 Growth(yo-y)% 6 13 16

• April 10, 2006 Bausch & Lomb stopped shipping product to U.S. stores but said stores could continue to sell existing product until supplies ran out. "There's no indication there is a formula problem here," CEO Zarrella said.

• April 12, 2006 Singapore: 36 more cases of fusarium keratitis reported since the last update in late February (then 39 cases). In total, 75 cases of fungal corneal infection with a history of contact lens use have been reported.

• April 12, 2006 Bausch & Lomb said that neither the company nor any of the five federal inspectors had found any evidence

• April 15, 2006 The company asks retail stores to take ReNu with MoistureLoc Bausch and Lomb contact lens solution made in the Greenville plant off the shelves temporarily

• April 20, 2006 Bausch Lomb “class action lawsuits” likely in multiple states. • Law firms such as Hissey Kientz LLP start taking B&L to court

• May 15, 2006 Bausch Lomb is permanently removing its Greenville-made ReNu with MoistureLoc Baush and Lomb contact lens solution from the worldwide market

Key difficulties for B&L
• Product recall turned tricky
– Not as “simple as Tylenol Recall”

• No direct Evidence found
– Only “high correlation” was found

• Integration of Communication
– Retail stores are not selling the product but the company website still offered the product for sale

The Ultimate Question
• Would B&L allow a $45 million business (eyecare) to destroy a $500 million company?

Effects………………Impacts
• • • • Media Lawyers Financial Online

News channels
• Video

Print Media Affects

Link

Lawyers have a merry time!!!!!
• Video 1 • Video 2

Financial Crisis

Online Affects

• http://www.fda.gov/bbs/topics/news/2006 • http://www.monheit.com/ReNu/timeline.a • http://www.thehindubusinessline.com/20

Reply by Bausch and Lomb
• A full page Newspaper Ad in USA today • Return of Product offer • Public Relations Campaign • National Advertising Campaign launched in April 2006

What did the Ad contain…
• Tell the customers to go and visit a doctor to have a eye check up. Video 4 • Also adviced the customers to use other lens soslution as Renu MoistureLoc was temporiorialy been suspended from the market • Follow guidelines from the American Optmetric Assocaition

We care……
• Video

Effect on India
• Video

Support from AAO (American Academy of Ophthalmology)
• Video

Lawyers come to the rescue
• Video

Corporate Communication Strategy Framework
Messages

Corporati on

Constituencies

Constituent’s Response

Corporate Communication Strategy Framework
Messages
 What is the best communication channel?

Corporation
 What does the organization want each constituency to do?  What resources are available? – Money – Human resources – Time  What is the organization’s reputation?

 How should the organization structure the message?

Constituencies
 Who are the organization’s constituents?  What their attitude about the organization?  What is their attitude about the topic?

Constituent’s Response
 Did each constituency respond in the way the organization wished?  Should the organization revise the message in light of the constituency responses?

• Get on the scene

Internal Branding/Communication Strategies During a Crisis

• Choose your channels carefully • Stay focused on the business • Have a plan in place • Improvise from a strong foundation

Bausch and Lomb Press Releases
• February 20, 2006 Bausch Lomb voluntarily suspends sales in Singapore, Malaysia, and Hong Kong after 29 cases of fungal keratitis are found in Asia since November 2005. • March 22, 2006 FDA begins inspection of Bausch & Lomb, Greenville, S.C. plant.

Bausch and Lomb Press Releases
March 31, 2006

Bausch and Lomb Press Releases
April 7, 2006

Bausch and Lomb Press Releases
April 10: Bausch & Lomb stopped shipping product to U.S. stores but said stores could continue to sell existing product until supplies ran out. "There's no indication there is a formula problem here," CEO Zarrella said.

Bausch and Lomb Press Releases
April 10, 2006

Bausch and Lomb Press Releases
April 10, 2006

Bausch and Lomb Press Releases
April 11, 2006

Bausch and Lomb Press Releases
April 12, 2006 Singapore: 36 more cases of fusarium keratitis reported since the last update in late February (then 39 cases). In total, 75 cases of fungal corneal infection with a history of contact lens use have been reported.

Bausch and Lomb Press Releases
April 13, 2006

Bausch and Lomb Press Releases

April 20, 2006 Bausch Lomb class action lawsuits likely in multiple states.

Bausch and Lomb Press Releases
May 15, 2006

Bausch and Lomb Press Releases
May 16, 2006

Bausch and Lomb Responses

The Result
On May 15, 2006, Bausch & Lomb announced its decision to permanently remove its MoistureLoc contact lens solution from worldwide markets. And starts an enquiry in its Greenwile Manufacturing facility

The Learning's
• A Crisis of the Brand Government Print Media • How Public to manage such a crisis? cial Finan • The Critiscm Crisis use of Integrated Marketing TV News FD A Communications. Commercial • Changing the Brand positioning s nd ra is Fau B s lty ri Media Prod C ucOnline Rage t

“The easiest period in a crisis situation is actually the battle itself. The most difficult is the period of indecision whether to fight or run away. And the most dangerous period is the aftermath. It is then, with all his resources spent and his guard down, that an individual must watch out.”
-- Richard Nixon