This paper is in reference to the ethical issues related to the corporate and personal decision-makings surrounding the Tylenol product recalls, and the reputation of the brand name. This paper will focus on the rebound tactics Johnson & Johnson along with their advertising company, Compton Advertising, took in efforts to recover from such devastation. Tylenol’s Crisis In 1982, Tylenol discovered that their Tylenol Extra Strength capsules been tampered with subjected to a Cyanide-lace poison, which took the lives of seven people in the Chicago area.
This distress sent the company, manufactured by international health-products Johnson & Johnson in a panic causing them to pull millions of bottles off the market. This crisis sent the company from a 35. 4% margin via the over-the-counter analgesics market to a shaky 18. 3% by the end of the year. However, within one year from the crisis, Tylenol recouped a market of 28. 6% of the $1. 2-billion market of the non-prescription pain relievers, or in another retrospect, 80% of its total prior to the crisis (Gini & Marcoux 2009, p36).
The Recovery Plan
Though the product recall was quite extensive (media, messages and tests of the capsules) costing the company tens of millions of dollars and a tarnished reputation, Johnson & Johnson along with their advertising company, Compton Advertising, backing out and letting the name brand since the late 1950’s and quite was not an option for them. Though the set back was huge, this affected several non-prescription drugs pertaining to how they being packaged. Within the first few hours after the poisonings were traced to Tylenol’s capsules, Johnson & Johnson set up their task force with their top executives.
The Term Paper on Johnson Toy Company
Introduction Efficiency and success of any organization is measured by the effect of its policies to successfully manage its operation. Lack of policies creates confusions among employees and impacts the effectiveness of the organization. As a result of its failing return policy, Johnson Toy Company is challenged with major revenue losses and is considering measures to correctly deal with the ...
Their main concerns for the company were to first, assist the damage sustained to the company, and determine how to overcome this ordeal. The Compton Advertising team contemplated on resurfacing the product under a new name, but Johnson & Johnson worried that this would worsen their potential for business (Gini & Marcoux 2009, p37).
Johnson & Johnson desired to find an ethical way to resurface their product and how they did this was sheer genius. Decisions To Be Made The first major decision carried out by Johnson & Johnson was to pull out two lots of Tylenol capsules from the shelves of Chicago.
Second was to halt all advertising, within the next few days, the capsules were removed from the market nation wide. Their third step was to launch a consumer research team to judge on the public’s perception of the company. Their fourth decision was for Compton Advertising to run a newspaper advertisement approximately ten-days after the tragedy and offer to swap tablets for capsules, after learning that the capsules were the tainted product. Finally, the decision was made to generate tamper resistant packaging to ensure the safety of their products (Gini & Marcoux 2009, p37).
Strategies were also being developed on how to rebuild the brand and what advertising curve could they develop once the crisis was over. The company took the outlet of offering coupons for consumers, and discounts for retailers. Finally, the company received a letter from the Food & Drug Administration stating that they were satisfied with their investigation of finding no criminal tampering with the product at the plant, which manufactured the product. This gave Johnson & Johnson the wild card and quickly publicized this letter in hopes of erasing the doubts of their product.
Though the company had hoped for a great outcome, the chairman of Johnson & Johnson decided to hold off on pressing the new advertisements since this was near Halloween, they feared this release would spark a series of ‘copycat’ crimes. Once the ad aired, great response was received. Many people in the consumer market felt that it was not Tylenol’s fault on the tragic deaths, and that they would indeed continue to purchase the product once it was offered in a tamper resistant container (Gini & Marcoux 2009, Pp. 7-38).
The Research paper on General Electric Medical Systems – Global Product Company Concept
The Global Product Company concept means ”to concentrate manufacturing – and ultimately other activities – wherever in the world it could be carried out to GE’s exacting standards most cost-effectively”. That means that the production is moving to countries where people are mostly underutilized (the example given in the case study tells about engineers from Eastern Europe, who cost only $1,5/h). ...
Conclusion Though the company of Johnson & Johnson took a $100-million pretax write-off on the Tylenol losses for the 1982 deaths, Tylenol contributed as estimated 7% of Johnson & Johnson’s worldwide sales of $5. 4-billion and between 15% and 20% of its profits of $467. 6-million in 1981. Consumer choices are what brought this company back from the huge blow they endured over the deaths. Brand reputation plays a great role in advertising and marketing.
While Tylenol went forward with their same budget and took the same road of advertising, they were able to learn from their losses and move forward with their great ethical efforts in their product (Gini & Marcoux 2009, Pp. 38-39).
”I don’t know that there’s a case on record of a brand that has taken two shots to the head like that and come right back,” said Benjamin Lipstein, the chairman of National Brand Scanning Inc. , a market research concern. ”It’s amazing. ‘ As increasing numbers of companies must cope with product tampering, the story of Tylenol’s performance provides a case study of effective crisis management.
