Tylenol Scandal and Crisis Management

"The PR industry has an important role to play in helping companies identify and manage risks that could damage their reputation." Nick Purdom of PR Week

THE TYLENOL CRISIS, 1982

What happened?

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 (Mitchell, 1989). 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 (Mitchell 1989).

What did Johnson & Johnson do?

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. (Lazare, Chicago Sun-Times 2002) 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.

How did Johnson & Johnson re-introduce the product to 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.(Mitchell 1989) 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. (Mitchell 1989)

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. (Mitchell 1989)

4. Over 2250 sales people made presentations for the medical community to restore confidence on the product. (Mitchell 1989)

What was Tylenol's basis for its crisis management program?

The reason Tylenol reacted so quickly and in such a positive manner to the crisis stems from the company’s mission statement. (Lazare Chicago Sun-Times 2002). On the company’s credo written in the mid-1940’s by Robert Wood Johnson, he stated that the company‘s 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 & Johnson’s responsibility to its publics first proved to be its most efficient public relations tool. It was the key to the brand’s survival.

Tylenol is one of thousands of companies who have faced a crisis that can be destructive to its company if not handled properly. In 1999, 17 years later, when Coca-Cola was faced with a crisis of its own, Nick Purdom of PR Week wrote that "the PR industry has an important role to play in helping companies identify and manage risks that could damage their reputation."
While Tylenol succeeded in managing its crisis, the Exxon case was not as successful.