WEATHERING A BRAND CRISIS: THE TYLENOL EXPERIENCE

CASE STUDY ANALYSIS

Submitted to: Muhammad Ahmed Butt

Submitted by: Rasim Nayyar

Registration No: 10564

Submission Date: 29-12-2009

Subject: Brand Management

 Weathering a Brand Crisis

Table of contents:

Acknowledgement:....................................................................................................3
Introduction to the Case:..........................................................................................4
History of the Case:...................................................................................................5
SWOT Analysis:..........................................................................................................6
Strategic Marketing Objective:..................................................................................8
Branding Strategy:.....................................................................................................9
Marketing Strategies:..............................................................................................11
Recommendations:.................................................................................................15
Annexure:................................................................................................................17

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Acknowledgement:
In the name of Allah, most Gracious, most Compassionate. I would like to thank
Allah, the most merciful and beneficent, who give us the opportunity, and blessed
us with the ability to read, right and understand the knowledge of this world
which is a blessing.

I especially want to thank Mr. Muhammad Ahmed Butt, our course instructor,
from the very first day with all his heart and soul, along with his unique teaching
style, he taught us to understand this difficult track and how to firmly grasp the
concepts.

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Introduction to the Case:

The case guides us through the origins of the Tylenol brand and crisis faced by
Tylenol and as to how it survived one of the medical world’s worst catastrophes.

Originally introduced by McNiel laboratories as a liquid substitute for children,

Tylenol was bought by Johnson & Johnson Company in 1959 . Through the years
the brand steadily gained ground and by 1982, Tylenol was the absolute leader in
the painkiller field accounting for a 37 percent market share and contributing
towards 8 percent of the total sales by Johnson & Johnson.

Tylenol was on the path of success when it had to face a very terrible situation,
seven people were reported dead in the Chicago area after consuming extra-
strength Tylenol capsules which had been tampered and contained cyanide
poison. Its success quickly plummeted and the incident damaged the brand
equity, image and trust of the people.

The company handled the situation so well that in less then 6 months it was able
to recover its position as though the situation never occurred, a classic example as
to how to handle a crisis.

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History of the Case:

October 1982 marked a trying time for the management of Tylenol, 7 people
were reported dead in the Chicago area due to consumption of the extra strength
Tylenol capsules. The brand which had steadily been gaining market share since
its introduction back in 1959 had crashed and now faced certain death.

The management at Tylenol was struck with a crisis and required nothing short of
a miracle to come out with their brand unscathed. They took immediate steps in
order counter the situation, the current production recall was the initial step to
ensure that no further damage was done. The recalled batches were analyzed and
rewards were offered in order apprehend the culprit.

All active advertisements were shutdown and all information was communicated
through press conferences. A 24 hour toll free help line was set up to respond to
the consumer queries and consumer response was also carefully monitored.

With specialized advertisement and a new tamper proof pack Tylenol was able to
jump back to the same position it had been before the incident in a time span of
less than six months.

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SWOT Analysis:

Strengths:

 Customers are loyal with Johnson & Johnson.

 Company is maintaining good relationship with upstream partners.
 Labor relations are consistent with governing laws.
 Production processes and procedures are up to the mark.

Weaknesses:

 Customers are loyal to who ever provide value to them.

 Johnson & Johnson is having formidable competitors.
 The strategic directions including vision, mission and strategic objectives
needs improvements.
 Marketing management needs refinement and improvement.
 Human Resource Management needs improvement.

Opportunities:

 Economic conditions are reasonably favorable.

 Johnson & Johnson’s managing social shift reasonably.
 Company is internalizing reasonably all the law including its articles and
classes.
 Political environment are conducive for industries.
 Johnson & Johnson is equipped with latest technology.
 The international environment reflects sign of stability.

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Threats:

 U.S.A is experiencing social shift.

 Legislations are being passed frequently in U.S.A.

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Strategic Marketing Objective:

 Rebuild the customers trust.
 Restore the brand equity.
 Within a short span of time take out the Tylenol brand from the crisis
situation back to its previous state of success.
 Establishing management programs to prevent such happenings in the
future.

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Branding Strategy:.
With the help of CBBE model we will rebuild the Tylenol brand.

By using brand salience, we will create and increase more awareness of our
brand, will define clearly our product category so customer can recognize and
recall Tylenol easily in different situations or under different conditions and
also to create strong associations and to ensure that customer know 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 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 or
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.

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.

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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.

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Marketing Strategies:

Target and Positioning Strategy:

 The target market of the Tylenol brand has and will remain the children and
adults seeking pain relief.

 The trust positioning should be continued along with the consumer’s safety
being the priority. The hospitals and doctors theme should be continued so
as to convey that it is still their choice despite what happened and as
medical institutions are willing to put their trust in Tylenol then people
should also not be afraid.

 Heavy focus on tamper proof packaging so as to communicate safety.

Assurance that product tampering is practically impossible without it being
clearly identified.

Product Strategy:

 Packaging of the new batches should be clearly distinguishable (such as

different color scheme) from the old ones so as to identify the product
separately and thus instill confidence in the consumer that the product is
safe as it is a new batch.

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 Product should have a new tamper proof packaging to ensure that no

tampering incidents can occur in the future.

Pricing Strategy:

 The price of the product would not be altered as once a price drop has
been established then raising back the price would result in resistance from
the consumers.

 The product would be distributed as complimentary by bundling it with

other pain relief medicine offered by the company (the capsules would be
bundled with the tablets) so that people do not abandon the use of the
product, then as signs of recovery begin to show we would shift from the
complimentary offerings and move towards discount coupons so as to
maintain an incentive to buy the product.

Distribution Strategy:

 As the initial tampering was “almost certainly done by some deranged

person outside of the company” therefore to prevent such a happening,
future distribution should be highly monitored.

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 Official booths should be setup which would distribute new batches and
replace the current capsules so as to make sure no Tampering is possible
from when product leaves the factory and actually reaches the customer.

 Push strategy should be considered and pharmacists, retailers and doctors

should be given incentive to push the product into the customers hand and
also educate them regarding the incident and as to how this could have
happened to any other brand and how the company is going out of its way
to help prevent its consumers from harm and to prevent such a happening
in the future.

Promotional Strategy:

 The patients who have been prescribed Tylenol by doctors should be

approached by salespeople and educate them about the incident as to how
this was not the fault of the company. The salespeople would also replace
the existing capsules along with distributing free samples.

 The regular advertising would be stopped and focus should be setup on

how the incident was not the company’s fault and yet to what length the
company is going in order to help protect the consumers, this would
highlight the batch recall and product replacement along with the reward
to help catch the person responsible.

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 Complimentary samples would be distributed to people looking for pain

relief medicine (non-prescription patients) at pharmacies and other
medicine retail outlets, the distribution would be closely monitored. There
would not be distribution of free samples on the retail end as it would
imply that the fault was on the company’s part and that it is now making up
for its fault. The complimentary samples would also be accompanied by a
note which would communicate that Tylenol is still reliable and safe as
ever.

 Doctors would be approached and asked to educate their patients about

the incident and help rebuild their trust in the product and the brand. Free
physicians sample should be provided along with other incentives to ensure
their commitment towards the brand.

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Recommendations:
 Under no circumstances would the company portray a defensive stance in
front of the public, doing so would communicate that company was not at
fault. A defensive stance would communicate that the company is to blame
and that it is now making up for its mistake.

 The company’s CEO should step up to the incident and through a press-
conference communicate his condolences to the families of those who
were affected by the incident. He should have gone on to explain what
measures have been taken by the company to ensure that consumers are
safe. A reward should also be announced for catching the culprit, to
communicate how concerned the company is.

 Constant communication by the media about what measures have been

taken to protect the consumers and prevent such an incident from ever
happening. Trust has been how Tylenol has been positioned and
consumer’s trust is what the company needs at this point in time.

 Recruit medically relevant figures as brand representatives to communicate

the safety of the product and the company.

 The company should not withdraw from its advertising; rather this is the
time when more efforts need to be done in order to promote awareness

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about the brand so that no further damage is done. Consumers should be

educated about the tampering and informed which batches to avoid.

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Annexure:
 Strategic Brand Management (Third Edition) By Kevin Lane Keller
 [Link]
 [Link]
[Link]
 [Link]
 [Link]

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