In early 1982, Tylenol was the most successful non-prescription medication in the United States with over one hundred million users. The brand was esponsible for 19 percent of J&J's profits during the first 3 quarters of 1982. In addition, 13 percent of the companys year-to-year sales growth and 33 percent of the year-to-year profit growth was the direct result of the brand. In the era before Ibuprofen (approved by FDA for OTC use in 1984), Tylenol was the leader in the painkiller field accounting for a 37 percent market share, outselling the next four leading painkillers combined.The Tylenol brand, itself, had profits that would have placed it in the top half of the Fortune 500 (ten Berge, 1991). During the fall of 1982 an unknown person or persons, and for unknown reasons, laced Tylenol Extra-Strength capsules with cyanide and returned the product to the shelves of groceries, markets, and pharmacies in the Chicago area.
The laced capsules were purchased and seven unsuspecting people died. Contaminated bottles continued to be discovered through October (Malcolm, 1982). suddenly found itself in the middle of a situation that required skilled management and strong crisis communication.J;J's first action was to immediately alert consumers nationwide not to consume any ype of Tylenol product in pill form. Not only did J&J stop the production and advertising of Tylenol, the company withdrew all capsules from stores in the Chicago area.
Two more contaminated bottles were discovered and J&J ordered a national recall of every capsule, worth over $100 million. By withdrawing all Tylenol, J&J showed the consumers that they would rather take the financial risk of a recall rather than accept the public safety risk.In fact, within days the incident, J&J's stock fell seven points, and within a month J; eight percent (Lewin, 1986). 's market snare ot C pain-reliever tell to sed the all available media, including advertising, to issue the "do not use" alert, to announce the recall and to communicate their crisis response strategy. A 1-800 telephone hotline was established for consumers to call with inquiries concerning safety of Tylenol.
Another toll-free number was established for news oulets to call and receive recorded messages with updated statements about the crisis (ten Berge, 1991).For the major press conferences held at corporate headquarters, paid for and set up a live television feed via satellite to the New York metro area, allowing the ress conferences to reach a national audience. J&J CEO, Jim Burke received additional positive media exposure through interviews on 60 Minutes and the Phil Donahue show (Fink, 1986). In addition to the rapid PR campaign, developed new safety seal packaging in which the boxes were glued shut; a plastic seal covered the necks of the bottles; and a foil seal was added over the mouth of the bottle under the cap.When Tylenol was re-introduced Just 6 months after the crisis occurred, it had a new form (caplet instead of the capsule) and was the first OTC product to use new, mulit-layer tamper esistant packaging (ten Berge, 1991).
offered free replacement of the capsules and special coupons for future purchases in an attempt to recapture its customer base. J&J's strategy was successful, and by the next summer, had rehabilitated the reputation of the Tylenol brand, restored the trust of the public, and regained its pre- crisis market share (Lewin, 1986).
