Out of the Box

Marketers Take to Tylenol

By Menachem Lubinsky on July 26 2009

The Food and Drug Administration recently cautioned consumers about acetaminophen, the active ingredient in Tylenol, warning that excessive dosage of the popular drug can lead to liver damage. If you are Johnson & Johnson, the manufacturers of Tylenol what do you do? The choices might be: (a) refute the FDA’s findings by quoting your own study that the drug is not damaging to the user’s health (b) agree, but somehow convince consumers that the drug is safe or (c) do something bold that at the end of the day ingratiates you with consumers long after the crisis dissipates.

J & J took the second option by taking out full page ads saying that the drug is “the safest brand of pain reliever you can choose” unless the dosage is excessive, in which cases the FDA warning applies. Tylenol has a lot to be concerned about, not only for its image but its ultimate profitably. For example, the FDA might require that Tylenol Extra Strength could no longer be sold over-the-counter but only be available by prescription, which could dramatically reduce usage. Tylenol will no doubt argue that it will go to great lengths to educate consumers about the proper dosage, thus hoping to keep the drug on shelves without a prescription.

Tylenol has long been a study in damage control for marketers. In 1982, the company faced a PR nightmare when an unknown criminal laced Extra Strength Tylenol with cyanide, killing seven people. The company immediately removed 31 million bottles from the market at a cost of $100 million and made lemonade out of lemons by becoming the first drug company with tamper-resistant seals on its packaging. Its effective crisis management became the model for students of corporate crisis management. In fact, the Reagan White House is said to have adopted this mode of “quickly cutting its losses” in the Iran-Contra scandal.

The response by Johnson & Johnson this time around was another example of the company’s remarkable crisis management skills. It essentially jumped on the government’s own language that excessive use can cause the liver damage, which in essence means that if used normally, the drug is in fact the “safest brand of pain reliever.” It was an admission of sorts but the company is again trying to make lemonade out of lemons by suggesting that it is not only a safe product, but the “safest.”

In 1982, it came up with probably the only solution that could have saved it. It quickly introduced tamper-resistant packaging, and Tylenol sales swiftly bounced back to near pre-crisis levels. There is a difference between the 1982 fiasco and the FDA’s announcement in 2009. In 1982, an outside force caused the safety concern; this time around J & J stands accused of producing a product that may potentially be damaging to the health of its users.

With all of the corporate scandals that America has faced in recent years, this distinction was made clear. The public is largely unforgiving when it believes that a corporation has violated its public trust and attempted to perpetrate a fraud. It can, however, understand a company when external forces caused the problem, as was the case in the 1982 Tylenol crisis.

Irrespective of what precipitated a crisis in a corporation, the faster a company comes clean, the better its outlook for the future. If Tylenol had hedged even a bit and said, for example, that it was looking into the FDA’s assertions, it might well have been in a position of no-return. By quickly jumping on the FDA’s own phraseology about the use of the product, the company was even able to add a claim about being the “safest,” positioning itself favorably against similar brands that also have acedemomphin.

Many people in business find it hard to say the word “sorry,” and by the time they realize that nothing short of an apology will do, the damage was done and potentially irreversible.

I once counseled a food company with a quality issue to release a statement apologizing for the quality problem and reassuring customers that it had changed its ingredients, with a quote from a prominent food chemist to reinforce the message. The company balked fearing that the statement would only serve to make its problems more public. The problem festered until the company ultimately lost considerable sales and dropped the line altogether. One significant reason was that a competitor took advantage of the situation and won key market share from the company with the problem.

It wasn’t only that Johnson & Johnson acted to protect the brand; it was the swiftness with which they address crisis situations. Of course, one must have confidence in the crisis management team that it can make the right decision at a critical moment. But so far, marketers cannot point to a single strategy that Johnson & Johnson did wrong. On the contrary, it is widely heralded for its expert crisis management and ability to be “quick on its feet.”

There is a lesson to be leant from this for all of us, because invariably all of us become embroiled in some sort of situation that calls for crisis management, albeit not nearly as potentially damaging as the Tylenol case. The bottom line is that the strategy that seems to have the best long term effect is to come clean and to make lemonade out of lemons.

Out of the Box is a collection of strategic marketing articles that Lubicom has published on various topics, trends and ideas in the marketing world. The articles have been published in the Hamodia weekly newspaper circulated on three continents to a readership of well over 100,000.

The name, "Out of the Box" is a term used frequently in business nowadays to describe creative thinking that is not the norm. It is meant to help a business pull away from the pack or separate oneself from the competition. It is to some extent fraught with risk, simply because it is not the run of the mill thinking, but it is at the same time the key to reaching the next opportunity.