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Please read the case study BELOW and answer all questions below. No examples are required.
Based on the attached Tylenol Murders case study evaluate the effectiveness of the communication between the organization and its intended public(s). Publics are employees, customers, stakeholders, investors, board of directors and the media.
1. Identify the different publics involved in the case study.
2. Differentiate between the internal and external publics involved.
3. What impact did the communications have on the intended public(s)?
4. Could the message have been communicated more effectively? How?
6. Evaluate the benefits and risks of using these tools.
7. What other tools would you have used?
8. If this crisis were to occur today, how would new technologies, such
as the Internet, impacted this case?
9. Due to the recent globalization of markets, would the outcome of this
case be different if the events occurred today?
Arguably, the two most important cases in the history of the practice of public relations occurred within four years of each other to the same company and product.
For close to 100 years, Johnson & Johnson Company of New Brunswick, New Jersey, was the epitome of a well-managed, highly profitable, and tight-lipped consumer products manufacturer.
That image changed on the morning of September 30, 1982, when Johnson & Johnson faced as devastating a public relations problem as had confronted any company in history.
That morning, Johnson & Johnson's management learned that its premier product, extra-strength Tylenol, had been used as a murder weapon to kill three people. In the days that followed, another three people died from swallowing Tylenol capsules loaded with cyanide. Although all the cyanide deaths occurred in Chicago, reports from other parts of the country also implicated extra-strength Tylenol capsules in illnesses of various sorts. These latter reports were later proved to be unfounded, but Johnson & Johnson and its Tylenol-producing subsidiary, McNeil Consumer Products Company, found themselves at the center of a public relations trauma the likes of which few companies had ever experienced.
Tylenol had been an astoundingly profitable product for Johnson & Johnson. At the time of the Tylenol murders, the product held 35 percent of the $1 billion analgesic market. It contributed an estimated 7 percent to the company's worldwide sales and almost 20 percent to its profits. Throughout the years, Johnson & Johnson had not been-and hadn't needed to be-a particularly high-profile company. Its chairman, James E. Burke, who had been with the company for almost 30 years, had never appeared on television and had rarely participated in print interviews.
Johnson & Johnson's management was caught totally by surprise when the news hit. The company recognized that it needed the media to get out as much information to the public as quickly as possible to prevent a panic. Therefore, almost immediately, Johnson & Johnson made a key decision: to open its doors to the media.
On the second day of the crisis, Johnson & Johnson discovered that an earlier statement that no cyanide was used on its premises was wrong. The company didn't hesitate. Its public relations department quickly announced that the earlier information had been false. Even though the reversal embarrassed the company briefly, Johnson & Johnson's openness was hailed and made up for any damage to its credibility. Early on in the crisis, the company was largely convinced that the poisonings had not occurred at any of its plants. Nonetheless, Johnson & Johnson recalled an entire lot of 93,000 bottles of extra-strength Tylenol associated with the reported Chicago murders. In the process, it telegrammed warnings to doctors, hospitals, and distributors, at a cost of half a million dollars. McNeil also suspended all Tylenol advertising to reduce attention to the product.
Early on in the crisis, the company was largely convinced that the poisonings had not occurred at any of its plants. Nonetheless, Johnson & Johnson recalled an entire lot of 93,000 bottles of extra-strength Tylenol associated with the reported Chicago murders. In the process, it telegrammed warnings to doctors, hospitals, and distributors, at a cost of half a million dollars. McNeil also suspended all Tylenol advertising to reduce attention to the product.
But what about all those other millions of dollars worth of Tylenol capsules on the nation's shelves?
The company was convinced such a massive recall wasn't warranted by the facts. It was convinced that the tampering had taken place during the product's Chicago distribution and not in the manufacturing process. Further, the FBI was worried that a precipitous recall would encourage copycat poisoning attempts. Nonetheless, five days later, when a copycat strychnine poisoning occurred in California, Johnson & Johnson did recall all extra-strength Tylenol capsules-31 million bottles-at a cost of more than $100 million.
Although the company believed it had done nothing wrong, Johnson & Johnson acted to assuage public concerns. It also posted a $100,000 reward for the killer or killers. Through advertisements promising to exchange capsules for tablets, through thousands of letters to the trade, and through statements to the media, the company hoped to put the incident into proper perspective. At the same time, Johnson & Johnson commissioned a nationwide opinion survey to assess the consumer implications of the Tylenol poisonings. The good news was that 87 percent of Tylenol users surveyed said they realized that the maker of Tylenol was "not responsible" for the deaths. The bad news was that 61 percent still said they were "not likely to buy" extra-strength Tylenol capsules in the future. In other words, even though most consumers knew the deaths weren't Tylenol's fault, they still feared using the product.
But Chairman Burke and Johnson & Johnson weren't about to knuckle under to the deranged saboteur or saboteurs who had poisoned their product. Despite predictions of the imminent demise of extra-strength Tylenol, Johnson & Johnson decided to re-launch the product in a new triple-safety-sealed, tamper-resistant package. Many on Wall Street and in the marketing community were stunned by Johnson & Johnson's bold decision.
So confident was Johnson & Johnson's management that it launched an all-out media blitz to make sure that people understood its commitment. Chairman Burke appeared on television shows and in newspaper interviews.
The company even invited the investigative news program 60 Minutes-the scourge of corporate America-to film its executive strategy sessions to prepare for the new launch. When the program was aired, reporter Mike Wallace concluded that although Wall Street had been ready at first to write off the company, it was now "hedging its bets because of Johnson & Johnson's stunning campaign of facts, money, the media, and truth."
Finally, on November 11,1982, less than two months after the murders, Johnson & Johnson's management held an elaborate video news conference in New York City, beamed to additional locations around the country, to introduce the new extra-strength Tylenol package. In the months that followed Burke's news conference, it became clear that Tylenol would not become a scapegoat. In fact, by the beginning of 1983, Tylenol had recaptured an astounding 95 percent of its prior market share. Morale at the company, according to its chairman, was "higher than in years." It had acted true to the "Credo," which spelled out the company's beliefs. The euphoria lasted until February 1986 when, unbelievably, tragedy struck again.
Late in the evening of February 10, 1986, news reports began to circulate that a woman had died in Yonkers, New York, after taking poisoned capsules of extra-strength Tylenol.
The nightmare for Johnson & Johnson began anew.
Once again, the company sprang into action. Chairman Burke addressed reporters at a news conference a day after the incident. A phone survey found that the public didn't blame the company. However, with the discovery of other poisoned Tylenol capsules two days later, the nightmare intensified. The company recorded 15,000 toll-free calls at its Tylenol hot line. Once again, production of Tylenol capsules was halted. "I'm heartsick," Burke told the press. "We didn't believe it could happen again, and nobody else did either."
This time, although Tylenol earned some 13 percent of the company's net profits, the firm decided once and for all to cease production of its over-the-counter medications in capsule form. It offered to replace all unused Tylenol capsules with new Tylenol caplets, a solid form of medication that was less tamper-prone. This time the withdrawal of its capsules cost Johnson & Johnson more than $150 million after taxes.
Once again, in the face of tragedy, the company and its chairman received high marks. As President Reagan said at a White House reception two weeks after the crisis hit, "Jim Burke of Johnson & Johnson, you have our deepest appreciation for living up to the highest ideals of corporate responsibility and grace under pressure."
A discussion, in essay form, of the Tylenol public relations crisis. Responses to questions and how the crisis changed the perception of the Tylenol company and how they met the challenges created by the crisis. A brief note on how globalization would have affected the case.