Brand Crisis

Nikita khanduja - 221077

Nitish Girotra – 221082

Pankaj Bansal- 221084

Priyanka Charaya- 221099

Pulkit Bharadwaj- 221100

Rahul S Gupta- 221109

DELETE THIS SLIDE AFTERWARDS Select a brand that experienced a crisis

and compare its brand strategy with that of Tylenol.

Read Case of Tylenol from book :Chapter 11 :P:P

Brand Crisis

A negative event which causes a loss of faith, brands reputation, cause to lower sales and loss of customers

Brand crisis management - is the process by which an organization deals with a major event that threatens to harm the organization’s brand equity.

J&J - Tylenol Crisis

Extra strength Tylenol – best selling painkiller in U.S. at that time

Tampering occurred once the product reached the shelves.

37% Market Share – reduced to 7%

Accounted for 17 % of Johnson and Johnson’s net income, making it the company’s bestselling product

October 1982, Seven people died in Chicago after consuming extra-strength Tylenol laced with cyanide.

• People First and Product Second: Immediate product recall - 31 million bottles worth over $100 million dollars.

• Partnered with the FBI, the Chicago Police, and the FDA - Put out a $100,000 reward

• Offered to exchange purchased capsules by the public with solid tablets

• Distributed warnings - hospitals and distributors - halt of Tylenol production and advertising

• Dedicated TV spots to alert public

• Toll free lines to respond to customer queries, for news organizations to receive pre-taped updated statements

• Major press conferences were held at corporate headquarters.

Immediate Action

$300 million Advertising and PR campaign to re-introduce product :

• Triple-seal tamper resistant packaging - a glued box, a plastic sear over the neck of the bottle and a foil seal over the top

• Re launched with a press conference at the manufacturer's headquarters

• First company to comply with the FDA mandate of tamper-resistant packaging

• To motivate consumers to buy - a new pricing program that gave consumers up to 25% off

• Over 2250 sales people deployed - restore confidence of medical community

• A year later, its market share climbed back to 30 %

J&J – Re-Introduction

Cadbury Dairy Milk Crisis

In October 2003, Infestation found in few bars of Cadbury Dairy Milk (fungus layers on chocolate)

FDA Commissioner ordered inspection of stock at company’s Mumbai Plant

Over the following 3-week period, resultant adverse media coverage touched close to 1000 clips in print and 120 on TV news channels.

Effects

Sales volumes came down drastically in the first 10 weeks, which was the festival season

Retailer stock Levels and employee morale dropped

The challenge was to restore confidence in the key stakeholders and build back credibility for the corporate brand through the same channels that had questioned it.

Set up Media Desk At first Media Briefing arranged by the agency, Cadbury’s

Managing Director addressed consumer concerns At second Media Briefing- Project Vishwas was launched Bulk Packaging was reduced from 60 to 22 bars Questionable stocks were replaced immediately Quality control managers, along with over 300 sales people,

completed a thorough check of over 50,000 retail outlets

Strategy Adopted

Phase 1: Presenting Cadbury’s view (Oct-Dec 2003)

Launched ‘purity sealed’ packaging- poly-coated aluminum foil

Spent about Rs 12-15 crore on machinery for the new packaging

Signed up filmstar Amitabh Bachchan as its brand ambassador- helped restore consumers' faith in the quality of the product

Campaign - aimed for both rational and emotional appeal.

Strategy Contd.

Phase 2: Packaging change (Jan- Mar 2004)

Key Learning

Thank You