Product Harm Crises
Product-Harm Crises
Anthony Aiello
Walden University
Abstract
In recent years, much has been written on the subject of product-harm crises. Reactions to product-harm crises have included a wide range of discussion, scholarly study, legal proceedings, protests, and government intervention. In this paper, I discuss the relationship between product-harm crises and the corresponding effect on the company and its brand. In particular, I cite two specific product-harm crises - Johnson & Johnson’s (J&J) Extra Strength Tylenol (1992), and McDonald’s (MD) hot coffee spill case (1994). In each of these cases, the respective profits, customers, and investors were negatively impacted. However, the manner in which each crisis was managed resulted in two different final outcomes. I also discuss the circumstances of each crisis, along with contributing factors, and how they were resolved. An analysis and synthesis of product-harm crises is also is examined, and I conclude with a recommendation for company managers who may find themselves confronted with a product-harm crisis.
Product-harm crises defined
According to Hiscock (2001), the trust which exists between consumers and the brands they select, is the manifestation of a bond between the two. Therefore, the main objective of marketing is to forge a strong bond of trust between the customer and a company’s brand. The end result of a product-harm crisis is oftentimes the breaking of that bond. According to Cooper (1991), company reputations are put to the test during a business crisis. Today, companies find themselves more vulnerable to a crisis than ever before. Yet, management at a majority of companies has been slow to develop formal crises management plans (Fink, 1986).
When a product fails to meet specific regulatory or industry standards of safety, or is defective in such a way as to cause harm or injury buy creating an unreasonable risk, the end result is usually a product-harm
Anthony Aiello
Walden University
Abstract
In recent years, much has been written on the subject of product-harm crises. Reactions to product-harm crises have included a wide range of discussion, scholarly study, legal proceedings, protests, and government intervention. In this paper, I discuss the relationship between product-harm crises and the corresponding effect on the company and its brand. In particular, I cite two specific product-harm crises - Johnson & Johnson’s (J&J) Extra Strength Tylenol (1992), and McDonald’s (MD) hot coffee spill case (1994). In each of these cases, the respective profits, customers, and investors were negatively impacted. However, the manner in which each crisis was managed resulted in two different final outcomes. I also discuss the circumstances of each crisis, along with contributing factors, and how they were resolved. An analysis and synthesis of product-harm crises is also is examined, and I conclude with a recommendation for company managers who may find themselves confronted with a product-harm crisis.
Product-harm crises defined
According to Hiscock (2001), the trust which exists between consumers and the brands they select, is the manifestation of a bond between the two. Therefore, the main objective of marketing is to forge a strong bond of trust between the customer and a company’s brand. The end result of a product-harm crisis is oftentimes the breaking of that bond. According to Cooper (1991), company reputations are put to the test during a business crisis. Today, companies find themselves more vulnerable to a crisis than ever before. Yet, management at a majority of companies has been slow to develop formal crises management plans (Fink, 1986).
When a product fails to meet specific regulatory or industry standards of safety, or is defective in such a way as to cause harm or injury buy creating an unreasonable risk, the end result is usually a product-harm
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