Wednesday, December 07, 2005

Less DTC, Better Public Image?

A lot of attention is being paid these days to pharma's tarnished public image. The prominence of direct-to-consumer (DTC) advertising has been linked to the deterioration of this image and some pharma companies have responded by cutting back on branded DTC. But none have advocated an immediate and complete withdrawal.

The discussion regarding J&J by several members of the online
PHARMA-MKTING discussion group shed further light on the relationship between DTC and pharma's image crisis. Members responded to yesterday's post to this blog ("J&J Scores High in Reputation Quotient Study") and helped me answer the question I posed: Why Did J&J Score High in Reputation Quotient Study?

David Hoo, a former employee of J&J and a current member of the
Pharma Marketing Roundtable, listed a few credible reasons:
Having worked for J&J over 10 years and through the Tylenol cyanide crises, much of J&J's goodwill comes from how that very crisis and other public issues have been handled and have become peerless text book case studies of responsible corporate behavior.

For anyone too young to be familiar, for public safety J&J recalled and destroy every package of Tylenol after the Chicago tampering and then relaunched Tylenol in completely new tamper evident packaging, all at J&J's expense at 100's of millions with absolutely no hesitation whatsoever. I don't believe any company in any industry any where in the world has exemplified any thing close to this ever.

There are a number of other reasons why J&J has such a good public image, all of which I believe are by intentional design.

First, it is best known by consumers for its baby business and bandage business. Its
hard not to love and be fond of babies and first aid.

Second, J&J is both a highly diversified and highly decentralized business.

Pharmaceuticals do not represent the majority of its business. Also pharmaceuticals are marketed not only under specific brand names, but also from different operating companies which do not have the J&J name prominently promoted.

Pharmaceuticals are primarily promoted to professionals. J&J has not been that heavy of a DTC advertiser compared to other pharma companies. So if there are consumer issues/controversy, the J&J name is not directly associated.

J&J has very high standards of how it promotes its products. For example, it never capitalizes on another company's/product's misfortunes.

But in the end, how J&J handled the Tylenol crisis and its Credo of operating principles

NOTE: C Nguyen, another PHARMA-MKTING discussion participant, said: "J&J stayed with their credo and how many pharmaceutical [companies out there] follow [a similar] credo?"

However, consistency in handling other issues plus high standards for quality products, marketing and promotion and endless steady growth may also contribute as much to such a burnished and untarnished image. that easily guided through this crisis is the major reason I believe for its tremendous public image.
J&J's handling of the Tylenol tampering incident is the "gold standard" of crisis management, the main ingredient of which was transparency. J&J's CEO was the main spokeperson, made all the facts known and was available to the press throughout the crisis. Pharma companies should use the same crisis management tactic -- i.e., transparency -- to handle its current image crisis.

Unfortunately, the gold standard today is to circle the wagons and hide behind corporate communications departments and lawyers. Even J&J -- the original standard bearer -- may not have been so transparent in managing its recent crises.

Back in June, 2005, J&J faced some criticism over its continued promotion of Propulsid for use in children after serious safety issues were raised by the FDA (see "
Say it isn't so, J&J!"). It only pulled Propulsid from the market two years after the fact. According to a New York Times story:
"Two years later, as reports of heart injuries and deaths mounted, Johnson & Johnson continued defending the safety of Propulsid, but then pulled it from the market before a government hearing threatened to draw attention to the drug's long, largely hidden, record of trouble."
Even more troubling was that J&J "declined repeated requests to make executives available to be interviewed" for the article. Unfortunately, these days, such reluctance of corporate executives to be forthright and open with the public is a typical pharmaceutical company response to handling crises. CEO's are too busy preparing for the next investor conference call.

This, I believe, is contrary to the J&J credo, mentioned above, which pledges to put "customers first, stockholders last" (see "
Our Credo Explained"). But, I digress.

J&J's Marketing Savvy

More than its handling of the Tylenol incident, J&J's good reputation may be tied to its unique product portfolio, marketing savvy, and corporate structure. As Hoo suggested, J&J may do very little DTC advertising for its pharmaceuticals and devices compared to other pharma companies, but a whole lot of baby product advertising. The result is that J&J has tied its corporate image to the baby image.

Tom Baker, a member of PHARMA-MKTING, had this to say about that:

My company consults to several of the JNJ operating companies on pharma/biotech strategy issues. When my wife and I had our first baby, they sent us a baby kit -- shampoo, wipes, etc. -- full of JNJ products. That is why they rank so high: I know they make drugs, I work on those drugs, yet I will always think of the baby kit first. That's genius marketing.
Less DTC = Better Public Image?
Hoo also mentioned that J&J focuses less on DTC advertising than do most pharma companies and when it does, it is under different operating company names and the J&J name does not figure prominently in the commercials. If this has helped J&J maintain its reputation, then it should indeed continue to "keep quiet about pharmaceuticals" at least in front of consumers.

It's a good argument for getting rid of DTC. Imagine that, if you can!

Imagine there's no DTC

It's easy if you try

No hell to catch from FDA and Congress

Only uninterrupted CSI

Imagine all the TV viewers

Not turning their eyes away

Imagine there's no me-too drugs

It isn't hard to do

Nothing to compete for

And no off-label usage too

Imagine all the people

Living life in safety

You may say that I'm a dreamer

But I'm not the only one

I hope someday we'’ll all join Frist, Grassley, Kennedy, and Waxman

And the world will be as one

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