• Sun. Feb 28th, 2021

1 Marketing Strategy: Johnson & Johnson Credo, Tylenol, and Ford Pinto – part 1

all right today we're gonna talk about marketing last class we talked about green marketing and green programs we talked about issues as it relates to social responsibility and ethics what are the two major case studies that we examined as relates to ethical decision-making and social responsibility right exactly so we looked at the decision-making process of the company that manufactured the cars that would explode when it was rear-ended and the course benefit analysis that they did and how tylenol took a very different approach to dealing with the tampering of their product in 1982 when they discovered that their Talon or capsules were laced with cyanide and the Corvair company they decided instead of recalling the cars they decided that it would be cheaper to pay the death claims and we talked about whether or not that's ethical or not and the implications of their decision and contrasted that with the way tylenol handled a crisis in their organization very different approaches the Johnson & Johnson company before they even knew what was going on or I should say before they even knew whether or not they were responsible for what had transpired they agree to recall the product at a substantial cost to the company so it wasn't for that but wasn't a question of whether it was legal or illegal to net was a question of their social responsibility to their stakeholders well that's yeah that's one of the issues that come out of this type of discussion is profit the impact on profit and so what do you think about that does that in terms of how we judge them should we because let's say they didn't have the money right that paying the pain for the recall would have bankrupt the company does that mean it's okay that they not recall the company owe the product so only companies that can afford to conduct a recall on defective products should be required to do so but if you can't afford to recall your product then you shouldn't be required to well that's why I was trying to help us think through is is that something that we should consider the financial component either it's right or it's wrong what you know why what does money have to do with the decision like for tylenol for them it wasn't about the money they didn't even know if they were legally responsible for what happened the car company at the point that they were making the decision they knew that they manufactured a car that was defective and when the car was rear-ended the car would explode and the people in the car would get killed and yet they still decided that they would pay death claims instead of recalling the car even though they knew that it was it was therefore the Johnson and Johnson they recalled the product it was a significant cost for them but they did it because they believed that that was the right thing to do at any cost well time to time again we come back to the course component that always seems to creep into the discussion when we think about making decisions and trying to decide what's the right decision somehow it seems that we fall into the trap of and as good business people the cost of the decision versus what is the ethical thing to do what is our what is the responsible thing to do whether it's legal or not or whether it's illegal or not because as we discussed yesterday for some executives that doesn't seem to be much of a deterrent either right forget about while we sit here thinking about is it ethical is it unethical so they have a social responsibility we're assuming when we talk about that that that the issue is already been determined to be legal but yes we saw there's quite a few decisions that have been exposed over the last six months over the last year made by executives that were clearly illegal but that didn't stop them from doing it that's a good question why why didn't they why did they do it doing the writing which is gonna cost you an arm only yes yeah that's why I'm trying to like because the light is easier to say it's easier for arches sitting here inside this is the wrong things we need to do now you shouldn't do that a chimp or a 5-pack on someone's wife but you know on the other hand he has to be responsibility is about the light himself on the company and even what maybe he lose his job then next thing you know is he might run in to know when I so difficulty should support his family all these kind of thanks so Wanda here based on one musician and I don't know I feel bad for the guy who got stuck in the situations like that but so do you feel bad for these car manufacturers right in this case these it's not bad luck they designed engineered and manufactured a car that would explode on impact why should we why should we feel bad for them it's not like they were at the scene the wrong place at the wrong time that they were negligent right they maybe they even designed it that way because they thought it would save them cost in the manufacturing process which is different from how tylenol dealt with the situation is sure they knew that there was a financial component but they said we're not going to be driven by the financial impact is that we have an obligation we have an obligation to the community in which we operate our business to our customers to doctors to nurses and yes they said we have an obligation to our shareholders which when we talk about shareholder responsibility specifically they're talking about the responsibility in the company to generate profit and they say we recognize that but they said the responsibility to generate profit for the owners of the company is less than the responsibility then we have that we have to our customers who are dying because our product is painted with cyanide but admittedly it's it's a complex decision-making process this certainly there's lots of implications why do executives do the things that they do now is because they're motivated by short term rewards which in most cases that has to do with stock price on Wall Street so they're not thinking what are the implications five years out for the company or ten years out they're just thinking about what impact it's going to have this quarter to their quarterly financials like think about for example mercedes-benz mercedes-benz invested

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