The brand value of Johnson & Johnson is falling due to product recalls, product unavailability and other problems. The December, 2010 recall of Rolaids is more than a new cause for heartburn at Johnson & Johnson. Coming on the heels of a year of unprecedented recalls, this latest problem is having a major impact on brand value. Beginning with the January 15th recall of Tylenol and expanding through the Spring and Summer with recalls of such consumer icons as Motrin, Benadryl, St. Joseph’s Aspirin, Mylanta, DePuy hip replacements, and prescription drugs like Epogen and Procrit, the Johnson & Johnson brand has suffered from a pattern of manufacturing and quality control failures.
Loss of More Than 27% of Brand Value
Grant Thornton’s September 10, 2010 report on declining brand value calculates that the Johnson & Johnson brand lost 27% of its value. And this analysis was done before some of the major recalls of the summer and fall. Moreover, the damage to the recalled product brands themselves has to be much, much greater. And possibly permanent. Consumers are being forced to switch to competitive brands and generic replacements. Convincing them to come back to Johnson & Johnson brands will be no small feat. That the company has been dragged before Congress and is the subject of an ongoing Department of Justice criminal probe does not help.
Johnson & Johnson Can’t Yet Take the First Step to Brand Repair
Restoring share of market and brand reputation will take plenty of money and even more time. Of course nothing can be done until the first step in brand repair can be taken, and that is: fix the problem–something that month after month of recalls, plant shutdowns and management shakeups haven’t been able to address. That the recalls are so broad-based across so many divisions in so many countries, and that they seem to just keep coming, does not bode well for the Johnson & Johnson brand that so long has stood for trust.
A side note: Johnson & Johnson and its brands do not have either a Twitter or Facebook presence. As we have covered here and here, companies can’t wait until they are in a crisis to try and make effective use of social media.
UPDATE: The company has posted a 12 percent decline in profit and a 5.5 percent decline in sales for the fourth quarter 2010.