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Perhaps one of the most iconic brand images from my childhood is the yellow bottle of Johnson & Johnson (J&J) baby shampoo that is distinctly labeled “No more tears.” Founded in 1886, Johnson & Johnson has a long brand history with a focus on healthcare which started with the production of antiseptic gauze and bandages.
From a consumer perspective, it is often difficult to separate perceptions about a brand which stem from its different product lines. Currently, J&J has a wide and varied product mix that spans consumer health products, medical devices and pharmaceutical products. In recent weeks, J&J has been featured in headlines for its Covid-19 vaccine, developed under the Janssen Pharmaceuticals company but still bearing the brand name. The vaccine distribution is currently paused in the United States as the Centers for Disease Control and Prevention (CDC) investigates symptoms related to the vaccine including blood clots while the rollout has been approved to restart in Europe. But a recent YouGov poll suggests a large drop in the perception of safety of the brand’s vaccine after the rollout was stopped.
With over a 130-year history in an industry sector strongly connected to consumer safety and welfare, J&J offers a unique brand case study. In 1982, J&J’s leadership launched a major recall and offered a reward related to the tampering of Extra-Strength Tylenol. Although this tragic incident seemed isolated to the Chicago area, J&J took a more proactive and wide-scale response to prevent further harm. The consumer-centric response is touted as a commendable strategy that allowed J&J to maintain consumers’ trust and quickly reclaim market share in the analgesic market. J&J faced more scrutiny with a Tylenol recall in 2009 and allegations about its talcum baby powder. However, its commitment to social impact garnered it a top spot in The Wall Street Journal’s ranking of the world’s most sustainably managed companies.
So, what impact does the halt in J&J’s vaccine mean for its brand equity? In their seminal paper in Management Science, economist and strategist Dierickx and Karen Cool (1989) describe an organization’s ability to develop a “stock” of assets which grows from strategic investment “inflows” and is reduced by “outflows” (akin to a bathtub that can be filled and also spring leaks). An example is a company’s “stock” of knowledge and intellectual capital. Over time, this knowledge can become outdated and its value as an asset reduced (“outflow”). However, the intellectual capital can be “refilled” with R&D spending. Taking a similar, although not identical, framework, brand equity is an asset that can be diminished or replenished by a brand’s actions (e.g., advertising) and the actions of other agents including media coverage, consumers’ social media chatter, and tangible consumer market outcomes. While the halt in vaccine rollout is surely an “outflow” from J&J’ stock of brand equity, its involvement in the urgent battle against Covid-19 is an “inflow.”
In the long term, the Johnson & Johnson brand will be most strongly impacted by how closely the organization’s actions, cumulatively, align with its brand credo. The first few lines of the credo are: “We believe our first responsibility is to the patients, doctors and nurses, to mothers and fathers and all others who use our products and services. In meeting their needs, everything we do must be of high quality.” Actions that demonstrate a commitment to these constituents, even in the face of obstacles, are likely to refill J&J stock of brand equity.
