Crisis Management at Bausch & Lomb

Crisis Management at Bausch & Lomb:The ‘ReNu Mositureloc’ Controversy

Sarvesh Gupta (318)Aliasgar Navagharwala (425)

Jai Awatramani (402)

MBA(Tech.), Marketing, Class of 2004-09, NMIMS University

“When written in Chinese the word crisis is composed of two characters. One represents danger and the other represents opportunity.”

-- John F. Kennedy

The Crisis

• Bausch and Lomb

A Product CrisisImpact on the

Brand

The use of IMC by Bausch and

Lomb

Conclusion &

Learning's

Bausch and Lomb

• An eye care company• Started by a German Immigrant John Jacob

Bausch and Henry Lomb• Businesses in – Contact Lenses– Eye Care– Pharmaceuticals– Cataract and Viteroretinal– Refractive Surgery

Bausch and Lomb – The Corporate Brand

• Employs over 14000 people• Products in more than 100 countries• Revenues for 2004 – US$ 2.2 Billion

The Start

2.

1.

3.4.

5.

The Crisis

• June 15, 2005 First reported fusarium case reported in the United States

• November 2005Hong Kong health officials tell Bausch & Lomb about the noted increase in hospital admissions due to contact-lens-related keratitis from June to September 2005.

What keratitis looks like..

• December 2005Bausch & Lomb mentions but downplays the Hong Kong incident to the FDA.

• February 20, 2006 Bausch Lomb voluntarily suspends sales in Singapore, Malaysia, and Hong Kong after 29 cases of fungal keratitis are found in Asia since November 2005.

• March 22, 2006 FDA begins inspection of Bausch & Lomb, Greenville, S.C. plant.

Reigon Revenue Contribution Growth(y-o-y)%

Americas 955.5 43 6

Europe 819.9 37 13

Asia 456.9 20 16

• April 10, 2006Bausch & Lomb stopped shipping product to U.S. stores but said stores could continue to sell existing product until supplies ran out. "There's no indication there is a formula problem here," CEO Zarrella said.

• April 12, 2006Singapore: 36 more cases of fusarium keratitis reported since the last update in late February (then 39 cases). In total, 75 cases of fungal corneal infection with a history of contact lens use have been reported.

• April 12, 2006Bausch & Lomb said that neither the company nor any of the five federal inspectors had found any evidence

• April 15, 2006 The company asks retail stores to take ReNu with MoistureLoc Bausch and Lomb contact lens solution made in the Greenville plant off the shelves temporarily

• April 20, 2006 Bausch Lomb “class action lawsuits” likely in multiple states.

• Law firms such as Hissey Kientz LLP start taking B&L to court

• May 15, 2006 Bausch Lomb is permanently removing its Greenville-made ReNu with MoistureLoc Baush and Lomb contact lens solution from the worldwide market

Key difficulties for B&L

• Product recall turned tricky– Not as “simple as Tylenol Recall”

• No direct Evidence found– Only “high correlation” was found

• Integration of Communication– Retail stores are not selling the product but the

company website still offered the product for sale

The Ultimate Question

• Would B&L allow a $45 million business (eyecare) to destroy a $500 million company?

Effects………………Impacts

• Media• Lawyers• Financial• Online

News channels

• Video

Print Media Affects

Link

Lawyers have a merry time!!!!!

• Video 1• Video 2

Financial Crisis

Online Affects

• http://www.fda.gov/bbs/topics/news/2006/new01371.html

• http://www.monheit.com/ReNu/timeline.asp• http://www.thehindubusinessline.com/

2006/04/14/stories/2006041402360900.htm

Reply by Bausch and Lomb

• A full page Newspaper Ad in USA today• Return of Product offer• Public Relations Campaign• National Advertising Campaign launched in

April 2006

What did the Ad contain…

• Tell the customers to go and visit a doctor to have a eye check up. Video 4

• Also adviced the customers to use other lens soslution as Renu MoistureLoc was temporiorialy been suspended from the market

• Follow guidelines from the American Optmetric Assocaition

We care……

• Video

Effect on India

• Video

Support from AAO (American Academy of Ophthalmology)

• Video

Lawyers come to the rescue

• Video

MessagesMessages

CorporationCorporation

Constituent’sConstituent’sResponseResponse

ConstituenciesConstituencies

Corporate Communication Strategy Framework

Corporate Communication Strategy Framework

MessagesMessages

Constituent’s ResponseConstituent’s ResponseConstituent’s ResponseConstituent’s Response

CorporationCorporation ConstituenciesConstituencies

What does the organization want each constituency to do?

What resources are available?– Money– Human resources– Time

What is the organization’s reputation?

What is the best communication channel?

How should the organization structure the message?

Who are the organization’s constituents?

What their attitude about the organization?

What is their attitude about the topic?

Did each constituency respond in the way the organization wished?

Should the organization revise the message in light of the constituency responses?

Internal Branding/Communication Strategies During a Crisis

• Get on the scene

• Choose your channels carefully

• Stay focused on the business

• Have a plan in place

• Improvise from a strong foundation

Bausch and Lomb Press Releases

• February 20, 2006 Bausch Lomb voluntarily suspends sales in

Singapore, Malaysia, and Hong Kong after 29 cases of fungal keratitis are found in Asia since

November 2005.

• March 22, 2006 FDA begins inspection of Bausch & Lomb,

Greenville, S.C. plant.


March 31, 2006


April 7, 2006


April 10:Bausch & Lomb stopped shipping product to

U.S. stores but said stores could continue to sell existing product until supplies ran out. "There's no indication there is a formula

problem here," CEO Zarrella said.


April 10, 2006


April 10, 2006


April 11, 2006


April 12, 2006Singapore: 36 more cases of fusarium keratitis reported since the last update in late February

(then 39 cases). In total, 75 cases of fungal corneal infection with a history of contact lens

use have been reported.


April 13, 2006


April 20, 2006 Bausch Lomb class action lawsuits likely in

multiple states.


May 15, 2006


May 16, 2006

Bausch and Lomb

Responses

The Result

On May 15, 2006, Bausch & Lomb announced its decision to permanently remove its

MoistureLoc contact lens solution from worldwide markets.

And starts an enquiry in its Greenwile Manufacturing facility

The Learning's

• A Crisis of the Brand• How to manage such a crisis?• The use of Integrated Marketing

Communications.• Changing the Brand positioning

Faulty Product

Public

CritiscmFDA

Media Rage Brand Crisis

Financial

Crisis

Print Media

News

Government

TV Commercial

s

Online

“The easiest period in a crisis situation is actually the battle itself. The most difficult is the period of indecision - whether to fight or run away. And the most dangerous period is the aftermath. It is then, with all his resources spent and his guard down, that an individual must watch out.”

-- Richard Nixon

Crisis Management at Bausch & Lomb

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