Crisis Management at Bausch & Lomb - The 'ReNu Moistureloc' Controversy

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Case Details:

Case Code : MKTG129
Case Length : 21 Pages
Period : 2005-2006
Organization : - Bausch and Lomb
Pub Date : 2006
Teaching Note : Available
Countries : USA, Asia
Industry : Eye Care

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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B&L in Damage Control Mode

When retailers started pulling ReNu MoistureLoc off their shelves, B&L started a public relations blitz in a bid to limit the damage caused to its reputation. It sent out a clear message asking all retailers to stop selling ReNu MoistureLoc until the truth had been established. The company published newspaper ads in USA Today and some regional newspapers which had an open letter to consumers from Zarella. In the letter, Zarella said that the company was voluntarily withdrawing the product in the interests of the public. He also apologized for any "inconvenience or anxiety" caused due to this incident.

B&L announced that consumers who wished to return their ReNu MoistureLoc could visit its website www.bausch.com or call a toll free number to receive a coupon for another B&L eye care product or to receive their money back. It offered a coupon for up to US$8 toward the purchase of its other contact lens solutions.

Did B&L Give Itself A Poke In The Eye?

Many analysts believed that B&L had adopted a "self-destructively passive role" in dealing with customers and investors and had thus broken the basic rule in crisis management. Analysts criticized B&L for remaining silent even after it had learnt about the health problems associated with the product after they surfaced in Asia as early as November 2005. Glenn MacDonald, Professor at John M. Olin School of Business, Washington University, said: “When you have a problem like this, you should deal with it immediately.

Future Outlook

Analysts expected that ReNu MoistureLoc was unlikely to return to the US market in 2006. Maris expected B&L's remaining lens care business to witness at least a 10% market share contraction in 2006. Analysts also felt that even if the product were to be cleared soon, it would be difficult to regain the lost market share quickly. The fallout could also erode the company's brand equity not only in lens care, but also in the contact lens business itself.

Exhibit

Exhibit I: Some Key Sub-brands of B&L
Exhibit II: Lens Care Products of B&L
Exhibit III: Logo of B&L
Exhibit IV: Key Financial Data of B&L
Exhibit V: Brief Note on ReNu Moistureloc
Exhibit VI: ReNu Moistureloc Pack Shot
Exhibit VII: Bausch & Lomb Collaborates with Experts to Investigate Extent and Cause of Fungal Eye Infections
Exhibit VIII: FDA Press Releases on Keratitis Associated with Soft Contact Lens Use and Contact Lens Solution
Exhibit IX: FDA Press Release Supporting B&L's Decision
Exhibit X: Share Prices of B&L (March 31, 2006 to April 17, 2006)


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