This is the case study and question at the end of case study, Please answer.

Question 1. What are some of the advantages Kickstart reaps from marketing and exporting a standard domestic version of its product to all markets internationally, customizing only the outer package?

Case study to find the answer.

An International Boost

When Swiss business person Alexandra Hoffman travelled to southeast Asia in 1991, she discovered at a small street vendor a drink that gave her a surprising boost of energy for the next few hours. It also made her feel more alert and focused than she usually did at that time of day, and she really enjoyed the taste. During her trip, she returned to the vendor a few more times and bought several cans of the drink to bring home with her to Switzerland.

Upon her return, Alexandra asked friends to try the Asian beverage, and they had the same reaction. They enjoyed the boost it gave them and agreed it would be helpful to get through the midday slump most working adults experience, or perhaps boost their performance for sporting leagues or other commitments in the evenings. Following her instincts, Alexandra had the contents of her last can analyzed and began to develop a similar beverage that would appeal to the Swiss market.

Since the launch of Kickstart in 1993, the company has gone on to sell over ten billion cans worldwide. After a successful launch in Switzerland, Kickstart entered other European markets, and the drink become wildly popular. The key to the companys success was smart marketing and a unique market entry strategy. To increase the drinks profile in Europe and to emphasize Kickstarts benefits to athletes, each countrys launch was tied to a sporting event, hosted by the energy drink company. The events always involved extreme sports such as car-racing, motocross games and air races. As these events grew in popularity, the Kickstart marketing team began to create sponsorships for amateur athletes; through these sponsorships, the momentum for both the energy drink and the events increased until sales across Europe had skyrocketed.

Following the European rollout, Alexandra and her business development team decided it was time to expand to North America, using the same model of hosting and sponsoring extreme sporting events and athletes. The energy drink had even greater success in the United States. What started as a curious experiment following a short business trip turned into a thriving international business. In the years since its inception, the company has expanded into 87 countries, and now employs 4,300 people and has estimated revenues in the billions.

Vitally Important

Marketing and sales are critical facets of an international expansion, but products wont reach the shelves without accurate labelling and packaging that abide by the regulations of the destination country. Many international companies approach this issue in one of two ways: they either take their standardized domestic product and create customized packaging as needed for each market or they completely customize the product for the target market, including design, labelling and packaging. Kickstart followed a unique path by doing both.

In many target markets, it first launched a locally customized version of the drink, which followed the countrys import regulations with regard to labelling and packaging, as well as the cultural preferences of its people with regard to design. As the international branding of the energy drink became more widely known, Kickstart also began selling its standardized version of the drink in international markets, with the original branding that was so familiar in Europe. The company was doing extremely well with this strategy and, therefore, in every target market it had the option to either fully customize a product, offer its standard international product, or both, depending on the specific regulations and cultural preferences.

This strategy was of benefit to the company for other reasons, most notably because a number of countries were hesitant to allow energy drinks to be sold within their borders. Countries around the world have differing regulations on food and beverage products, and Kickstart includes a few naturally sourced ingredients that are either restricted or under review in some regions. This affects the labelling and packaging requirements for export to individual markets. In Canada, for example, the ingredients must be listed on the outside of the can and the can must be labelled in both English and French. In other countries, the content of specific additives or chemicals must be explicitly written on the outside of the individual packaging. Kickstart employs an entire division dedicated to researching and visiting different target markets in order to remain abreast of regulations and ensure the product is designed, labelled, packaged and shipped accurately to avoid unnecessary costs.

Negative Consequences

One of the more strictly regulated countries where Kickstart is sold is Qatar. Its import regulations on energy drinks require a warning be printed in red font on each can, stating the beverage is not permitted to be consumed by children or pregnant women, among others. Kickstart entered Qatar in 2002 and has hosted many highly successful extreme events there, including Desert Drag Racing.

Without notice, one day in 2015 all Kickstart products were removed from Qatari shelves. Customers went to social media to question the absence of their favourite energy drink and speculate on the reasons behind it. Kickstart representatives were quick to respond to comments and assured customers the product would soon return. What had happened?

The Supreme Council of Health in Qatar had suddenly revised regulations for the labelling of energy drinks in response to concerns regarding their health effects. The sudden change required Kickstart to pull its product from the shelves, arrange to have the supply shipped to a manufacturing location and redesign new cans to ship back to businesses in Qatar. Although the company addressed the questions quickly and remedied the situation, the sudden absence of the drink caused some negative press. In addition, while the product was absent, Kickstarts loyal customers may have tried competitors offerings and perhaps continued to purchase them even when Kickstart had been restocked.

Although Kickstart has vast resources, and a situation like what occurred in Qatar wouldnt leave it bankrupt, it actively competes with other popular premium brands of energy drinks that also sell extremely well on the international market. Loss of market share, for whatever reason, can be very costly, both financially and in terms of the reputation of an international brand. Kickstart is well aware of these costs and is taking steps to prevent similar situations in future.

Learning Outcomes

This case study relates to the following learning outcomes from the module Product Development in the course Products and Services for a Global Market:

Describe international trade considerations and their implications when developing or adapting products for international trade, including market entry strategies, product life cycle and market research regarding the product.

Explain product standardization, and phases of new product concept development or adaptation for new international markets, considering purpose and opportunities

Ensure regulatory compliance of products in each international market, considering regulations and policies of each market as well as global agreements and guidelines when developing or adapting products.

Question 1. What are some of the advantages Kickstart reaps from marketing and exporting a standard domestic version of its product to all markets internationally, customizing only the outer package?