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 company’s success was smart marketing
and a unique market entry strategy. To increase the drink’s profile in Europe and to emphasize
Kickstart’s benefits to athletes, each country’s 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.
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 wouldn’t 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.
Case Study Questions
1. As described in the case study, a sudden change in regulations can have costly effects on an
exporter. What steps could Kickstart have taken before and after its products were removed
from shelves to decrease its risk or avoid it altogether?
2. Kickstart doesn’t follow a traditional sales and marketing model. It brings the consumer to the
product through “buzz marketing” achieved by hosting extreme sporting events and
sponsoring athletes. Why does this strategy work so well for the company?
3. 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?
Kickstart, the renowned energy drink brand, has achieved remarkable international success since its inception in 1993. This case study highlights the company’s journey from a chance discovery in Southeast Asia to becoming a thriving global business. We will delve into the challenges Kickstart faced due to changing regulations, the effectiveness of its unique marketing strategy, and the advantages of standardizing its product for international markets.
As demonstrated by the situation in Qatar, sudden changes in regulations can have detrimental effects on international exporters like Kickstart. To decrease the risk or avoid it altogether, the company could have taken several proactive steps:
a. Market Research: Before entering a new market, thorough market research is essential. Kickstart should have studied the local regulations and policies governing energy drinks to ensure compliance. This would include understanding labeling requirements, ingredient restrictions, and any bans or limitations on certain ingredients.
b. Local Partnerships: Collaborating with local partners who have a deep understanding of the regulatory landscape can be invaluable. These partners can provide guidance on navigating regulatory hurdles and help with advocacy efforts if necessary.
c. Diversification: Relying solely on one market can be risky. Kickstart could have diversified its international presence to minimize the impact of regulatory changes in a single market.
d. Adaptation: If faced with regulatory challenges, Kickstart should be prepared to adapt its product to meet local requirements. This might involve reformulating the drink or altering its branding and packaging.
e. Government Relations: Building positive relationships with local government authorities can help in lobbying for favorable regulations and ensuring the company’s voice is heard during policy changes.
Kickstart’s unconventional marketing strategy, centered around extreme sporting events and athlete sponsorships, has been a key driver of its success. This approach works for several reasons:
a. Engagement: Extreme sports and athletes capture the attention and interest of a wide audience. People are naturally drawn to the excitement and adrenaline associated with these events, making it easier for Kickstart to engage potential consumers.
b. Brand Image: Associating with extreme sports and athletes creates a dynamic and adventurous brand image. This image resonates with the target demographic of active and energetic individuals, aligning with the product’s purpose.
c. Word-of-Mouth Marketing: Attendees of these events and athletes who receive sponsorships become brand ambassadors. They share their positive experiences with Kickstart, leading to organic word-of-mouth marketing and a loyal customer base.
d. Memorability: Extreme sporting events create memorable experiences, and people tend to associate those memories with the brand that made it possible. This leads to long-term brand recall and loyalty.
Kickstart’s strategy of marketing and exporting a standardized domestic product with customized packaging offers several advantages:
a. Consistency: Standardization ensures that customers worldwide receive the same high-quality product they expect. This consistency builds trust and brand loyalty.
b. Cost Efficiency: Manufacturing a single product formula reduces production and operational costs compared to adapting the product for each market. It streamlines the supply chain and simplifies quality control.
c. Global Brand Recognition: A standardized product with recognizable branding fosters global brand recognition. Customers can easily identify Kickstart, regardless of where they are in the world.
d. Scale: Standardization allows Kickstart to leverage economies of scale in production, resulting in lower costs per unit and increased profitability.
Kickstart’s journey from a chance discovery to a global energy drink brand is a testament to effective market entry strategies, adaptability in the face of regulatory challenges, and a unique approach to marketing. By taking proactive measures to understand and navigate regulatory landscapes, capitalizing on buzz marketing through extreme sports and athlete sponsorships, and maintaining a standardized product with customized packaging, Kickstart has become a thriving international business, serving customers in 87 countries and enjoying substantial revenues. In an ever-evolving global market, these strategies have proven to be a recipe for success.
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