KICK’N GO: A PRODUCT MANAGEMENT AND SOCIAL RESPONSIBILITY DILEMMA New Horizons in Simulation Games and Experiential Learning, Volume 4, 1977 361 KICK’N GO: A PRODUCT MANAGEMENT AND SOCIAL RESPONSIBILITY DILEMMA Arch G. Woodside, University of South Carolina Louis E. Boone, University of Tulsa Product recall and modification decisions are serious concerns for many commercial and noncommercial enterprises, e.g., automobile firms, pharmaceutical houses, and food processors. Such firms are faced with the dilemma of the desire to sustain monetary profits versus the need to act socially responsible. Difficult choices usually must he made within a short time span which have long-run impact on stock-holder equity, public and customer satisfaction, and government actions. The Kick’N Go exercise involves five players acting as members of the Honda Corporation of Japan. The players are faced with three decisions with four to five alternatives per decision. Each student is given a role to play in the decision process. The case is based upon an actual product which was related to the deaths of two children in the United States in 1976 [1]. The product is Kick’N Go a new kick-powered rear-wheel scooter manufactured and marketed by Honda. The accusation was made that Honda had placed a dangerous toy in the hands of children. The description of the five roles played are fictitious. OBJECTIVE S The Kick’N Go experiential exercise is designed to provide students with a behavioral learning experience to (1) increase their perceptions of the ramifications of the decision alternatives in a product management and social responsibility dilemma; (2) learn to resolve conflicts in such dilemmas; and (3) act less socially irresponsible. ADMINISTRATION No advance preparation is required of the participants. The attached description of the marketing program for Kick’N Go and the events that led to the present situation may be distributed to the participants prior to the exercise or it can be read by all participants at the beginning of the period. Once the description of the Kick’N Go situation has been read, the participants are informed that they will each re- New Horizons in Simulation Games and Experiential Learning, Volume 4, 1977 362 ceive a role in the Honda organization and that each should assume the identity of the role described. The participants are then divided into groups of five and each received a role. Each group is then instructed to discuss the situation and complete the attached “Honda Kick’n Go Decision” form (one form for each group) within a specified time period (usually 30 to 45 minutes). Once the Decision Form is completed, discussion follows along the topics suggested in the attached Instructor’s Notes. The students are led into a discussion of choices made and social responsibility and irresponsibility. Copies of the Nason and Armstrong article [2] on this subject are given to the student participants and discussed. THE KICK’N GO EXERCISE In the spring of 1976 two children were killed when riding their new kick-powered rear- wheel scooter, Kick’n Go by Honda. Honda executives immediately stopped all television advertising for the product; and a few days later, all production of Kick’n Go was also stopped. The accusation was made that Honda had placed a dangerous toy in the hands of children. The Product Kick’n Go is a unique scooter with a kick-powered gear in the rear wheel. The product is called Roller-Through Go-Go in Japan and Kick’n Go in the United States. The product was developed in Akuto, a subsidiary of Honda based upon Honda’s company wide “idea contest.” The main purpose of the “idea contest” is to improve morale among Honda employees. Akuto is responsible for creating actual models of design winners. Test Market Honda decided to test the product in March, 1974. A total of 2,000 Roller-Through Go- Go’s were placed in a few Tokyo department stores. All 2,000 were sold in less than a week. Full-scale production and marketing of the product were decided based on these test results. Other reasons prompted Honda executives to decide on full-scale marketing of the scooter. Honda’s total sales had New Horizons in Simulation Games and Experiential Learning, Volume 4, 1977 363 declined in Japan in 1973/1974. This decline had particularly affected Honda’s sub-contractors. The product provided a means of keeping plant production close to full capacity. The product also was believed to he a way to have children learn about Honda and develop a favorable attitude to Honda products at an early age; thus, increase the likelihood of the children purchasing Honda cars and motorcycles in adult life. Advertising Plan In Japan, Honda spent $1,000,000 in one year on Roller- Through Go-Go with close to 90% of these funds spent on television commercials. One of the commercials featured a small boy accompanied by his jogging dad while the boy rode the scooter. The boy tired from the workout rides on his father’s back for the trip home. The father carries the scooter on the trip home. Dentsur Advertising was the agency handling the scooter account. The main narration of the television commercial in 1975 was: “Dad, are you going to have a good time with the kids today?” Product Demand During the advertising campaign over 1,000,000 Roller- Through Go-Go’s were sold in Japan at close to S30 each. At the same time 200,000 were sold in the United States. Mr. Sho Shinmi, sales promotion manager of foreign sales offered five reasons perceived that caused the rapid adoption of the product: 1. The product is a challenge to children since its somewhat difficult to steer. Children need to practice to control the scooter well. 2. Children like the mechanical feature of the gear chain and it’s educational. 3. The use of the product is healthy. 4. Use of the product is a way of making friends. 5. The product’s price is reasonable. Present Situation In 1976, Honda was preparing for a major marketing launch of a larger more powerful model of the scooter. In the United States the new model would be called Kick’n Go VII. Some New Horizons in Simulation Games and Experiential Learning, Volume 4, 1977 364 Honda executives were discussing the idea of developing an adult version of the scooter. Then, the two children were killed riding their Roller-Through Go-Go’s. The product was always shown in use in safe areas, e.g., parks, and never on streets in the advertising campaign. However, parks and playgrounds with enough space for using the scooter are just not available enough in larger cities in Japan and the United States. Questions Choose one of the alternatives for each of the three decisions on the attached Decision Form. Consider the following four questions. 1. Should Honda’s management decide to continue to produce the scooter? Should marketing the product be limited to Japan? 2. Should the advertising program for the scooter be started again? Should advertising expenditures he expanded? 3. Should Kick’n Go VII he marketed? 4. What changes should he made to the production and marketing programs of the kick- powered scooter? Develop your own marketing program for this product for Honda if you believe the product should be continued. ROLES OF PLAYERS FOR KICK’N GO Honda - Chairman-of-the-Board (Mr. Mo Yuko) You have a responsibility to the stockholders of the Honda Corporation. The Kick’n Go has provided a substantial return on investment and average net profit is currently $5.00 per unit. (Average net profit of the higher priced Kick’n Go VII is $7.00.) Down deep, you believe the product should be marketed with the public being given an educational program on its safe use. However, you are concerned about a possible backlash reducing motorcycle and car sales if more deaths are associated with the scooters. You believe the Honda Corporation is a socially responsible firm. Initially you are uncertain what to do about the scooter. Honda - President (Mr. Liro Shumato) You have long recognized the need for Honda to be a socially responsible firm. You believe that Honda may have moved too fast in marketing Kick’n Go. New Horizons in Simulation Games and Experiential Learning, Volume 4, 1977 365 You are next-in-line to be Chairman-of-the-Board at Honda. You have the most to lose from a wrong decision at the meeting today. Profit growth is an important measure of your success. The Customer Service Manager has sent a letter to you threatening to release information to the press on the product’s dangers if it is not recalled. Honda Vice-President-Marketing (Mr. Lott Tohi) You are excited about the success of Honda’s Kick’n Go. You feel personally responsible for successfully marketing the product in the United States. You feel that if production must he limited or stopped, this decision should not include the U. S. market. Kick’n Go VII is your baby! Honda - Head Engineer (Mr. Mohi Shinomhiti) You feel that you need time for your staff to perfect the Kick’n Go scooter. Your position is that Kick’n Go VII needs two years of further research and development. You have felt that the scooter may require too much skill for children to operate. You have lost a few nights sleep from your concern about the product. Honda - Customer Service Manager (Mr. Arki Tillihoto) At present, you do see the possibility of serious negative public reactions if more deaths are linked to the scooters. You feel that marketing these scooters is a mistake. You have threatened to release a letter pointing out the product’s dangers to the press if the Chairman-of-the-Board does not recall the product. The President of Honda has a copy of your letter. You don’t want to jeopardize your job hut the social responsibility of marketing the product is a real concern for you. New Horizons in Simulation Games and Experiential Learning, Volume 4, 1977 366 LETTER FROM CUSTOMER SERVICE MANAGER IN KICK’N GO EXERCISE October 2, 1976 Mr. Mo Yuko Chairman of the Board The Honda Corporation Ginza Blvd. Tokyo, Japan Dear Mr. Yuko: The development of the Kick’N Go scooter and its subsequent association with the deaths of the two children have seriously tarnished the fine reputation of our distinguished firm as a social responsible Japanese corporate citizen. It is my belief that the strong negative reaction on the part of the general public is warranted. While the product has been shown to be safe as well as a means of exercising body muscles in more mature children aged twelve or more, our consumer profile clearly shows that its primary appeal is to children aged ten or less. Indeed, our major age segment appears to be eight-year- olds. Mr. Chairman, young children simply do not possess the necessary strength, coordination, nor the judgment to control their Kick’N Go’s on the sidewalks and in parks. Inevitably, they will use the scooter in their neighborhood streets and inevitably --more children will die. In short, we have seriously erred in marketing this product and it must be halted now. My career in industry, indeed my whole life, has centered around the Honda Corporation. I love my firm and would never knowingly harm its reputation. Yet sometimes men must be held accountable by higher authority. And unless Kick’N Go is recalled, I shall be compelled to voice my grave concerns by releasing this letter to the news media. Respectfully, Arki Tillihoto Customer Service Manager AT:jkh New Horizons in Simulation Games and Experiential Learning, Volume 4, 1977 367 New Horizons in Simulation Games and Experiential Learning, Volume 4, 1977 368 INSTRUCTOR’S NOTES ON KICK’N GO Many different topics should be covered in class discussions of Kick’n Go including the possible information processing stages used in the buying center in deciding to purchase and use the product, effects of the advertising program, consumerism and government regulation issues. Basic Issue Should marketing of the kick powered scooter be discontinued because of the recent killings of two children? If not, what changes to the marketing program should be made based on the deaths, if any? Some enterprising students may present figures on accidents per 1,000 bike and tricycle riders to support the continuation of marketing the scooter. Inevitably, children ride their Kick’n Go’s on the streets. Honda’s final decision was to continue advertising, but to stress heavily that Kick’n Co must be used in safe car-free areas and to limit production and distribution. Information Processing What are the stages in processing information and making the decision to purchase Kick’n Go? Is Mr. Shinmi correct in his perception of the reasons for the rapid adoption of the product? What other reasons are likely to affect purchase? Besides class discussion of these questions, the market segmentation of the family which would own a Kick’n Go could be developed. Buyer attributes could be incorporated in the information processing stages in the development of a decision diagram of acceptance! rejection of the product. Family income would be one buyer attribute variable affecting purchase of the product. Influence of peers may be one stage in information processing. REFERENCES 1. Link, Luther, “Honda’s Non-Research Kick’N Co Goes Over Big,” Advertising Age, Vol. 47, No. 20, (May 17, 1976), p. 37. 2. Nason, Robert W. and J. Scott Armstrong, “Role Conflict: Society’s Dilemma with Excellence in Marketing,” Wharton Quarterly (Fall 1972), pp. 13-16. Table of Contents Volume 4, 1977 Double Play for Gaming Effectiveness Adaptive Rule Changes in Computer Simulation Gaming Œ A Means of Pedagogical Reactive Interchange Monte Carlo Simulation in Personnel Management Training Teaching About the Implementation of Job Redesign Using Simulation and Group Discussions An Interactive Simulation of Private Sector Collective Bargaining Leadership Evaluation and training through Behavioral Simulations: Method, Results and Future An assessment of the Effect of Experiential, Simulation and Discussion Pedagologies Used in Laboratory Sections of an Introductory Management Course An Experiential Understanding of the Trust Dimension Using Consulting Cases to teach Business Policy An Experimental Testing of Teaching Methodologies in Marketing Interpersonal Skill Development: The Experiential Training Unit (ETU) and Transfer of Training An Analysis of the Relationship between Personality characteristics and Preferred Styles of Learning Analysis of Effective Communication Skill Development in Graduate Business and Engineering Experiential Education Changing Perceptions of Learning in a Simulated Environment Student Perceptions: Simulation and the Corporate Policy Course Degree of Uniformity in Achievement Motivation Levels of Team Member: Its Effect on Team Performance in a Simulation Game Channel Conflict, Cooperation and Control: an Experiential Learning Exercise Differences in Experiential and Non-Experiential Learners' Reactions to Conflict between Individual and Organizations Behavior The Evolution and Evaluation of a Required, Senior-Level Course in Experiential Business Applications Building Management Skills through Problem Solving A Live-Case Approach to the Business and Society Course Experiential Learning: Toward the Development of a Theoretical Base and the Identification of Variables and the Hypotheses to Guide Research The Role of the Administrator in Experiential Learning and Simulations Some Thoughts on a Theory of the Use of Games and Experiential Exercises Three Applications of the Management of Learning Grid An Analysis of ABSEL: Its Past Achievements and Future Prospects New Horizons in Simulation Research Prediction of Academic Achievement in a Simulation Mode via Personality Constructs Sex Differences in a Bargaining Simulation COM-GAME: A Commodity Trading Game for Use in an Introductory Business Statistics Course A Financial Institution Management Game with Direct Participant Interactions A Non-Computerized Marketing Planning and Strategy Game Delphi in the Classroom: A Demonstration of Forecasting Economic Activity The Potential of Programmable Calculators for Processing Small Business Simulations Can a Small Predominantly Clack University Incorporate the Computer Simulation Gaming Teaching Methodology into it Curriculum Measuring the Effect of an Experiential Exercise Experiential Learning - Analysis of a Partial Success Predicting Participants' Performance and Reactions in an Experiential Learning Setting: An Empirical Investigation A Simplified, Non-Computerized Marketing Channels Game Manufacturers and Retailers: A Negotiation Game for Beginning Management Students Petroleum Management Game A Securities Dealer Simulator SIM ECO SOC with Business Curriculum Modules: A Simulation for Business Ethics and Morals The Picnic: A Perceptual Errors Exercise Salt III; an Experiential Exercise to Highlight the Interpersonal Dynamics Involved in the Negotiation Process Experiential Exercise on Values, Attitudes and Conflict Resolution in Organizational Behavior Kick'N Go: A Product Management and Social Responsibility Dilemma The Use of Self-Assessment Work-shops in a school of Business Administration The Dilemma of Self-Perception