rogers gillett kodak case presentation

8/6/2019 Rogers Gillett Kodak Case Presentation

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Kodak Funtime FilmsOla AllaymounEcho Chen

Carli GillettEricka HightowerRanjani Venkataraman


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Agenda

Company Background

Current Problems

Major Market Players Market Share

US Photographic Industry

Consumer Behavior

Kodaks Market Strategy before 1994 Fujis Strategy

Kodaks Proposed Strategy Recommendations

Evaluating the recommendations


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Company BackgroundKodak was founded in 1892 by George Eastmanand Henry Strong

George Eastman gave the advertising line Youpress the button, we do the rest

Market Leader in US Enjoyed Monopoly before the entry of its

competitors

Sold cameras, films and other imaging products

Entered professional tape market for a brief periodin 1980s

Largest supplier of photographic films in the world,

for the amateur, professional, and motion picturemarket


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Current ProblemsLost 8% stock value in one week

Due to rumors of price cut

Losing Market share in its home territoryMarket share dropped from 76% to 70% in 5

years(1989 1994)

Slow Growth rate due to competitorsKodak growth rate 3% in 1993

Could not compete with its competitors in PriceCould not sell private labels due to aconsent decreeHigh advertisement spending pushing up

the price


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Market Share

O ther

5%

Fuji

11%

Polaroid4%

Private Label

10%

K odak

70%


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Th

eU.Sp

hotogra

phicfilmind

020 0

60

80

00

70

72

7

76

78

80

82

8

86

88

0

Year

Annual Market Share

ui

oda


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Kodaks Marketing Strategy Before

1994

Positioning Strategy

Spent heavily on advertising products

Positioned as a provider of superior quality

films

Marketed 2 products

Super Premium Brand

Kodak Ektar targeted at advancedamateurs and professionals

Premium Brand

Kodak Gold Plus flagship brand


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About Fuji

Sold only branded products.Worldwide sales of $10 million (halfKodakssize)

Started serious competition with Kodak in 1984by becoming the official film provider of the1984 Summer Olympics in Los Angeles

Growth Rate of 15% in 1993Price was 20% below the price of Gold Plusbrand


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vs

Similarities

Fuji and Kodak both sold onlybranded products

Offered superpremium brandswith a target market of

professionals and advancedamateurs

Contrasts

Fuji was a leader in theeconomy brands market whileKodak was not in the market atall initially

Kodak s marketing throughadvertisements was much

heavier (in order to position theproducts in the minds ofcustomers) Kodak spentmore than 4 times more onadvertising than Fuji


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Film Distribution

0

5

10

15

20

25

30

35%

D iscount &

D epartm ent

Store

D rug Store Cam era Shop Super M arekt &

C onvenience

W holesale

C lubs

M ail O rder


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Consumer Behavior

x


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Consumer BehaviorProductProduct Price ($)Price ($) QualityQuality RankRank

Super premium BrandsSuper premium Brands

Fujicolor RealaFujicolor Reala 4.694.69 9090 55

Kodak EktarKodak Ektar 4.274.27 9292 44

Pr

emium Brand

sPr

emium Brand

sKodak Gold PlusKodak Gold Plus 3.493.49 9393 33

Agfacolor XRGAgfacolor XRG 3.493.49 8888

Economy BrandsEconomy Brands

Fujicolo Super GFujicolo Super G 2.912.91 9494 22

Konica Super SRKonica Super SR 2.912.91 9393 33

Scotch Color (3M)Scotch Color (3M) 2.692.69 9292 44

Price BrandsPrice Brands

Polaroid High Definition (3M)Polaroid High Definition (3M) 2.492.49 9595 11


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Kodaks Proposed Strategy -

RepositioningBenefit segmentationNew Emulsion TechnologySegments included:

Gold Plus as flagship product and no price

reduction on thisSpecial memories targeted consumers whowould be attending graduations, weddings, babybirths, etc.Diverted 60% of advertisement spending for

promotion


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Kodaks Proposed Strategy -

Repositioning

Royal Gold good strategy to replace unprofitableEktar

Unexpected moments targeted wider audience thatwould utilize the film on a more regular basis for any event

that was not targeted by the Royal Gold film Will have rich colors and sharp pictures

Specifically targeted at customers looking to makeenlargements

Diverted 4 % of advertisement spending for promotion

Prices % above Gold Plus for higher trade margin

Funtime to compete in the Economy Brand Market

Priced % below Gold Plus


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Important Features of Funtime

StrategyNiche marketing

Price-conscious customers

% advertisement spent

Limited presence 2 times an year during off peak season

From April to JuneFrom September to November

Sold in limited quantities

To be made available in speeds

ISO 1ISO

To be made available only in value packs

rolls of 4 exposures

4 roll package with 3 rolls of 4 exposures and 1 roll of 3

exposures


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Snapshot of New Strategy

Specifically Why Funtime??

Bolster the return of formerKodak customers

Use Funtime to segment a specific Market

Lure non-Kodak users

Good price for price-conscious customers

Cannibalization took some focus off Gold products but overallretained customers forKodak rather than letting them go to Fuji

Though Funtime is cheaper than Fujicolor Super G,Funtime has higher gross profit than Fujicolor Super G.


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Recommendations

Funtime should be made available throughout the year

Single packs should also be made available in limited

quantities at department stores and discount stores

Channelize some advertisement dollars towards

Funtime promotion


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Why?

All Year supply Price sensitive customers can buy it all round the year Definition of off peak season not clear. April June does

not seem to be off peak

Single packs Target customers who are price sensitive but do not like to

buy in bulk Distribution in discount and department stores as most

customers buy from there Funtime Promotion

Kodak Gold is an already established brand Funtime needs to be advertised to make people aware of

this product

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rogers gillett kodak case presentation

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