CEO of Kodak had to set out new strategy for film products, because during January 17 and January 24, 1994, Kodak lost 8% in value on rumors if a price cut. Kodak was still a dominant in photo film market, but he had a lot of competitors like Fuji Co. and Konica Corp. They were offering consumers lower priced products. Market share of Kodak was falling from about 76% to 70% over the past five years. Kodak introduced new product, Funtime Film, which would be priced at lower rate the way it competitors’ products do. So he considered to gain its market share back by repositioning its film product line.
Main information of the case
Kodak has the biggest market share in U.S market in 1993. He had 70%, while its main competitors Fuji had 11%, Polaroid 4% Private labels 10% and other 5%. Major suppliers were Kodak, Fuji of Japan, Agfa of Germany and 3M. Kodak and Fuji sold only branded products, while both Agfa and 3M sold their products as branded products and as well as to other firms for the sale under a private label. Polaroid entered market later with its branded product which it sourced from 3M. Both Fuji and Polaroid’s U.S dollar sales grew at over 15% in the past year, compared with Kodak’s 3% growth rate.
There were 4 price tiers at that time. Super-premium brands were Fujicolor Reala at 4.694 and Kodak Ektar at 4.27$ were main dominants. At Premium Brands Kodak Gold Plus and Agfacolor XRG were main competitors. In Economy Brands there were three brands from other companies than Kodak. And finally there was Price brands.
Both Fuji and Kodak positioned themselves as superior quality providers. A test was conducted and it was revealed that most films had almost similar quality, so there was no big difference in them. Another survey said that picture takers know nothing or little about photography and that mostly these people buy films depending only on price. But still importance of brand name in consumer decision making was...