Eastman Kodak Company: Funtime Films
Question: Is Kodak doing the right thing with the decision to have line proliferation: Kodak Gold Plus, Kodak Royal Gold and Kodak Funtime? Support your statement if yes, if no, please provide practical suggestions what to do instead.
Kodak is (in 1993) the dominant market player in U.S. with market share of 70%. In last 5 years the market share of Kodak decreased by 6 %. The main competitors are Fuji Photo Film Co (11% market share) and Konica Corp, which attract consumers with lower priced versions. Kodak film brand Gold Plus is the standard of the industry. During the week in January 1994 Kodak stock had lost 8% in value on rumors on price cut on film.
In my opinion decision made by Kodak in current version wouldn’t be the best way how to solve the problem for several reasons listed below:
1. The main problem is that Kodak is not able to attract consumers which are switching to other brands as Fuji with existing strategy. From my opinion one of the reasons could be also not enough smart advertizing campaigns. Kodak probably should use more attractive advertisements to switch the consumers back to them. They are spending at least 4 times more money for campaigns but theirs grow still is smaller than competitors – that could be a syndicator that they should try another way to advertize. But from the other side they already have very good and profitable brands which wouldn’t be reasonable to rebrand.
2. Very critical factor in this case is 8% decrease of stock value. If in this situation Kodak will introduce a new brand Funtime with much lower price the rumors will become truth. That could contribute even bigger decrease of stock value what would be absolutely unwelcome in this situation. We also can’t exclude that rumors are coming from competitors and to allow the rumors come truth wouldn’t be the best decision in this case. If this came from competitors and Kodak will show that this kind of rumors...
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