The market for camera films is very competitive. During the five year period from 1988 to 1993, Kodak’s market share fell from 76% to 70%. In response, Kodak decided to revamp its product line to include Funtime Film, a seasonal offering at a low price point. In this case, you are asked to decide whether the new product line strategy will lead to a reversal in Kodak’s market share decline.
In preparing this case, consider the following questions:
1.Discuss the consumer market for camera film. What are the key drivers of consumer choice in this market? What role does price play in the purchase decision? What role do product features play in the purchase decision? Are there distinct consumer segments in the film market?
2. Why is Kodak having so much trouble in the film market? Why is the decline of 6 share points so important to a company with 70% market share? In answering this question, describe and critique Kodak’s old product line strategy.
3. Analyze the proposed new product line. What role is Funtime Film expected to play in the new product line? How will the various products in the new line be positioned? In your opinion, will this new product line strengthen Kodak’s competitive position in the film market?
4. Taking a long-run perspective, what should Kodak do to blunt price competition in the film market? In answering this question, consider the 4 P’s (product, price, promotion, place) and the general principles of category management.