The Company: Milestones
Eastman Kodak Company, commonly known as “Kodak”, is an American company focused on personalized imaging business. An iconic innovator. The leading name in photography.
1880 – Established in Rochester, N.Y.
1962 – The company's U.S. sales exceed $1 billion for the first time. 1969 – A Kodak camera was used on the
Apollo 11 mission.
1980 – Kodak celebrated its 100th
1983 – Kodak begins its cost-cutting
years, eliminating 7,000 jobs worldwide.
1995 – Average stock price is $58.41,
revenue reaches $15 billion and profit is
The Market: Major Players
1993: Approximately 670 million rolls sold times $3 average selling price of a 24-exposure roll = over $2 billion.
1988-1993: Market’s annual growth rate averaged only 2%.
Fuji and Kodak are locked in a global battle for dominance of the worldwide photographic market.
Annual Sales Growth Rate
U.S. Photo Market in 1993
The Product: BCG and PLC
Kodak has a large market share in a mature, slow growing industry. Kodak’s “Gold Plus” is the largest-selling brand, a “cash cow” that is “milked” to provide as much cash as possible.
Gross margin: Kodak – 70%; Fuji – 55%.
The Product: Pricing & Positioning
$2.19 – $2.49
Both Kodak and Fuji positioned themselves as providers of superior quality through their advanced technology.
Kodak’s “Gold Plus” is the standard of the industry.
Super premium brands are targeted to advanced amateurs and professionals. These products were distributed mainly through camera shops and were not major sellers.
The Consumer: Usage & Brand Loyalty
more than 25 rolls
Rolls per Year
5 - 9 rolls
less than 5 rolls
More than 50% of picture takers in the U.S.A. claim to know “little or nothing about photography”.
The Problem: Shrinking Sales
Over the past 5 years Kodak saw its market share eroding from 76% to 70% (1.2% loss on average per year) as competitors like Fuji and Konica attracted more customers with lower-priced products.
The Causes of the Problem
Change in consumers behavior – The importance of the brand name in consumer decision making is still strong, however, there is a growing body of price-sensitive consumers.
Change in value perception of the product – Consumers tend to view film as a commodity, often buying on price alone.
Fading differentiation between Kodak and its competitors – Actual quality differences among films brands were unclear to customers. Quality has become an “order qualifier” rather than an “order winner”. Huge advertising budgets spent inefficiently – In 1984, Fuji stunned Kodak by winning sponsorship of the Olympic games in Los Angeles. Fuji had lower- priced products and made American customers aware of it. Involvement level – The time and effort the consumers spend for their buying decision. Film is a low involvement product and the poor knowledge of the customers about photography accelerated film's commoditization.
1. Do nothing – hold the line, hope for better times to return, and in the mean time continue to lose market share (i.e. customers who might never come back)....
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