Eastman Kodak Marketing Strategy Essay
Q1. Sum up the market characteristics and trends. In the image film marketplace the major suppliers were Kodak, Fuji, Agfa and 3M. Fuji and Kodak sold only top quality product although Agfa and 3M sold their film as branded product as well as to other businesses in private label.
Total Market In 93 the total marketplace was around 670 , 000, 000 24 – exposure proceeds. Typically someone paid between $2. your five and $3. 5 for the 24 direct exposure rolls.
So in common they accustomed to pay $3 for a 24 exposure roll. So Total Market sama dengan 670million * 3=2 billion Market Share The industry within UNITED STATES was monopoly as Kodak’s market share was about 70%. Yet worldwide, industry was competitive. Fuji was a strong rival in throughout the world sales (Fuji -$10 billion dollars, Kodak – $20 billion).
Appendix A depicts the system market share of Kodak in U. S. Market Growth The market’s annual unit growth price was proportioned only 2%. So this is actually a fully created mature market. We can classify this market while Cash Cow according to the BCG growth discuss matrix. The annual regarding Kodak have been only 3%which is much lower in beat the competitors.
Appendix N depicts the annual expansion rate of numerous companies. Buyer Information Consumer were fewer educated about the specialized aspects of film and notice it as a product often concentrating on price by itself to purchase. Appendix C describes the graph showing the buyer buying style trend. Cost Tier Depending on the price divisions there were multiple category of brands (i. electronic. Superpremium, High quality Economy & Price) available in the market.
Appendix G depicts the retail price tier ranges. Superpremium brands were not the main sellers. Pertaining to Premium goods of Kodak, the major margin was approximately 70%. It seems that Kodak implemented market skimming cost strategy to take care of Premium items.
Fuji’s low margin was about 55% intended for the economy brands. The perimeter of Price item was decrease. This low cost brand was targeted towards segment of shoppers where consumers were much less educated regarding photography and focused on selling price alone to acquire. Appendix At the depicts the several distribution channel of the general photo film market.
Q4. Considering intro of Funtime and overlooking Royal Platinum, calculate industry shares of Funtime and Gold As well as that would produce Kodak indifferent to expose Funtime or take no action. Assess how genuine it is to increase profits with introduction of Funtime taking into consideration the existing market segments and plausible competitive reaction. Reasons behind failure of Funtime The first is actually that they program not to advertise.
This seems to be a mistake mainly because funtime can be described as new product pertaining to the consumers. Consumers need to be educated they own a new merchandise offering plus they need to know the particular value proposition is. Yet , if there is zero education from the product, that could lead to customers to believe that Kodak is providing less quality for their existing products, rather than rolling out a new lower price alternative. In the case of failure of the funtime, Kodak Gold and Royal Rare metal would be able to maintain the same discuss of the marketplace currently because of brand Loyalty and separate segment of shoppers targeted.
The excess expenses done (packaging, features, styling) to release this product will be a loss pertaining to Kodak. But in the near future as the price delicate customer segment remained unserved by Kodak and development in plr film activity will decrease the market share of Kodak. Factors behind Success of Funtime and side effects in the marketplace shares Producing a proceed to enter the Overall economy Tier is a great play pertaining to Kodak. The marketplace appears to be planning toward price being the most crucial dimension to get consumer.
Hence the customer segment who usually view film as a item and often buy on value alone (Price Sensitive Client Segment) is the main target of funtime. Several of their ideas seem to make sense: For instance, it can be probably a good suggestion they only offer limited rates of speed. This would probably be sufficient for consumers who have are ordering in this tier. Also, making them available in benefit packs seems like a good idea mainly because they will be in a position to sell more products (rolls) of film this way.
Positive Unwanted side effects and Business: If launching funtime is successful then the market share of Kodak Gold would remain the same because of its loyalty and brand, Ektar market share will be converted to Regal gold reveal because of its particular segment giving (special occasion) and finally funtime will be able to goal the price hypersensitive segment. Because of this the market share of Kodak should be restored back to 75% or more in the upcoming years. As displayed in display 2 there would be definite loss of revenue of Fuji and Others. Polaroid and market share will stay unaffected as they are out of scope market for Kodak.
Negative Side results and Market Share: Now there will be few significant drawbacks. As the provide is limited throughout every season consumers may wait until the season to buy great time film instead of buying their particular other Kodak products that are available year round. This may cannibalize Kodak’s Gold As well as market share in premium category.
Kodak Gold Plus was the flagship brand of Kodak and Kodak’s gross margins were believed to be about 70%. So if the business of Kodak Gold As well as reduces it may well lead to large loss intended for Kodak overall. As proven in Demonstrate 2 although market share of funtime has grown and they have snatched five per cent (Fuji & others) coming from competitors but it really has also power to cannibalize industry share of Gold As well as which can decrease 10% or more.
Like Kodak Gold Additionally if we keep the same presumption that the low profit margin is 70%, retailer’s perimeter is twenty percent for funtime then we are able to discover (Exhibit 1) that the profit earned pertaining to Kodak Precious metal plus can be $0. 39 per device. Exhibit 3 shows that the total revenue from market has become (1777 – 1692) =85 million dollars It can also be mentioned that as being limited throughout every season the market growth of fun time will be very less.
Also lowering sector profitability by reducing normal price of film would keep the client expectation of lower prices later on product release.