Case Study :Eastman Kodak Company : Funtime Film
About Eastman Kodak2 Company Company is under new leadership. George Fisher is new CEO. He has devised new strategy for Kodak Film Products. Company has lost 8% stock value in past one week. Market share has dropped from 76% to 70% in last 5 years. Company plans to introduce new brand to compete with Fuji and Konica. Gold Plus is their flagship brand.
U.S. Photo Film Market3 Total Current Market is of 670 million 24- exposure rolls at average cost of $2.50 - $3.50 per 24-exposure roll. Major Players – Kodak, Fuji, Agfa & 3M. Growth of Polaroid and Fuji is greater than growth of Kodak.
Category Pricing6 Gold Plus (Kodak) Premium product of Kodak priced at $3.49. Majorly distributed through Camera Shops. Kodak Gross Margin is about 70%. FujiColor Super G (Fuji) Economy product of Fuji priced at $2.91. Kodak Gross Margin is about 55%.
Consumer Behavior7 Household Film Usage Average 15 rolls per year per household.
Consumer Behavior8 Overall quality score of top 6 ISO 100 films were almost equal with Polaroid HD being the best. Limited knowledge about photography among consumers meant that purchase of films dependent on price alone. For Kodak 50% Loyal customers. 40% Samplers 10% shopped on price.
Problem Statement9 Market share has decreased from 76% to 70% in last five years with 3% increase in sales in past year. While competitors sales grew over 15%. Major competition from Fuji & Polaroid.
Funtime Strategy10 Strategy to reposition its film product line by Kodak. Kodak will offer three films. 1. Gold Plus 2. Royal Gold 3. Funtime
Funtime Strategy11 Gold Plus To remain flagship brand of Kodak. Price unchanged from previous levels. Would receive 60% of advertising expenditure of Kodak.
Funtime Strategy12 Royal Gold To replace Ektar in super premium segment. Targets broader audience for “Very Special” occasions. Would receive 40% of advertising expenditure of Kodak. To be priced 20% above the Gold Plus brand.
Funtime Strategy13 Funtime Mainly devised to give Kodak presence in Economy Brand Tier. To be priced 20% below the Gold Plus brand. No advertising support. To be available only twice a year in off-peak period. Packaged only in value packs specifically in two forms. 2 rolls of 24 exposures. 4 rolls packages (3 rolls of 24 exposure & 1 roll of exposures)