Eastman Kodak Marketing Strategy Essay

Q1. Summarize the commercialise characteristics and trends.In the photo claim commercialise the major(ip) suppliers were Kodak, Fuji, Agfa and 3M. Fuji and Kodak sold just tarnish intersection whereas Agfa and 3M sold their fritter away as branded product as swell up as to other firms in tete-a-tete label. Total securities industry In 1993 the tote up trade was around 670 million 24 moving-picture show rolls. Typically a consumer paying(a) between $2.5 and $3.5 for a 24 exposure rolls. So in average they utilise to pay $3 for a 24 exposure roll. So Total grocery = 670million * 3=2 billion mart Share The merchandise within ground forces was monopoly as Kodaks grocery make come to the fore was some 70%. But worldwide, the mart was competitive. Fuji was a strong rival in worldwide sales (Fuji -$10 billion, Kodak $20 billion). supplement A depicts the building block merchandise grapple of Kodak in U.S. Market Growth The securities industrys annual unit harv est-time rate was averaged only 2%. So this is basically a fully developed mature market. We open fire categorize this market as cash in Cow according to the BCG harvest-time conduct matrix. The annual growth of Kodak had been only 3%which is much slighter in differentiate to the rivals. appendix B depicts the annual growth rate of different companies. Consumer Information Consumer were little improve about the technical aspects of film and assimilate it as a good often focusing on impairment alone to purchase. Appendix C depicts the graphical record showing the consumer get pattern trend. expenditure floor Based on the expense tiers there were multiple category of brands (i.e. Superpremium, support Economy & Price) available in the market. Appendix D depicts the scathe tier ranges. Superpremium brands were non the major sellers . For Premium products of Kodak, the stark(a) gross shekels margin was approximately 70%.It take cares that Kodak implemented market sk imming expense strategy to time lag Premium products. Fujis gross margin was about 55% for the thriftiness brands. The margin ofPrice product was rase.This get price brand was targeted towards the segment of customers where consumers were little educated about photography and center on price alone to purchase. Appendix E depicts the different distribution give of the overall photo film market. Q4. Considering door of Funtime and ignoring Royal cash, calculate the market shares of Funtime and metal(prenominal) prescribed that would make Kodak indifferent to instal Funtime or take no action. pass judgment how realistic it is to improve scratchs with door of Funtime taking into account the existing market segments and plausible competitive reaction.Reasons for un triple-crown person of FuntimeThe get-go problem is that they plan not to advertise. This seems to be a mistake because mutationtime is a sore product for the consumers. Consumers need to be educated that th ey have a new product tining and they need to know what the apprise proposition is. However, if there is no development of the product, which could lead to consumers to believe that Kodak is offering less quality for their existing products, rather than curlicue out a new lower price alternative. In case of failure of the funtime, Kodak bills and Royal money would be able to brinytain the same share of the market currently because of brand loyalty and separate segment of customers targeted. The extra expenses through with(p) (packaging, features, styling) to release this product would be a loss for Kodak. But in the come up future as the price fine customer segment retained unserved by Kodak and growth in private label film activity depart decrease the market share of Kodak.Reasons for Success of Funtime and side personal personal effects on the market shares Making a move to enter the Economy Tier is a smart play for Kodak. The market appears to be heading toward price universeness the most important dimension for consumer. So the customer segment who tend to view film as a trade good and often buy on price alone (Price Sensitive Customer Segment) is the main target of funtime. A few of their ideas seem to make sense For instance, it is probably a good idea they only offer limited speeds. This would probably be competent for consumers who are buying in this tier. Also, do them available in value packs seems ilk a good idea because they bequeathing be able to sell more(prenominal) units (rolls) of film this way. Positive positioning effects and Market ShareIf launching funtime is successful then the market share of Kodak Gold wouldremain the same because of its loyalty and brand, Ektar market share leave behind be born-again to Royal gold share because of its modified segment offering (special occasion) and finally funtime will be able to target the price sensitive segment .As a way out the market share of Kodak should be restored ba ck down to 75% or more in the upcoming familys. As shown in confront 2 there would be defined loss of revenue of Fuji and Others. Polaroid and hole-and-corner(a) market share will remain unaffected as they are out of scope market for Kodak. Negative Side effects and Market Share instanter there are few major drawbacks. As the offer is limited throughout the year consumers may just stay until that time of year to buy fun time film instead of buying their other Kodak products that are available year round. This can consume Kodaks Gold Plus market share in premium category.Kodak Gold Plus was the flagship brand of Kodak and Kodaks gross margins were believed to be about 70%.So if the market share of Kodak Gold Plus reduces it may lead to bulky loss for Kodak as a whole. As shown in queer 2 though the market share of funtime has increased and it has snatched 5% (Fuji + others) from competitors but it has excessively capability to cannibalize the market share of Gold Plus which can reduce 10% or more. Like Kodak Gold Plus if we cargo deck the same assumption that the gross profit margin is 70%, retailers margin is 20% for funtime then we will be able to see (Exhibit 1) that the profit earned for Kodak Gold plus is $0.39 per unit. Exhibit 3 shows that the total revenue from market has been (1777 1692) =85 million dollars It can also be stated that as being limited throughout the year the market growth of fun time will be very less. Also lowering industry profitability by cut back average price of film would slip by the customer expectation of lower prices in the future product release.