A CASE ANALYSIS ON

EASTMAN KODAK CO. : FUNTIME FILM

Submitted By Akshat Kumar Joydeep Bhattacharya Rishi Nair Date: November 7, 2013

CASE ANALYSIS

SWOT Analysis Strengths: 70% market share 50% brand loyal, 40% samplers depending heavily on Kodak High advertising budget (4 times the nearest competitor Fuji) Weaknesses: Opportunities: Potential market in the economy segment by introducing Funtime Threats: Private label sales growth because of higher margin to dealers and hence market share increasing 10% price sensitive shoppers Knowledge level of consumer in the quality ratings bare minimum and hence they might switch brands

Buyer behavior The customers are high on brand involvement (50% brand loyal) and low on product involvement as majority of the users didnt know much about photography. The customers were price conscious.

Data points and inferences: 1993 color exposure market: 670 million x $3 (avg per roll) = 2.01 billion Kodak US market share: 70% Worldwide sales: Kodak: 20 billion, Fuji 10 billion Quality scores insignificant for the customer as majority of the scores fall in the 92-95 range. There is a very low awareness on the quality of the film Fuji gross margin for Super G 55% and Kodak gross margin for Gold plus at 70% Marketing budget of Kodak at 50 million

Problem How to recover 6% drop in the market share and ensure that it doesnt fall in the future Whether the strategy of replacing Ektar with royal gold and introducing Funtime in the economy segment is correct or not. Whether or not it should go for introduction of new product extensions

Solution: From the data analysis, it seems that Kodak should not go for introduction of economy brand Funtime. Kodak enjoys a dominant market share of 70% with its super premium and premium products. The brand of Kodak is admired by the customers and is considered to be a premium brand. By venturing into an economy brand, it might result into a brand dilution Also, the market which it is trying to venture is full of existing brands strong in economy domain (eg. Fuji) and also contains small private label players who can play with the margins. The total market potential would be just around 30% and venturing into a new territory is not feasible This launch may also lead to cannibalization of the existing product Kodak gold plus. The people are brand and price sensitive. Kodak loyal customers, if given a choice between a low priced film and an existing higher priced film, will definitely go for low priced as they are not aware of the differences in the quality

Also, on the similar lines, it is advised that the company should not go for replacement of Ektar with Royal Gold Ektar is the existing brand which is doing good and is popular among the professionals and senior amateurs. They are not price sensitive. So the idea of introducing a new product with higher margins to the dealers and lower price will not have a substantial impact on the sales growth. In fact it will reduce the profit margin.