Product Line Of Kodak Photo Film example essay topic

Situation Analysis Although continuing its overwhelming domination of the photo film market, Kodak has suffered 6% of declines in film market share. This mainly resulted form fierce competition by Fuji Photo Film Co. and Konica Corp., selling consumer lower-priced films. Furthermore, since Kodak could not sell film on a private label basis, consumer is the only target to regain the revenue. Therefore, Kodak proposed to introduce a brand, Funtime, to fight with Fuji and Konica in economy class of film. With the introduction of Funtime, Kodak formed a 3-tiered product line, that is, Royal Gold, Gold plus, and Funtime.. The U.S. Photo Film Market Analysis In a five years! | observation, the photo film market's annual unit growth rate averaged only 2%.

Obviously, it's been at matured stage of product life cycle, meaning the most possible way to win market share is to switch competitors! | customers. That also forced Kodak to pay more attention to the price-sensitive consumer and launch Funtime in order not to be absent in economy photo film battle. However, to introduce a new product in the almost saturated market may cause cannibalization so that some patrons of Kodak Gold plus switch to Funtime. IV. Segmentation Before 1994, the product line of Kodak photo film is Ektar, targeting serious amateurs and professionals, and Gold plus, targeting families. Ektar is using behavior segmentation to serve those experienced amateurs, and Gold plus is using demographic segmentation and emphasizing on the family life cycle, which has been the main theme of Kodak communication strategy.

However, a useful segmentation should be the largest possible homogeneous group worth going after with a tailored marketing program. A segmentation like Ektar's might be too small to create a sustainable competitive advantage. Therefore, it is very smart for Kodak to replace Ektar with a broader positioned superpremium brand, Royal Gold. Because Royal Gold is positioned for!

SS very special occasions!" , it enlarges the possible homogeneous group of consumers. Its targeting market is far larger than Ektar's, although they both use behavioral segmentation. Furthermore, another behavioral segmentation variables, benefits, is chosen by Kodak. According to Consumer reports, November 1993, most films is no better or no worse than their competitors of the same speed. When quality is impossible to be improved significantly, price and brand image is especially important for consumers. Therefore, Kodak have to launch Funtime to feed the growing body of price-sensitive consumers and to compete with Fuji color Super G and Agfa color XR in economy brands.

I think the product line composed of Royal Gold, Gold plus, and Funtime is better than it was because it bases a substantial, accessible, and differentiable segmentation. V. Consumer Behavior Analysis Photo film is typically a low-involvement category, and Kodak has been trying to manipulate consumer's decision by associating Kodak's products with affective attitude. For example, we are all familiar with its tagline, ! SS Share moments. Share life!" .

Kodak has always advertised heavily, and spent a lot of money every year. Kodak uses family and emotional appeals to communicate with consumers to build a solid brand image in their minds. And Kodak also sponsored! SS American Photography-A century of images!" and! SS The Journey: The Next 100 Years!" projects to educate and remind people the important roles of photographs in our life; it implies how important Kodak is as well. This is a form of classical conditioning.

Although the fierce competition of film has threatened Kodak somehow, it could be in favor of Kodak. When purchasing a low-involvement product, consumers tend to choose the most familiar brand. So Kodak's strong brand equity is its major strength, and this is what all the advertising budgets paid for. Those TV commercials, promotions, and campaigns are to push Kodak to become one of evoke set with top-of-mind-awareness. VI. New Product Introduction!

The Funtime Strategy I have few concerns about the marketing strategy of Funtime film. First, Funtime is an intelligent idea but also a risky one because we can not know how consumer would react to the offering economy brand of Kodak. In consumer's reception, quality and price is always a trade-off. When Kodak introduced Funtime, consumer might doubt its quality and harm the brand equity of Kodak. I can! |t tell if Kodak did some marketing research or test before this decision, but I think it would be an necessary action.

Second, Kodak allocated zero advertising support to Funtime. Generally, introducing a new product would need more budget to create awareness, to run campaigns, and to encourage first trial. Then it would lead to repurchase. Lack of advertising effort would result in low awareness and lengthen the learning curve of consumers. Third, when Funtime was introduced, Kodak made a strange decision to offer Funtime only twice a year at off-peak film use times. From a view of consumer product, a continuous space presence is very important.

Usually we are expecting the product presences exactly the same shelf space with that in our memory. When a consumer walks in a department store shopping for photo films, and there is no Funtime available, what will he or she do? Pick another brand of film! Since the consumer is price-sensitive, he or she may not be brand-royal.

So it is very likely he or she walks out with competitor's products. People buy photo films usually is for some occasions or events, such as birthday party or vacation. When there is the need, it has to be satisfied very soon. Photo film is more like convenient goods than shopping goods. However, Kodak decide to sell Funtime only when the need of films is low. This might lead to many Funtime in stock.

From logistic point of view, I also doubt if Kodak has the power to force the retailers to rearrange the shelf display every 2-3 months for a low-priced product like Funtime. Furthermore, it is unknown that whether the retailer will follow Kodak's rule to sell Funtime at particular seasons. Finally, Funtime is only sold in! SS value packs!" . Kodak probably was trying to match the finding of Wolfman report. The report stated that the majority of the films are purchased in!

SSmultipacks!" which contained approximately 2-3 rolls of film per package. Nevertheless, due to lack of awareness, consumer may receive higher risk of buying a Funtime value pack. Though stating several disagreement with Funtime strategy, I agree with one of its strategy. I agree to offer Funtime film only in the two lowest speeds. To those price shopper, we are able to assume that they are not experienced photographers. If Kodak offer all speeds of Funtime film, it is highly possible to confuse the consumer and arouse many trouble while their decision making process.

For the low-involvement product, we just have to provide simple and quick solution to our customers. VII. Alternatives for Kodak Funtime Film 1. In order to make continuous presence and availability of Funtime, I suggest that Funtime be sold year round. Since Kodak recognized a segment of price-sensitive consumer, it has to propose a marketing program to offer the benefits which the target cares most. Kodak should offer Funtime film year round and keep the line on price.

To maintain stable availability makes repeat purchase easier. Another aggressive way to encourage repeat purchase is to insert certain coupon in the package. Therefore, the list price of Funtime film could be still higher than competitors to maintain the brand image as superiority, but customers can get the benefits as a good deal. 2. When introducing a new product, it is important to lower the risk of trial. So I suggest Kodak to launch single pack of Funtime in the initial stage of this product.

3. Maybe Kodak could introduce Funtime in some region or in several state at the first place. To see what the consumer receive and how they response to the new product would give Kodak much valuable information to decide the launching plan of Funtime film, and to avoid making mistakes. 4. I suggest allocating advertising budget for Funtime film. The budget should be much less than Royal Gold and Gold plus because we don! |t want to jeopardize the quality, premium image of Kodak.

We have to use commercials to educate consumers that Funtime film is a good choice because it inherits Kodak's quality and with an attractive price. 5. Kodak was successful to recognize the growing trend of price shoppers. It would be better if Kodak could know the segment better.

For example, the demographic of the segment would give Kodak a clear picture to market Funtime film. Those price-sensitive consumers may be the high school students or college students. Kodak can run special events in summer vacation to interest them. Or they might be blue-collar status with certain level of income. There are so many ways to reach the segment closer and satisfy their needs deeper.