EASTMAN KODAK COMPANY : FUNTIME FILM

BRUNO DAVID FERNANDES-SCOTT DEVLIN

THE PROBLEM

Decline in Kodaks market share from 76% to 70% over 5 years ( 1989-1994 )
8 % decline in Kodaks stock due to rumored price reduction in film
15 % increase in U.S dollar sales for both Polaroid and Fuji compared to Kodaks 3 %
Lower priced brands such as Konica and fuji were gaining Market share faster than Kodak

MARKET SIZE FROM THE LAST YEAR

670 millions
24-Exposure Rolls

2$
billio
n

THE PHOTO MARKET

Market share
other; 19%

fuji; 11%

kodak; 70%

THE PHOTO MARKET

Fuji and Kodak sold only branded products

Suppliers 3M and Agfa sold branded and products private labels
Polaroid Sold a branded product manufactured by 3M
Despite Kodaks US market share, Fuji was strong competitor in worldwide sales ( $10 billions
vs $20 billion kodak )

THE PHOTO MARKET

Distribution Channels

other; 6%
Mall orders; 2%
wholesale clubs; 9%
Department/discount; 32%

supermarkets; 13%

Camera shops; 14%

Drug stores; 24%

MARKET AND PRICING

Fujicolor
Kodak Ekta

4 PRICE
TIERS

Kodak
Goldplus
Fujicolor super
G, Konica Super
SR, ScotchColor
Polaroid high definition,
Kroeger, walgreen, York,
Clark color, Kmart focal,
Target

Superprenium
Price: $4.27-$4.69
Premium
Price: $3.49
Economy
Price: $2.69$2.91
Price
Price : $2.91$2.49

MARKET AND PRICING

Kodak gold plus

Industry standard

Premium price tier at $3.49

An estimated 70% gross margin

Fujicolor Super G

Leader in economy tier

Priced at 17% less thans the premium tier at 2.91$

An estimated 55 % gross margin

THE PHOTO CONSUMER

By yearly, the consumers were segmented as follows :

THE KODAK ADVANTAGE

Over 70 years in film market

70 % of US market share
Kodaks 35 mm negative film buyers :

50% brand loyal

40% samplers

Only 10% price shoppers

Kodak positioned as a high quality product

Brand 1 : Ektar for professionals and serious amateurs
Brand 2: Golds plus for the rest of consumers

THE KEY ISSUES

Private brands are growing rapidly

Retailers obtain a higher margin by selling private brands
of picture takers know little or nothing about photography
10% of kodak buyers are price shoppers
Consumer reports tests did not find actual quality differences among products