Indian Institute of Management Nagpur

Marketing Management End-Term Examination

Time Duration: 120 min; Total Marks: 60

Instructions

This is an open case only examination. Please do not bring any notes, or notebooks, or
other papers, apart from the case.

You may use a calculator only. Academic malpractices will be severely dealt with.

Refer to the case on Eastman Kodak, provided with this question paper, in answering
the questions listed below. Support your arguments with data (with reference to the case),
and deductions wherever possible. Please answer in the space provided only. You must
retain the same formatting viz., Times New Roman 12 font, and use singles-spacing and
one-inch margin on either side of the answer script, for your typed-in answers. Please
note that hand-written answers will NOT be considered. Extra sheets may not be used.
Numbers in parentheses indicate marks.
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Name: Ascharya Debasish Mishra
Student ID: P20062
Program:PGP 20-22
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Q1: Why was Kodak losing market share? Analyze, diagnose, and present your
assessment. [20]
Answer:

In the case it has been mentioned that both Kodak and Fuji targeted advanced amateurs
and professionals. So it can be presumed that these customers have knowledge about
camera, rolls and ISO numbers. However while observing the ratings it can be seen that
there is actually not much difference between the ratings of Gold plus, SkotchColor and
Konika. In fact the differences in quality are barely significant. However there is a
difference of around $0.6 to $ 0.8 between the prices when compared to Gold Plus. Fuji
Colour Super G with a higher quality rating also had a lower price than Gold plus. The
same is true for Kodak Ektar and it has a significantly higher price. However it is also
given majority of the buyers have little or no idea about the picture quality and rely on
price alone to buy the product. So the company should look upon the pricing strategy of
its product especially looking at the price sensitive market. Even out of Kodak’s own
customers only 50% were loyal to the brand so Kodak is always at a risk of losing the
other 50% as there is high competition with different players. Another problem was that
even though Ektar was priced so highly maybe to differentiate it still the lackluster
ratings made it a very difficult product to buy for people especially who were not brand
loyal . Another factor can be that the overall market itself was not growing so Kodak who
already had a higher share found it difficult to hold on to its customers.
Q2: What strategic options Kodak may consider in addressing the decay in market share?
Which among the options thus identified by you should Kodak follow, and why?
[20+20]
Answer:

The major strategic option that Kodak can take is decrease the $50 million dollar budget
for advertising and marketing and invest it in research and development to increase the
quality of the films and differentiate the product. Kodak is a reputed brand with 70%
market share and should not need to expend so much more on marketing as its
competitors are only spending about 25% of it. However the company needs to look at its
advertising fund allocation also. As seen in the case Kodak has managed to attain good
popularity in the market even though its existing products were highly priced. So Kodak
can look to reallocate the advertising fund allocation by spending more on advertising the
new Funtime product as it is something that the consumers would previously not be
aware of. Being a new line of launch and since it is scheduled to be sold in limited
amount the marketing expenditure should be more for this product during the specified
time of the year whence it is sold so as to attract audiences more. This become even more
important as the economy and price bands have more competitors and the prices Kodak is
keeping is almost the same.Also looking at the fact that customers have become price
sensitive and the market itself has saturated maybe Kodak can actually look to reduce its
gross margins overall so that the industry as a whole gets more number of customers.
However the risk with this is that a price war may start which may ultimately reduce the
company’s profitability. Kodak should not look to enter into private label products as it
might lead to too much brand dilution of the company. Also directly reducing the prices
of existing products would give the impression that the company had priced it heavily
initially which is a negative thing that the customers may feel regarding Kodak.
So looking at all the options the new product line launch seems to be the best strategy but
the focus of marketing expenditure needs to be aligned differently. A focus on new
technology in the field and further research by the company is something that also needs
to be rigorously pursued to ensure its top of the line expensive products are being seen
differently by the customers so that the top line customer segment who are not price
sensitive but need good quality products are also retained. Also some market research can
be undertaken by the company to gauge the reservation prices customers are willing to
pay so that they can come up with more efficient pricing strategy if possible.
Space for Rough Work and Supporting Calculations

Do NOT write your answers here. Answers written here will NOT be evaluated.

670*1.02=683 million-expected market size growth for next year

UNDERTAKING

I, Ascharya Debasish Mishra belonging to PGP batch 2020-2022 bearing roll number
P20062 hereby state that I haven’t used any unfair means while attempting the question
paper.

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