ISSUES

Decline in Kodak’s market share from 76% to 70% over 5 years (1989 – 1994)

Decline in Kodak’s stock by 8% due to rumored price reduction in film

Increase in US dollar sales for both Polaroid and Fuji by 15% compared to 3% of Kodak’s

Lower priced brands such as Konica and Fuji gaining market share

REASONS

Photo film industry in maturity stage

Increasing competitors (Fuji, Konica, Agfa and 3M )

Competitive prices

Film seen as a normal commodity, often bought on price alone

Similar quality of products

Lower dealer margins for Kodak products

U.S. PHOTO FILM MARKET

• 16 billion color exposures made in 1993• Average growth rate of 2%

U.S. MARKET SHARE

CATEGORY PRICING

Four price tiers in the market:

Super-premium Brands (Kodak Ektar at 4.27$)

Premium Brands (Kodak Gold Plus at 3.49$)

Economy Brands

Price Brands

PURCHASING PATTERN OF CONSUMERS

QUALITY SCORE

THE FUNTIME STRATEGY

Three offerings in the product line with new technology

Gold Plus- same price, 60% advertising support

Royal Gold – ‘Ektar’ replacement, 9% premium over gold plus, 40% advertising support

Funtime – No advertising support, 20% lower price than Gold Plus

FUNTIME MARKETING PLAN

No advertising support

Film offered twice a year (off peak season)

Available in limited quantities

Offered in ISO 100 and ISO 200

THE ALTERNATIVES

Do Nothing

Reduce price of Gold Plus

Increase brand spend

Introduce economy series: Funtime No advertising and available all through the year

Will help increase sales but will adversely affect net profits No advertising and seasonal availability

It is the best of both worlds. This would increase market share whilst controlling cannibalization

With advertising and seasonal availability Can help to further capture market from competitors.

THE ANALYSIS

RECOMMENDATION

As per analysis

Funtime with advertising would be the best solution