.. tography. However, Kodak missed this opportunity in their haste to get into the digital camera market. Issue #2 – Continued revenue losses in the digital imaging division Here, the issue is Kodak’s continuing revenue losses in its digital imaging division. Again, one of the chief culprits is Kodak’s failure to introduce digitization before digital cameras.
As a result, Kodak has to grow two new products, digital cameras and digitization. This is a tremendous burden on Kodak’s financial resources. Additionally, Kodak did not effectively target or segment its market. Granted, Kodak and Intel did hundreds of one-on-one interviews and test marketing to develop and fine-tune advertisements. However, the advertisements were generic and appeared to focus on a limited audience. Issue #3 – Kodak’s failure to maintain focus on its core products As previously noted, Kodak has been criticized for not paying enough attention to such basic problems in its core camera and film businesses.
This is supported by Kodak’s slow response to Fuji’s pricing pressure in 1997. As a result, Kodak had to lower prices, eliminate less-profitable product items, and make price promotion offers. Had Kodak monitored its core markets efficiently, its marketing response would have been proactive, not reactive. Thus allowing Kodak to plan and implement more effective marketing strategies. STRATEGIC PLAN Alternative #1 In order to gain increased film market share in the United States, Fuji attacked Kodak’s core market in the most appropriate tactical fashion, by attacking on the price front. Fuji did not attempt to unseat the leader by offering substantially improved quality over Kodak.
Rather, it simply offered a cheaper solution to a common need. Fuji appears to have timed the attack while Kodak’s resources were focused on expansion into new markets and product lines. So while Kodak “wasn’t looking” they simply moved in and began taking increased market share by creating a price differential of 30%. This creates a serious dilemma for Kodak. Core products are heavily depended upon to fund growth in new areas.
Attacked during the infancy of new products should have been strategically expected by Kodak, still went unchecked until Kodak was forced to layoff 7600 workers and cut costs dramatically. In order to respond effectively to this problem and still remain a viable company for the new millennium, Kodak must approach its growth more conservatively than it did in the mid-90s. While investment in new product lines is necessary for all companies to continue to operate in the future, over stretching resources may make the company weak in core technologies. Kodak should significantly reduce its focus in the digital camera segment of the digitization product line. Returning resources back to the core technologies in both the marketing and cost reduction areas will provide Kodak the opportunity to reestablish any losses in market share and provide necessary financial resources to pursue other growth areas but at a slower, more conservative pace. Marketing strategy in the core technologies should begin focusing on recapturing the traditional film market while advertisement trailers should be designed to slowly introduce the consumer to the new emerging product lines.
Repetitive trailers attached to familiar ad campaigns will assist the market in making alternative photographic/film decisions with the least amount of stress or fear associated with an unfamiliar product. By linking the familiar with the unfamiliar in the consumer’s mind, eventually the consumer will begin to view the newer product as simply another option in their fundamental film repertoire. Alternative 2 Kodak should significantly slowdown the development and promotion of its digital camera market for a minimum of one-year. The additional resources made available from this approach can be used to firm up its core product market and aid in the growing of its digitization market. However, once the core product market is reestablished to its desired level, the primary focus should then shift to the digitization market.
Here, the primary focus should be to heavily introduced its Picture CD into the computer market and hopefully give Kodak that much-needed face-lift. Even today, consumers still do not associate Kodak with the computer industry. This leaves Kodak asking, “How can we change this way of thinking.” Team Commander feels the answer lies within digitization, specifically Picture CD. Currently, you can purchase a Picture CD whenever you have film developed. However, we were surprised to find that many people didn’t know about Picture CD, let alone comprehend its intent.
This is an area that Kodak must change if they hope to succeed in a fast growing digital industry. Hopefully, this approach will allow Kodak to regain its foothold in the traditional film and camera market. Additionally, this will allow Kodak to remain competitive with its chief rival, Fuji, who is presently out-marketing and out pricing Kodak. Implementation Plan Provided below is what Team Commander hopes to be a winning marketing strategy that will help Kodak better sell their products and get back on track with increased sales revenues. The action plan provided is based on Alternative #2. Kodak must redirect its attention and capital from the ailing digital camera market to its core products and digitization. To firm up its core market, Kodak must increase advertising. These should be primarily reminder advertisements. In addition, Kodak needs to increase sales promotions, to include samples, coupons, price packs, and point of purchase promotions.
After the core market is back on track Kodak will then start shifting its attention to the digitization market. Next, Kodak must work at getting Picture CD noticed. This is best accomplished by attracting first time Picture CD users with free samples. Also, Kodak needs to combine this effort with advertisements that are informational in nature. These advertisements should be geared towards building consumer awareness and confidence. It must also be noted, that Kodak must use customer information obtained from this effort for future target marketing. The next step Kodak must take is combining its Picture CD technology with its in-store kiosks. Place Picture CD technology here and allow customers to burn there own CDs. Currently, customers with 35mm negatives can place their negatives in the kiosks and change pictures to their liking, while viewing the kiosk screen. This approach will allow the customer to take pictures home on a CD and place them on their home computers for future use.
Kodak must then get its software noticed. To accomplish this step, Kodak must gear its software to work with other camera, printer, and computer manufacturers. Retailers must then be convinced to offer this software with the sale of any of these products. Finally, Kodak will return its focus to the digital camera market. Aided with data obtained from its Picture CD promotions, Kodak can effectively target their potential customers.
In addition to the six steps previously provided, Kodak must refocus on its company mission. This is especially true in marketing. Kodak’s current marketing mission appears to be too limited in scope and falls short of meeting company objectives. Thus, Kodak must discover new ways to sell and market their products. SUMMARY AND ANTICPATED OUTCOME While aggressively pursuing the digital camera market Kodak made a few costly mistakes.
First, Kodak was overaggressive in its attempt at gaining the upper hand in the digital camera market. As a result, the product was poorly marketed and fell short of meeting anticipated goals. Leaving Kodak with no alternative but to develop and introduce a second product, Digitization. Second, Kodak allowed itself to lose focus on its core products, while trying to grow its digital market. As a result, Fuji blasted them in a price war, which ultimately resulted in a huge price differential.
Each of these mistakes chipped away at Kodak’s bottom line. Alternative 2 was developed to correct these mistakes. Alternative 2 will permit Kodak to temporarily put the digital camera market on hold and redirect focus and capital to the core products and development of digitization. The primary objective is to ensure Kodak has the financial ability to maintain its strong hold in the traditional camera and film markets. Ultimately, this is the key to providing the resources required for supporting the development and growth of its digital market. Marketing Essays.