Eastman Kodak
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EASTMAN KODAK, INC.
DIRECTOR OF MARKETING, EASTMAN KODAK INC
FROM:
MARKETING CONSULTANT, EASTMAN KODAK
SUBJECT:
MARKETING PLAN FOR KODAK — FUNTIME LAUNCH
DATE:
11/06/07
After conducting a detailed study of the Kodak film market share, trend, strengths, brand equity, and its competitor’s strategy, we would like to propose Go-To-Market (GTM) strategy for our new product line, Funtime, and recommend strategies to defend the current market strategy.
Vision — Our vision at Kodak is to continue to dominate in the film rolls market.
Mission — Achieve a market share of around 75% in a year and grow at a steady 7-8% per annum to retain the market position. Therefore, I am defending the idea launching a new product line with a new go-to-market strategy. This new product line would consist of three films —
Gold Plus — Existing brand, its our flagship brand
Royal Gold — Replace Ektar in super premium segment, priced above 20% Gold Plus
Funtime — For economy brand tier, priced 20% below Gold Plus.
Our positioning statement for new product line (Funtime films) of Kodak is “Kodak produces the latest technology film rolls for its value-conscious and price conscious customers”. The GTM strategy for Funtime films will revolve around this positioning statement.
Target Customer Segment:
Customer Segment matrix to depict who buys our product
Old Age
Middle Age
Young
High Income
Mid income
Low income
In the above table, we have made the following assumptions —
Consumers in the category of old age and high income were more conscious about brand, and would not mind spending higher than usual for a film roll. They would also have turned into loyalists during a course of time
Consumer in the middle age, high-income category, would have high disposable income and hence be more quality and brand conscious. They would also be Kodak loyalists
Consumer in the young age, high-income category, would have high disposable income thus able to afford Kodak film rolls.
Consumers in the young age, mid income region would not exactly have a high disposable income but as they are young, they have fewer responsibilities and hence can afford to spend a greater share of their wallet on film rolls. They are not necessarily loyalists and may look at film rolls as just a commodity.
Funtime target audience
Old Age
Middle Age
Young
High Income
Mid income
Low income
Assumptions for this matrix —
Since the Funtime film roll is a new brand, with no advertising or banding exercise, and not being a premium viz. Gold Plus & Royal Gold, it would not necessarily attract the high income group in old age and middle age — who are more brand conscious.
Analysis: Even though Kodak was known for high price, its superior quality was generating high sales volume, but it slowly started dropping due to the entry of other cheaper brands such as Polaroid and Fuji. As a result, we were not tapping much on the potential segments such as Middle and Low Income group.
With our new brand �Funtime’, we are offering the superior quality at a lower price. This should capture a broader market segments, defending our market share.
Needs & Requirements:
According to the customer survey conducted by Discount Merchandiser, more than half the users in US knew little or nothing about photography. Also, some of the new brands in the market were perceived to be of good quality because of their distribution strategy. It is interesting to note that Polaroid, which is the cheapest in the market, has been rated as the product with best quality. We can conclude from this that the film rolls are now seen as a �commodity’ and that price is one of the major buying factors in the volume-driven economy segment.
Analysis of this chart:
As per the tests conducted by “Consumer Reports” magazine, the quality of all the film rolls was almost same. Polaroid film roll technology was even found to be superior to Kodak film roll. In fact, Kodak film roll is at the middle of the order. This is interesting since we at Kodak know that our technology of producing film roll is much more advanced than that of our competitor’s. However, market is driven by branding, distribution and pricing.
Looking at the trend we could see that the differentiation should come from our GTM strategy. Branding and positioning is a key to capture this new potential market, and to regain the overall market share.
Competitive Forces — We know that Kodak’s market share has dropped from 76% to 70%. This is mainly due to aggressive price warfare & distribution strategy by our competitors such as Fujicolor and Polaroid. Their cheapest product is 30% cheaper than our premium product. We are growing at 3% year on year (YOY) compared to Fuji and Polaroid both growing at the rate of 15% (YOY), which means that it’s only a matter of time before we lose our dominance. Even private labels are growing at 10% YOY
Facts:
For the above chart, we have used the current growth rate of Fuji, which is 15%, and of Kodak, which is 3%.
Assumptions:
We have assumed the total sales values of Kodak as $ 20 Million and that of Fuji as $ 10 Million. These numbers have been taken based on the fact that as of now, Fuji sales are half of Kodak sales.
Analysis:
As from this chart, we can infer, that given our current growth rate and that