Asasas

Eastman Kodak Company
: Funtime Film
Prepared by Group D
Changhyun Lee, 20010398, agentofdrm@gmail.com
Hana Kim, 20063139, hanawind@neuron.kaist.ac.kr
Jaecheol Cho, 20060639, wowhacker@kaist.ac.kr
Jongjin Kim, 20040137, kjjgwp@msn.com
Li Xinxin, 20076011, star_lee85@hotmail.com
Li Xe, 20076010, dorislee22@hotmail.com
10 April, 2007
Funtime Film
2007 Spring | BEP430 Marketing | Prof.Kim Wonjoon | Group D April 10, 2007
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1. Issues
Eastman Kodak Company is loosing its relative market share. It had decreased from
76% to 70% in United States [Exhibit 1]. There are reasons which causing the
market share loss:
a. The photo film industry is in its maturity stage in terms of product life cycle.
b. Increasing competitors in the film market, for example: Fuji, Konica, Agfa and3M.
c. Competitors provide lower price films compare with Kodak and also sell films
on a private label basis.
d. Consumers view film as a normal commodity, often buy on price alone.
e. A growing number of price-sensitive consumers.
f. Kodak has not yet developed more competitive technologies.
g. Different film brands shows a general similarities in qualities.
h. Kodak’s dealer margin isrelatively lower compare with its competitors.
2. Goals
a. Boost or remain market share
Due to fierce competition, Kodak is gradually losing its market share in the film
industry. It is important to remain a competitive advantage in order to gain more
market share. Also the more market share Kodak has, the better trade power in its
current marketplace.
b. Boost or remain contribution marginKodak needs a stable contribution margin because once contribution margin falls;
2007 Spring | BEP430 Marketing | Prof. Kim Wonjoon | Group D April 10, 2007
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it will be very difficult to reverse. Due to the fact that Kodak is holding a dominant
and leading position in current film market, it’s even harder to increase market
share as a result of strong competition, further more, most of thefilm quality is
relatively similar.
c. Development for a broader customer range
Kodak mainly serves superpremium and premium brands of films, however, the
number of customers are limited, therefore, profit generated is also limited. There
is a potential market demand for lower price films in the market. Most of the
people using conventional camera are non-professionals, in other words, theeconomy segment has more growing potential which Kodak has previously
ignored.
d. Adapting and producing more advanced and innovative films and cameras
Since photo film industry has reached its maturity, it is important to develop new
products in order to remain growth instead of waiting to be exited from the market.
It is vital to remain a competitive advantage by differentiate its product andservices compare to its competitors.
3. Customer Segmentation
From various annual film usages rates, we can divide customers into 3 groups, light
users, medium users and heavy users. [Exhibit 2] Also Kodak categorizes their
customers into three groups by loyalty. [Exhibit 3] But tendency of treating films as a
commodity and glowing body of price sensitive consumers makes it harder to applythis traditional customer segmentation to new film market, especially for Funtime
2007 Spring | BEP430 Marketing | Prof. Kim Wonjoon | Group D April 10, 2007
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strategy. So new segmentation will categorize customers as a very specific group,
including everyday use and casual picture takings. [Exhibit 4]
4. Alternatives
4.1 Without Funtime, status-quo.
If Kodak doesn’t lift a finger tomaintain or boosting market share, Kodak’s unit
market share will certainly be changed. We employed the following procedure.
a. Calculate number of number of exposure consumed from total number of
exposures and market share of each company
b. Calculate the growth rate between 1992 and 1993.
c. Assume that the growth rates except for Kodak’s remain the same for 1994
d. Calculate the market share...