Eastman Kodak

Eastman Kodak Company

Case Write-up

May 4th, 2011

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Group A13

Arpan Phull

Dhrubabrata Ghosh Dastidar

Prashant Kumar Bothra

Rahul Uday Lakhani

Sanketh Satya Garimella

Problem/Purpose:

In a saturated market with only 2% growth per year Kodak, USA’s leading brand in camera films has been losing its market share. From 1989 to 1994 Kodak’s market share has gone down from 76% to 70%. On the other hand Kodak’s biggest competitor Fuji has been growing at a rate of 15% per year and has used lower price as a strategy to gain market share. This decline in market share is due to changing consumer preferences. An increasing number of customers perceive very little quality differences between the films rolls available in the market, and therefore, primarily shop on price. To regain the lost market share the marketing team at Kodak has come up with a new strategy to introduce an economic brand (Funtime) which will be available in limited quantities twice a year during off-peak seasons. Also, the company has decided to reposition both its leading brands to solidify their position in the market.

Analysis:

Market Segmentation: The film roll market can be segmented based on several dimensions as seen in Exhibit 1.

• Income: High, Medium, Low

• Value perception: Premium, Standard, Value

• Quantity of rolls purchased: Light, Moderate, Heavy

Among these, the most relevant categories for Kodak would be Standard and Value quality perception as well as Low and Medium income people. These segments represent the majority of buyers who are shifting to other brands and leading to Kodak’s market share loss. Buyers in these segments have some key characteristics:

• Are price conscious

• May have disposable income to buy higher brands.

• Are brand conscious and would like to be able to buy higher brands when they can afford them

• Often weigh quality versus price to make an informed purchase decision

Why has Kodak lost...