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Date Submitted: 11/16/2012 05:08 PM

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To: David Taylor

From: Sean Couch, Yiwen Xin, Thunayan Al-Yaqout, Zeyu Zhang

Date: 12-9-23

Re: Eastman Kodak: Funtime Film


Recent studies have shown that among all other industries, two industries stand out as the oldest, and most profitable within the field of media: the film and photography industries (Weave, 2011). These industries, although old and profitable, are growing. The company studied here is Eastman Kodak. "Eastman Kodak Company has led the way with an abundance of new products and processes to make photography simpler, more useful and more enjoyable" (About, 2011). Since 1888, its slogan has been "you press the button, we do the rest," (About, 2011). A century later (late 1992), Kodak faced serious danger.

I. What was happening?

As the film industry worldwide grew, Kodak was in peril. According to the case provided, the photo-film market grew 2% annually since 1993. This growth was accompanied by major suppliers, which in the end lead to competition. Moreover, during that time period numerous customers became more price-sensitive, and tended to lean more towards the price instead of the quality of products. This growing price sensitive segment led to a decrease in Kodak's market share to 70%. Because of their loss in market share, circulating rumors led to an 8% drop in stock price. Kodak was worried that growth in industry would increase competition, and therefore, cause customers switch to other brands on the basis of price, not quality.

II. Kodak segmentation before and after Funtime How we would segment the film market.

Segmentation is to divide customers based on their similar needs. Before the introduction of Funtime, Kodak had poor market segmentation. They came up with a segment needing a camera for everyday use, and another which needed higher quality film. In focusing on these segments, industry leaders came up with four groups (or price-tiers): super-premium, premium, economy, and price...