US Photo Film Market 670 million 24-roll exposures @$2.50 - $3.

.50 per 24-rolls pack 2% average market annual unit growth rate Kodaks Gold plus brand has been the largest selling brand (70% gross margins) Four categories differentiated based on the pricing- Super Premium, premium, economy and price brands Major players Polaroid  Kodak 4% Kodak Fuji  Fuji 70% 11%  3M  Polaroid Breakup of US Market Share  Konica  Private labels by Kmart, Kroeger, Target and York.
Private Label 10% Others 5%

Royal Gold (Replacement for EKTAR) Being targeted to a broader audience for very special occasions, e.g. the birth of a baby, the graduation, which is a marketing strategy to influence consumer behavior 40% of the Dollar advertising support allocated to it Kodak Gold Plus Flagship brand 60% of the Dollar advertising support Funtime Film Being targeted to the price-sensitive consumers Economy brand No advertising support Available in value packs, limited quantities and in off-peak seasons

The photo film industry is in its maturity stage in terms of product life cycle. Increasing competitors in the film market, for example: Fuji, Konica, Agfa and3M. Competitors provide lower price films compare with Kodak and also sell filmson a private label basis. Consumers view film as a normal commodity, often buy on price alone. A growing number of price-sensitive consumers. Kodak has not yet developed more competitive technologies. Different film brands shows a general similarities in qualities. Kodaks dealer margin is relatively lower compare with its competitors.

Market share of Kodak will diminish continuously like it has been. Through the calculation using Appendix 1, we can conclude that there is a risk of decreasing profit of Kodak. It means that Kodak has to make some strategies. According to the case, film markets annual unit growth rate is only about 2%. It means that we cant expect exponential growth of new-comer consumers so fast, eventually we have to make potential consumers to buy Kodaks product. Potential consumers here not only include present consumers who buy competitors product but also future consumers such as children.

Therefore, Kodaks first objective is to target newcomer consumers and competitors consumers buy Kodaks product. According to the data of testing many films, the prices of products are unreasonable, but other good quality films of other companies are sold in lower prices. If you provide a good product in a lower price, then there can be a good chance to gain market share. The second objective is to increase average households film usage rate from 15 rolls per year to 20 rolls per year in two years time. By introduction of a low priced product such as Funtime to develop the interest of non-users and competitors consumers. This can be achieved through extensive advertising and overall development of the market.

Launch of Funtime Film at 20 % cheaper prices than Gold Plus. Packaged only in Value Packs Available to all classes of trades Available in two most popular speeds

No advertising support Available in limited quantities for limited period only

Launch of Funtime Film at 20 % cheaper prices than Gold Plus. Packaged only in Value Packs Available to all classes of trades Available in two most popular speeds

No advertising support Available in limited quantities for limited period only

According to kodaks research, 40 % of its customers are samplers, the major part of which is to be converted to kodak loyals There is not much difference in the quality among existing brands in the 4 price tiers

There is a growing body of price sensitive consumers With the help of Funtime, consumer disaggregation would be possible i.e. the needs of those customers can be catered at a low price who could not purchase expensive kodak products Kodak had no existing product in the economic tier

The Funtime strategy can be termed as a half hearted and hasty strategy to counter the attack launched by Fuji as a Price War Kodak is currently countering every scheme of Fuji with vengeance

Gold Plus the premium brand still received 60 % of advertising expense, and the pricing was unchanged Royal Gold: selling at 9% premium over Gold Plus to the trade and 20% to the Final consumer, dedicated 40% of Advertising expense, Thus Kodak still remains a expensive Film as per the communication

Possibly there is a scope of confused positioning Lowering industry profitability by reducing average price of firms. Threat to kodaks brand value Cannibalizing kodaks gold plus market share in premium category Little possibility of market growth No advertising support

 Funtime is leveled to Economy Brands, which is only offered during the off-peak seasons and in limited quantities. x This probably will cause some cannibalism because research showed that 40% of Kodak buyers sometimes bought cheaper film on a test basis. Possibly not a huge amount of profit with the current Funtime strategy, and the risks appear greater than the possible benefit.. Customer confused about the product offerings and eventually shifting to Fuji or other Film Manufacturers

Conduct independent tests on new emulsion and incorporate in advertising to communicate superior performance Create marketing strategies to convert 40% samplers into kodak loyals Awareness should be created to improve photography industry as a whole Market share can be gained by brand extensions eg: single-use camera models, multi-featured cameras,etc.

Extend the availability of economical Funtime Film round the year to cater to price sensitive consumers Scan the environment to look for alternative production centres to retain margins and match competitors low pricing. Effective and smarter marketing techniques. Push for independent tests on new emulsion technology to display superior performance.