Kodak Harvard Case
Case preparation memo GROUP NAME _____________________________ YOUR NAME_________Jordan Lewis_______ CASE __Kodak_________________ 1. What is/are the problem(s) in this case? Keep it to a single statement. At most, you may point out a couple of the key questions.
The problem in the Kodak case is that Kodak is losing market value because they are reworking their product line, causing doubt in customer mindset. They have created the Funtime film to attempt to regain market value. 2. What are the key issues? This is just a simple list (condensed SWOT).
You do not need to analyze in great detail. The key issues are that they are losing market value by remaking their best seller. By attempting to enter the economy brand-pricing tier, they have restructured and rebranded their other films, making their consumer doubt the quality of their original product. They have renamed their superpremium film to correlate with their premium brand, which is a strength, but could lose a few of their customers in the transition. By not heavily advertising their new line of Funtime film they run the risk of not reaching their consumer.
From a business standpoint, it seems odd to devote so little marketing to a new product, it seems as though they don’t care/believe in the product to begin with. 3. What are the alternatives? Be creative! What are the strategic tradeoffs (pros / cons)? This should be a list of at least 5 alternatives. They do not all have to be wonderful ideas. This is a brainstorming step -Take a percentage of the advertising/marketing dollars designated to the most well known, most purchased film, Gold Plus, and use it to run one campaign for Funtime. -Find a way to package the Gold Plus and the Funtime together. Advertise and market to current consumers of Gold Plus, their most popular film. -Give a free sample to 100 current Kodak users, it’s not incredibly costly and may be able to generate word of mouth advertising. -Sell each roll of Funtime individually. Set the price point a little higher than the packaged pricing would be, and market them as a quick solution to those necessary moments when a photo is needed. 4. Present a quantitative analysis of key alternatives (if appropriate). This section may include break even, margin analysis, ROI, LCV, etc.
State clearly if you do not find relevant numbers in the case. It is an interesting strategy to sell the Funtime film in “value packs. ” By selling them in packs they are making a relatively similar amount of money, as they would by selling one roll of Gold Plus film. On average consumers spent between $2. 50 and $3. 50 on a roll of film so by bundling Funtime together and selling them for roughly the same price as one roll of Gold Plus, it seems like a higher margin could be made by selling the Funtime rolls individually. If they were to sell them individually they could sell them for 0. 0 less than their Gold Plus and still make a decent margin, while maintaining the lower price point necessary for the consumer. The case states that Funtime is to be sold at a price 20% less than Gold Plus, which is sold for 20% less than Royal Gold. 5. In your own words, what is your recommendation? First, what reason(s) do you have to choose this alternative? Second, how will it be implemented? Use the marketing mix elements and research components as implementation guidelines. The previous sections can be duplicated within your group, but this part should be individual effort.
The best strategy would be to concentrate on the new product line and promote it heavily with a competitive price. Product strategies: I think they need to reevaluate the way they are introducing Funtime into the market. It makes little to no sense to introduce an economy price based item into the market without advertising it. In analyzing their target only 10% were price shoppers, but their manager of general merchandise marketing stated that there is a significant rise in price-sensitive shoppers, so it would make sense to dedicate at least a portion of the marketing strategy to the new price point product.
Go for market penetration! Pricing: The Funtime film is meant to fit the economy brand pricing tier. The other films in this tier range from $2. 69-$2. 91. The case does not directly state the price of one individual roll of Funtime film. It does however mention that it is only to be sold in packages of two or four. It would make most sense to sell two of the Funtime films for the price of one roll of their premium film. However, they do offer more exposures in the pack of four and could possibly sell it for a larger margin.
Especially if they are trying to compete with the private label margin which is higher than Kodak’s margin. To implement this pricing strategy I would advertise a “2 for 1” or “more bang for your buck” strategy, emphasizing the quality or genre difference as well. Promotional ideas: As an alternative I would choose to offer some form of promotion for the Funtime film. I find it necessary to promote a new product, rather than introduce it twice a year in limited quantities. An economy-based shopper is looking for something easy, cheap, and on the go, so make it easily accessible to them.
Promote it around graduation time, wedding season, and holidays so that people remember to pick up an extra roll of film. By releasing it with hardly any advertising and on a limited quantity run it doesn’t show much confidence in the product to begin with, so leave it out there and promote it when necessary. Distribution tactics: Distribute at point of sale, registers, next to picture frames, in the photo developing section of department and drug store. Maybe even convenience stores. It is an economy priced item, sell it where people will make it an add-on sale item.
Distribute where current users of Kodak film shop so that they may become acquainted with it and understand its use. Research (goals, methods, etc. ): Research how other companies marketed and sold their economy brand priced film. Find out which consumer would be interested in the film and target them. Use a survey to ask current consumers what price they would be willing to pay for a less premium film, and what they would expect out of it. Run a trial test in key areas and around peak seasonal times.