Eastman Kodak

2173 Words Mar 12th, 2012 9 Pages
Harvard Business School 9-594-111
Rev. May 8, 1995

Eastman Kodak Company: Funtime Film

On January 25, 1994, George Fisher, Kodak’s recently appointed chief executive officer, met with analysts and investors to set out Kodak’s new strategy for film products. During the past week (between January 17 and January 24), Kodak stock had lost 8% in value on rumors of a price cut on film.

While Kodak continued its overwhelming domination of the photo film market, its market share in the United States had eased from about 76% to 70% over the past five years “as competitors like Fuji Photo Film Co. and Konica Corp. wooed consumers with lower-priced
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Both sold cameras and other imaging products as well as film. Fuji’s worldwide sales of $10 billion made it half Kodak’s size. Fuji started its serious incursion into Kodak territory in 1984, when it captured consumers’ attention, particularly in the United States, by becoming the official film of the 1984 Summer Olympics in Los Angeles.

Both Fuji’s and Polaroid’s U.S. dollar sales grew at over 15% in the past year, compared with Kodak’s 3% growth rate. An industry expert opined, “Fuji’s gains can be largely attributed to the marketer’s ability to keep the line on price, an area where Kodak has suffered.”2 Private labels as a group grew about 10%.

Category Pricing

Kodak’s Gold Plus brand was the standard of the industry. Exhibit 1 shows the average retail prices for a single 24-exposure roll of ISO 100 film. (ISO refers to the “speed” or light sensitivity of the film. Amateurs typically use 100, 200, or 400, with 100 being the most popular. Higher-ISO films performed in lower light conditions, but were more expensive.)

As shown in Exhibit 1, there were four price tiers in the market. Kodak Gold Plus, the largest-selling brand by far, set the Premium Brand price at $3.49. Kodak’s gross margins were believed to be about 70%. Both Kodak and Fuji offered superpremium brands targeted very narrowly at advanced amateurs and professionals. These products were distributed mainly through camera shops and were not major

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