Eastman Kodak Company – Funtime Film
From: Pavels Kuznecovs To: Inese Eglite RBS Professor, Business Management Riga, 22nd of October, 2009 Case Study 4 Summary: Eastman Kodak Company – Funtime Film Question: Is Kodak accomplishing the appropriate affair with the accommodation to accept band extension: Gold Plus, Royal Gold and Funtime? If we accede aegis and advance of Kodak’s absolute bazaar allotment to be the key cold again the addition of a new cast in the Economy price-tier is a cardinal MUST. It is acute to be presented in the Economy bank which is fastest growing, and represents a articulation with the better competitors.
The key cold for Funtime is to aerate accretion of incremental bazaar allotment from Fujicolor Super G, Konica Super SR and ScotchColor, at the aforementioned time to abbreviate cannibalization of Kodak Gold Plus, the better aggregate antecedent of Kodak. Appraisement action of Funtime is fundamentally correct, as it is aggressive vs. capital players in the Economy bank and is low abundant to differentiate vs. Gold Plus. However, it charge be bright that the amount per backpack should be compared. As mentioned in the case, Funtime is planned to be awash alone in multi-packs of 2 and 4 rolls.In this case an added abatement per backpack is necessary, in adjustment to action an added value.
I advance 10% and 15% discounts respectively. Overall, I accept that multipack action is a actual acceptable footfall to addition artefact loyalty: for instance, a backpack of 4 rolls is about a annual accumulation for 20% of consumers, appropriately preventing any aggressive switching aural 1 year. Branding of Funtime represents a big challenge. On one hand, addition of a new brand-name which is not a band addendum of Kodak is a appropriate decision, as it is an befalling to abbreviate cannibalization of Kodak Gold Plus.Also, it shall not adulterate the exceptional cast angel of Kodak with a advertence to a lower-price product. On the alternative duke Funtime is a absolutely new name, and shall not accept any advantage befalling with Kodak brand. Plus, it is around absurd to body cast acquaintance after any advertizing support, accordingly my advancement is to alter Funtime announcement action and address up to 20% of absolute Kodak advertizing account to Funtime.
Seasonality and availability in bound quantities.I criticize this decision, as I acerb accept that in adjustment to be aggressive in the Economy tier, Funtime needs to be accessible on the on-going base as a approved product. Alternative elements of Funtime business action attending absolutely analytic and justified: ISO 100 and 200 and all-trade distribution. Accumulation allowance implications, Funtime. The alone fair acceptance we can advance from the case accomplishment is that Funtime shall antecedent aggregate from antagonism and Kodak Gold Plus in band with the accepted bazaar shares, i. . 30% of Funtime sales shall appear from competition, and 70% from Kodak products.
In this case, Kodak assets some incremental bazaar allotment points, while it loses on accumulation significantly. Rebranding of Kodak Ektar to Royal Gold. I accept that the appraisement action needs a above revision, as it ability advance to allowance deterioration: - Amount acuteness of a Superpemium customer is low, which is a accepted aphorism for best of customer products.Therefore, I do not anticipate that a amount abridgement to ind. 109 vs. Exceptional is activity to accompany incremental aggregate from Fujicolor Reala. We can alike accept a abrogating customer acumen of Kodak’s super-premium artefact quality, i.
e. Royal Gold to be perceived as a lower-quality artefact vs. the discontinued Ektar. - From the blow of FMCG categories we can see that there is at atomic 15% amount gap in adjustment to differentiate amid price-tiers. In case of Royal Gold it is 9%, which is not enough.Since Kodak’s conducted customer surveys appearance that in absolute 90% are Kodak-loyal or Kodak-positive, we can accept that best of Royal Gold consumers shall about-face to Kodak Gold Plus, which acutely is a abrogating profit-impact aloft Kodak’s portfolio. To conclude, Kodak’s new band addendum action is all-important to bottle the bazaar leadership, while unavoidably shall advance to profit-margin decline, awaiting some abrogating allowance issues can be apparent (Royal Gold).
Overall, I anticipate that a 70% accumulation allowance for a 70% cast is not acceptable in the long-term, as we allege about a awful aggressive and price-driven artefact category.
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