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Published by: karsubhas on Sep 17, 2010
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Kodak: Changing the Picture
The case begins by recalling Kodak¶s storied history, which began in 1888 with itsintroduction of the Brownie camera priced at $1.00. By 2000,
was one of the mostrecognized and trusted brands in the world.
However, by the year 2000, the company faced many challenges. Its stock price had plummeted, and it had begun laying off workers. Even worse, when the September 11tragedy hit, consumers began to flock to digital cameras, and cell phone manufacturers beganto offer camera phones. As if all that weren¶t enough, Fuji was slowly but surely exposing thecracks in Kodak¶s marketing strategy. This was especially true of the move toward one-hour  photo processing.
In early 2003, the company began a major reevaluation of corporate strategy. In the yearsfollowing,
reduced its dependence on traditional photography. The new direction for the company would focus on non-photographic markets, digital markets (such as inkjet printers and high-end digital printing), and medical imaging. The company would no longer invest in traditional consumer film, which, along with photography, accounted for 70 percentof Kodak¶s revenue and all its profits. By 2004, the company had been significantlyrestructured in a manner reflective of the new strategic directions.By 2006, it appeared that the new strategic plan was not working, as evidenced by heavylosses and a declining stock price.
Discussion Questions
How are the market structure and demand, the nature of the buying unit, and the typesof decisions and decision processes in the proposed commercial and healthcaremarkets as compared with Kodak¶s traditional consumer market?
 In the traditional consumer film market,
had to have its film everywhere. Although it could deal with large chains like Walgreen or Wal-Mart, it had to have its film available anywhere a consumer might need it. Every mom-and-pop drugstore or  grocery store or tourist gift store had to have
film available. As it moves into producing inkjet printers or high-end digital printing products or imaging for healthcare providers, students should see that it would have a smaller number of customers who are very different from the retail stores it traditionally targeted inorder to reach end customers.
o the extent that its customers use the new products it develops in their processes or in products they make for resale, its demand will become derived demand and becomemore price inelastic. We would expect that the demand for consumer film was more price elastic.
he text suggests that the demand for business goods and services would be more fluctuating, although the September 11 tragedy certainly had a profound effect ondemand for many consumer goods.
 As to the nature of the buying unit, as
moves to sell products that businesseswill use in their own work, such as the inkjet printers or x-ray film, it will be dealing with professional buyers versus the individual consumers, who are its traditional customers for its film.
ecause of this, we would expect 
to face more complex, more formal, and longer decision processes.
What examples of the major types of buying situations do you see in the case?
he case discusses Walgreen¶s efforts to install one-hour photo-processing systems inits stores. It approached 
and asked them to help with this.
his is a new-task buying situation where
had to develop a new system for its customer. It  purchased the machine from a Swiss manufacturer and provided the service and  financing itself.
ecause of problems Walgreen experienced with the
system, it approached  Fuji. We can assume that Walgreen asked Fuji to provide machines that would solvethose problems.
his is an example of a modified rebuy, even though Walgreen was switching suppliers. It was using its experience with the first system to makemodifications that would improve the system. Students will also suggest that Kodak¶sattempt to offer kits that would modify its mini-labs so they could handle digital printsis an example of a modified rebuy.
he case indicates that Walgreen first installed the Fuji machines in its stores.
his isanother example of a new task purchase.
hen, it began to spread the machines to itsother stores. We can assume that this has resulted in a straight rebuy as Walgreen simply placed orders for additional machines.
 Fuji¶s development of a Web site for Walgreen is also an example of a new task  purchase.
How might
have made better use of the buying center concept in order tomore effectively meet the needs of its commercial customers?
 In its traditional markets,
had established buying processes with customerswho knew
and its products. Walgreen, for example, had an established relationship with
. Kodak¶s sales force was familiar with their customers and knew how to work with them.
moves into new products that target new markets, it will have to developnew relationships. Not only will these be relationships with new customers, but also it will be offering new types of products and services that its sales force is not used to selling. Selling inkjet printers to a company for its own use or to a company like
uy for resale is a very different process than selling film. Selling x-ray film for use inmedical offices or hospitals will require Kodak¶s sales force to develop an entirelynew set of customer relationships.
 For each of these new customers, Kodak¶s sales force will face a new buying center. At each customer, there will be different people with different roles²different buying centers. At each customer, members of the buying centers will have different environmental, organizational, interpersonal, and individual factors at work.
 In addition, each customer will have a different business buying process.
he waysthey specify, search, solicit, and select suppliers will be different.
his discussion should help students appreciate how difficult Kodak¶s transition is going to be. Even though it has been involved in organizational buying in itstraditional film business, its new products and services will be different and will target different organizations.
his will be a great challenge for both the companyand its field sales force. As noted in the case,
will be entering markets wherethere are strong, established competitors and where its brand reputation is not developed.
With respect to Kodak¶s industrial commercial customers, how is the buying processdifferent for their current situation relative to their old business model?
he old business model referred to is that of the traditional ³film, chemicals, and  paper´ structure that 
followed for decades.
he new model is the structure of imaging, commercial print, medical, and traditional film. With this change in structure, to some extent, the customers are different.
ut as traditional film phasesout, even the customers who are the same are buying different products to satisfydramatically
hus, students can be led through the eight stages of the business buying process and  prompted to consider differences at each stage. Consider an example based on anindustrial customer (a large corporation, for example) of digital printing products. Note how this process is different from a company¶s photographic needs 15 or 20 years ago.
he problem being recognized is one that did not even exist with customersunder the previous corporate model (e.g., the company has numerous sources of digital images and needs to be able to print selections quickly and reliably).
herefore, the company¶s needs are going to differ dramatically. Additionally, thecompany is going to be considering a dramatically different set of potential suppliersboth in terms of type and quantity.
What marketing recommendations would you make to Antonio Perez as he continuesto try to turn things around at

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