Management Development Institute, Gurgaon

Name of Programme:- PGDM 2021-23

End term Examination, Term-II
Name of the Course:- MPI
Name of the course Faculty:- Prof. Chinmaya Kulshreshta

Name:- Debi Prasad Panda Roll Number:- 21P075

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Q1. Analyze the alternatives available to Kodak for solving its problems and recommend the
way forward for Kodak.
Ans:
To arrive at the most suitable option for Kodak, we will first look at the SWOT analysis of the company,
followed by the analysis of the strategy given in the case. Lastly, we will see some recommendations.
SWOT:
● Strengths- High brand value, High market share, High gross margin
● Weakness- High price compared to quality, Low growth rate compared to others, High operating
costs
● Opportunities- Strengthening customer loyalty, Stimulating market growth, Targeting upcoming
photographers
● Threats- Low growth in the film market, Lower dealer margins as compared to competitors, Private
Labels and low prices offered by other competitors , Increasingly price sensitive consumer base

Considering the current position of Kodak the company has the following alternatives in front of it
going forward:
● Maintain status quo and introduce no new products with existing products in the same segment
● Introduce no new products and cut prices of Gold Plus to cater to both economy as well as Premium
segments
● Introduce Funtime for full year
● Introduce Funtime for just off peak seasons with No advertising
● Introduce Funtime for just peak seasons with little advertising

Alternative 1- Maintain status quo with products in the same category

This alternative doesn’t seem to be viable because the company has already been using this alternative for the
past 5 years and this has seen the company’s market share fall from 76% to 71%. Also since the industry is in a
maturity stage already it doesn’t make sense for them to not introduce new products and get into the decline
stage and be forced out of the market. In such conditions innovation is the key be it in the form of technology
or in the form of prices. Since the other brands are growing at a rate almost 5 times the growth rate of Kodak
this would mean further decrease in Kodak’s market share eventually

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Alternative 2- Cut the prices of Gold Plus and introduce no new product
Current prices of Economy brand products are at 17% below the price of Gold Plus and if Gold Plus brings its
prices down completely to that level then it will leave the market of the premium segment and enter the
economy segment completely which is not viable. Another option is to decrease its prices by less than 17% but
very close to it like 13 or 14%. Bringing a 13% price cut will decrease its price to $3 which will cater to the
economy segment and will also maintain a premium position as compared to fuji with a price of $2.91 , it’s
profits and contribution margin might decrease which can be offset by increase in the sales and market share.
But it will have an impact on the image of the brand as people who have always perceived it to be a premium
brand will start questioning its premium and will not consider it to be worth spending money on. From a
customer psyche point of view this option doesn’t seem to be viable.

Alternative 3- Introduce Funtime for full year

The next alternative in front of the company is to introduce Funtime as the product catering to the economy
segment while the other products will be continuing their fights in the other segment. The plan is to introduce
Funtime for a full year with little advertising budget spent on Funtime close to around 4-5%. The benefit of
this alternative will be that since Funtime will be a brand catering more to the everyday use of the customer
capturing daily picturable moments it makes sense to make the product available for complete year competing
with the competitors like Fuji but considering the distribution of customers on the basis of their loyalty to
products it will attract only 10% of the people who are the price sensitive ones and people may even switch over
from Gold Plus to Funtime which is the kind of cannibalisation that the company might not want at this stage
but the company maintains its premium position with this strategy and also gives a fight to the competitors.

Alternative 4- Introduce Fun Time for off peak season with no advertising
This alternative doesn’t make sense and looks like a wild attempt by the firm which wants to desperately
increase its market share by giving away products for just 5 months of the year with no advertising which
would mean lower cost but would also mean low awareness and also the fact that its competitors like Fuji
would be there in the market at all times of the year so a limited availability might not let it survive in the
market.

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Alternative 5- Introduce Funtime for peak season with little advertising
In this alternative the company can introduce Funtime just peak seasons with a share of advertising budget also
for Funtime. Spending on advertising like its competitors have done will mean that it will be able to gain
awareness in the market but again giving the product for limited times of the year might make it lose out to its
competitors because of lack of time flexibility which is an important aspect of a product and considering the
fact that the product is more for everyday use than for special occasions which do not have much peak and off
seasons.
Ektor Brand Repositioning strategy:
● “Ektor” super-premium brand to be repositioned as “Royal Gold”
● Ektor was positioned as a film for serious amateurs and professionals. The new positioning of Royal
Gold would be as a film for special occasions like Graduation and birth of a baby.
● Pricing for Royal Gold would remain the same as Ektor at $4.27
● 40% of the advertising budget would be given to Royal Gold.

Some points to think about in this strategy are:

● If Royal Gold is for special occasions, it might send a message that Kodak has discontinued its lines for
professionals. This might have a negative impact on the brand value
● The change in name actually lessens the already low differentiation that is present with Kodak’s line.
Consumers might confuse it with Gold Plus.

RECOMMENDATION:
Considering all the alternatives that the company can have with it Alternative 3 which is to introduce Funtime
for complete year with little advertising budget seems to be more viable to me as the company can fulfil its
objective of increasing market share and might be able to maintain its profitability as well or be back at the
same profitability after some time and also competing with the competitors.
This alternative also seems to go well with the product usage by the customers for their daily use which should
be available to them whenever they need it. The company must follow a more intensive distribution strategy
for the same as compared to Gold Plus and might even choose to price it not necessarily 20% below Gold Plus
but around 15-16% might also work giving a tinge of Kodak’s premiumness to the product as compared to
competitors like Fuji.

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DETAILED RECOMMENDATION:

● Do not launch Funtime. This strategy includes a very high risk of cannibalization. Whereas the
probability that Economy consumers might switch to Kodak Funtime is low.
● Do not reposition Ektor. Kodak should rethink the strategy as it lessens the differentiation and puts it
as a company that is not catering to professionals. This will tarnish the brand perception as a quality
film maker.
● As mentioned in the case, 40% of the user base was sampler and was heavily reliant on Kodak. Kodak
should look into designing customer loyalty programs to convert these samplers to Kodak Loyals.
● The VP of Kodak consumer imaging stated that he was treating Funtime as a special promotion.
Kodak could use the same idea and offer Gold plus at a promotional price for shorter off-season
periods, while doing away with Funtime.
● To cement the super premium differentiation, Kodak can consider naming Ektor as “Kodak
Platinum”, a clear demarcation from Gold plus.
● Kodak should focus more on its strengths of brand value and invest in advertising accordingly. The
brand perception would be to be a brand “recommended by professionals” and of “superior quality”.
● Kodak should invest in R&D to create differentiation in its products and line up. The premium films
should carry some distinguishable advantage over the economic segment.