Management Development Institute, Gurgaon

Name of Programme:- PGDM (2021-23)

End-term Examination, Term 2
Name of the Course: Marketing Practices and Implementation
Name of the Course Faculty: - Kirti Sharma, Chinmaya Kulshrestha, Ritu Srivastava

Section – B
Nature of Exam:- Closed book Date & Time of Examination: Sat., January 29, 2022
Time: 2:15 pm – 4:45 pm Total marks: 30
Duration: 2.5 hrs. (150 minutes) Weightage: 30%

Name- Atul Jhunjhunwala Roll no. 21P071

Instructions:

I. This is a Close book examination. The answers need to be typed. You can make
diagrams by hand or paintbrush. The answer sheets are subject to plagiarism check. If
there is any similarity with the solution available on the internet, then the ‘answer
sheet’ will be cancelled and marked ‘F’. There is no room for ambiguity. Please do not
seek any additional clarifications. Avoid copying verbatim from the Case too.
II. In case your answers are similar to any other classmate, in that case, all such answer
sheets will be cancelled.
III. Answer all questions. Try to be articulate in your responses before writing. In your
attempt, be thoroughly rigorous in your analyses and be very specific in your replies. Do
not merely repeat the case facts. Avoid being verbose.
All the questions are based on the case entitled “Eastman Kodak Company: Funtime
Film”.

IV. You are expected to write not more than the word limits specified in response to each of
the questions. If you exceed these limits, the examiner will be free to ignore your
responses. The marks assigned to each question are also indicated for the questions
separately.
V. Anyone who resorts to unfair practices, as judged by the Proctoring report/invigilator(s),
will be liable for a minimum penalty of a nil score in this segment of evaluation, while
the maximum penalty could be expulsion from the institute. There will be no further
warnings.

Exam Assignment
Q1. Analyze the alternatives available to Kodak for solving its problems and recommend
the way forward for Kodak. (Limit Max. Three sides of A4; 20
marks)

To determine the best alternative for Kodak, we will first examine the company's SWOT
analysis, followed by an examination of the plan presented in the case. Finally, we'll look at
some suggestions.
SWOT:
● Strengths- High brand value, High market share, High gross margin
● Weakness- High price compared to the 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 a 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 option does not appear to be practical because the firm has been utilising it for the past 5
years, during which time its market share has fallen from 76 per cent to 71 per cent. Also,
because the sector is now mature, it makes no sense for them to stop introducing new items and
risk going into decline and being driven out of the market. In such circumstances, whether in
terms of technology or pricing, innovation is critical. Because competing brands are increasing
at over 5 times the pace of Kodak, this means that Kodak's market share will eventually decline.
Alternative 2- Cut the prices of Gold Plus and introduce no new product
Economy brand items are now priced at 17% less than Gold Plus, and if Gold Plus lowers its
pricing to that level, it will exit the premium area and enter the economy segment, which is not
feasible. Another alternative is to lower costs by less than 17 percent but close to it, such as 13
or 14 per cent. Bringing a 13% price drop will lower its price to $3, which will appeal to the
economic sector while also maintaining a premium position when compared to Fuji, which has
a price of $2.91. Profits and contribution margins may suffer, but this will be compensated by
increased 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 a 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 based on 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.

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 the
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 because the product is more for everyday use than
for special occasions which do not have many peaks 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 hurt the brand value
● The change in the name 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 a 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 premium per cent, to the product as compared to competitors like Fuji.

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 filmmaker.
● As mentioned in the case, 40% of the user base was a 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.
Q2. How will the branding of Funtime impact Kodak?
(Limit Max. Two sides of A4; 10 marks)
The issues are spread across 3Ps of the marketing mix in the case of Funtime when
compared to its peers for the category.
The presentation of a lower-evaluated film may bring about brand weakening and consequently hazard
lessening client reliability (which is basically half as of now). The presentation of Funtime may rip apart
deals of Gold Plus - particularly among Kodak followers. Purchasers might purchase Funtime in mass
and this could eat into Gold Plus deals in any event, when Funtime's not being sold. This is particularly
unfortunate as Funtime has lower edges than Gold Plus. The most extreme cannibalization of deals by
Funtime of other Kodak brands could be pretty much as high as 29 %. The restricted; discontinuous
accessibility of Funtime, combined with a potential expanded craving for low evaluated film, may urge
clients to change to rivalries' items without a trace of Funtime. Inside the Economy brands, ScotchColor
is valued lower than Funtime ($2. 69 versus $2. 79. see Appendix C for retail value estimation of
Funtime) making showcasing to value touchy clients troublesome. Without even a trace of publicizing
and advancement of Funtime, there is a danger of clients not understanding the innovative edge and
brand advantage Funtime has over its friends.
Price: The pricing has been based on the Gold Plus which in the premium category was the cause
making Kodak the market leader despite loss in market share overall. The prices of Funtime were higher
than the category average and therefore may not be accepted.
Place: The Channels and medium were not favourable for the rebranding strategy to take place. It
possibly could make no difference in the consumers’ minds who sought to consume films as a
commodity.
Promotion: Not allocating any funds for promotion disassociates the product from the Kodak brand thus
the rebranding strategy may not be effective at all
Additional Pointers:
Also as per Consumer Reports, there is seemingly no difference between the economic offerings of Fuji
(Fujicolor Super G) and Konika (Konica Super SR) and the premium offering of Kodak (Ektar) even
though the former was priced around 32 % lower than the latter. So, Kodak cannot afford to compromise
on the quality of Funtime if it wants to make a mark in the economic market.
Consumers were becoming increasingly price sensitive. Amateur photographers preferred ISO 100 and
200, so a competitive pricing strategy would benefit the company to stay on relevant terms with the
market. Kodak’s customer base consists of only 50% loyal Kodak customers. While these are primarily
from the premium and super-premium brands, Kodak would want to acquire the growing
economy-minded consumers to halt the fall in market share.
Funtime’s marketing plan has no advertising budget associated with it. This may not be the best possible
strategy since consumers would need to be aware of the product before buying it in the short windows
available for purchase. Another important aspect would be to understand the consumer mindset. Since
the target consumers are economy-minded, purchasing a camera is not a spontaneous decision for them.
So a sudden appearance of a Kodak product without any advertisement may lose Kodak potential
customers
While Funtime has been slated to be available to all classes of trade, it might pose a challenge in two
aspects:
● If the quality of the product does not feel premium enough, professional photographers won’t
have an incentive to buy them.
● Since professional photographers buy super-premium products mainly through camera shops,
keeping Funtime within those shelves not only increases inventory costs but also increases other
related operational costs.
As seen, this was a case of product development and not market development. Therefore the strategy
should have provided for the product to become an alternative in the lean periods of the other Price
brands. This is not likely to happen with the strategy and should be chucked off to save costs instead.
The saved costs of producing this category can be used to promote the rebranded super-premium
category Royal Gold which was to replace Kodak Ektar, invoking a need for integrated communication
to make people aware of the rebranding.
People view buying camera film as a commodity and Brand name plays an important role in consumers’
minds. As people’s standard of living increased, more people began using cameras and camera films for
amateur and home purposes than just professions – this category would not spend on premium brands
and was being captured by competitors The latter was the reason why despite Kodak being the key
market player, its share had dropped from 76% to 70% in merely 5 years. Thus, introducing the Funtime
economy brand will be a good move for Kodak. The detailed impact analysis for Funtime’s marketing &
branding is as follows:

Brand Name As consumer behaviour analysis showed, people want to use a trusted brand but at the same
time are price-conscious. Kodak should launch Funtime with the name “Kodak Funtime” so that the
connection to the parent brand is maintained. Consumers would prefer the Kodak name over other
economy players. There may be some cannibalization of the Gold Plus category – while professionals
would not shift, amateur photographers who only but Gold Plus for the Kodak name could move to
Funtime.

Pricing & Packaging Funtime is priced in the economy Brand Tier at a price 20% below Gold Plus on a
per role basis. At this point, Kodak can compete with other players and gain a foothold in the economy
market, allowing it to regain market share by targeting leisure/non-serious photographers. As it will only
be offered in “value packs”, it will further drive home the point of being a “good deal” in the minds of
consumers - of getting a trusted brand’s product at an affordable rate.

Quality Funtime will only be offered at ISO 100 and 200. But since it’s targeted towards the amateur
segment, they would not look for higher ISOs either way – for them, photography is primarily to capture
moments at an affordable rate. Thus, keeping fewer SKUs will help the company keep production costs
down for the new brand.

Advertising Support Kodak has decided 0 advertising support for Funtime, but introducing a new brand
with no advertising/marketing would not be a wise move, as people would not be aware of the low-price
and “value” nature of the product. Instead, it should hammer down on these points to attract amateur
photographers. Kodak has decided to have Funtime available in limited quantities only and during
off-season times (for 2-3 months beginning in April, and again for 2-3 months beginning in September).
The benefit of selling Funtime only in the off-season would be that during in-season times where people
want to capture “occasions”, they would have only Gold Plus as the option. However, commodity brands
are a consumer habit, i.e., people tend to stick with a single brand and maybe disgruntled if they can’t find
it in the market. Thus, Kodak should keep year-round availability for Funtime, and work on occasions
marketing for Gold Plus during in-season. As an economy brand, Funtime should be available near the
checkout counter to leverage impulse purchasing at affordable places like department stores, drug stores,
supermarkets and convenience stores.