Nowadays, these mistakes can be prevented due to promotional risk management companies such as PIMS-SCA which help promoters to maximize their promotional budget while offering balance sheet protection. It understands and explores the risk promotional risks for the benefit of the brand, being a very useful marketing tool. This fiasco ensured a new rule in marketing: Always make sure the free item given away never exceeds the cost of the product it is paired with.
Kodak failure
Kodak is an American photographic equipment, materials and services company, best known for its photographic film products. It once held a dominant position in the photographic film industry, having a 90% market share of photographic film sales in the US during and the so called “Kodak moment” became a tagline and a symbol of what was once one of the world's top five most valuable brands. In the nineteenth century, merely seeing an image was like seeing magic being performed. Kodak provided the technology to make this magic commonplace. The company that George Eastman started over 130 years ago was to become part of the lives of everyone who wanted to take pictures of events both special and mundane. Indeed, the fact that it also sold the film - its Kodachrome was accepted as the best available - meant that Kodak grew to a position that made it unassailable. In 1976 in America Kodak accounted for 90% of film and 85% of camera sales. Kodak was a brand that was both profitable and enjoyed high levels of sentiment from customers. So, having in mind all of the huge success the company had, we obviously are wondering what could have happened that put Kodak in front of bankruptcy in 2012.
Resistance to change, a missed opportunity, failing in adapting to customer attitudes and to a quickly changing marketplace-were the main reasons that lie behind Kodak failure.
First, Kodak’s success is actually its main cause of failure, since it made it resistant to change. Its insular corporate culture believed that its strength was in its brand and marketing, and it underestimated the threat of digital. Quite surprisingly, first digital camera was invented by Kodak way back in 1975, but it did not capitalize on its pioneer invention. It was reluctant to let go its film business, which was too lucrative to give up and did not considered vital the transition from analog to digital.
Steve Sasson, the Kodak engineer who invented the first digital camera in 1975, characterized the initial corporate response to his invention this way: “But it was filmless photography, so management’s reaction was, ‘that’s cute—but don’t tell anyone about it.”
Kodak management’s inability to see digital photography as a disruptive technology, even as its researchers extended the boundaries of the technology, would continue for decades. As late as 2007, a Kodak marketing video felt the need to trumpet that “Kodak is back “ and that Kodak “wasn’t going to play grab ass anymore” with digital. It included public images such as Rihanna in order to help them reestablish their image and position on the market. However, it’s too late but yet they stayed in denial for so long. The reason is the following: Vince Barabba, the 1981 head of market intelligence of Kodak stated that around the time that Sony introduced the first electronic camera, one of Kodak’s largest retailer photo finishers asked him whether they should be concerned about digital photography. With the support of Kodak’s CEO, Barabba conducted a very extensive research effort that looked at the core technologies and likely adoption curves around silver halide film versus digital photography. The results of the study produced both “bad” and “good” news. The “bad” news was that digital photography had the potential capability to replace Kodak’s established film based business. The “good” news was that it would take some time for that to occur and that Kodak had roughly ten years to prepare for the transition. The problem is that, during its 10-year window of opportunity, Kodak did little to prepare for the later disruption. Rather than preparing for the time when digital photography would replace film, Kodak chose to use digital to improve the quality of film. This strategy continued even though, in 1986, Kodak’s research labs developed the first mega-pixel camera. The choice to use digital as a prop for the film business culminated in the 1996 introduction of the Advantix Preview film and camera system, which Kodak spent more than $500M to develop and launch. Yet it still used film and emphasized print because Kodak was in the photo film, chemical and paper business. Advantix flopped. Why buy a digital camera and still pay for film and prints? In 1989, the Kodak board of directors had a chance to take make a course change when Colby Chandler, the CEO, retired. The choices came down to Phil Samper and Kay R. Whitmore. Whitmore represented the traditional film business, where he had moved up the rank for three decades. Samper had a deep appreciation for digital technology. The board chose Whitmore. As the New York Times reported at the time, “Mr. Whitmore said he would make sure Kodak stayed closer to its core businesses in film and photographic chemicals.”
In changed times, companies should focus on their core business and customer satisfaction rather on just selling more products. Dozens of companies set their priorities right and were able to reap magnificent benefits out their right approach. For instance, had Hollywood moguls not identified entertainment as their core business, they would not have been even closer to what they are today.
Kodak made a big mistake of not asking the right question. Instead of focusing on its core expertise of storytelling, it focused on selling more products. Adapting to changing market trends has proven to be very important for companies. They need to adapt even if it means overhauling themselves. Technology can be beneficial, but it can be disruptive as well; as seen in the case of Kodak. Mere survival is not an option anymore; companies should focus on innovation and entrepreneurial greatness. Executives at Kodak wrongly took marketing as only an art of selling more products. Satisfaction of customers must be the primary motto of every marketer. These days, customers tend to have loads of options. In case a company does not give them what they want, they are not going to come back. Unfortunately, the company had the nearsighted view that it was in the film business instead of the story telling business, and it believed that it could protect its massive share of market with its marketing. Kodak thought that its new digital technology would cannibalize its film business. Sony and Canonsaw an opening and charged ahead with their digital cameras. When Kodak decided to get in the game it was too late. The company saw its market share decline, as digital imaging became dominant. This blind faith in marketing’s ability to overcome the threat from the new technology proved fatal. Kodak failed to adapt to a new marketplace and new consumer attitudes. Kodak made a classic mistake: it didn’t ask the right question. It focused on selling more product, instead of the business that it was in, story telling. Companies have to adapt to the requirements of the market, even if that means competing with themselves. Technology has the potential to be disruptive of markets and companies, at the same time that it is benefiting consumers. Survival is not a likely strategy in today’s marketplace. In this environment, marketers should strive for entrepreneurial greatness and innovation, not to just determine preference among existing options. In an age in which the consumer is in charge, approaching marketing from the perspective of products or services alone is not enough to make consumers want to engage.
They suffered from a mentality of perfect products rather than the high-tech mindset of make it, launch it , fix it”
Weakness: short vision, slow responses, outdated brand association, financial problems
Opportunities: smart phones, emerging markets.
Threats: intense competition(canon, Fujifilm), Rapid changes in technology
Recommendation: re-structure, consistency, long-term goals, reinvigorate brand image, partner with mobile phone company(lg)develop with social media
Kodak began to struggle financially in the late-1990s as a result of the decline in sales of photographic film and its slowness in transitioning to , despite having invented the core technology used in current digital cameras. 2007 was the most recent year in which the company made a profit. As part of a turnaround strategy, Kodak focused on digital photography and and attempted to generate revenues through aggressive . In January 2012, Kodak filed for bankruptcy protection. In February 2012, Kodak announced that it would cease making digital cameras, pocket video cameras and digital picture frames and focus on the corporate digital imaging market. In August 2012, Kodak announced it is planning to sell its film, commercial scanners and kiosk division. Motion Picture Film will remain Kodak owned
by
marika08 (student)
