Kodak Company

1.1. a)Competitors provide lover-priced products, b) Restrictions on private labeling, c) Market development strategies of foreign competitors, like Fuji and Agfa.

1.2. If we look at the Product Life Cycle, we realize that it is in the maturity phase. As a result, there is a fierce competition, price war and battle for market share. If Kodak maintains its status quo, it will continue to lose its market share, since the others' market share is growing due to the private labeled and/or lower-priced products. Customers become more price-sensitive. In addition, since buyers are indifferent among products, they can easily shift from one brand to another.

2. Kodak's objective should be to regain the market share of 76% and aim to maintain it for future. Kodak should penetrate into the market more, increase its product variance. (Brand-based differentiation) It should target professionals and serious amateurs. While lowering the gross profit margin Kodak should increase the dealers' margin, give incentives to dealers. Main portion of films are distributes through dept. stores, drug stores, etc. As shown in Exhibit-1, if Kodak increases the dealer's margin from 20% to 29%, the dealers will get the max profit among these brands. In order to attract the price sensitive customers. (demand is elastic) It should also provide lower-priced products and advertise intensively the product's attributes and low price. It should increase per capita consumption of consumer products by providing larger package sizes. (Marketing Mix) It should attend in more sponsorship. They enable Kodak to maximize the product's perception. In the long-run Kodak should switch to market development strategy.

3. With launching Funtime film Kodak has entered to the Economic Brand Tier. It targeted to the Market which consist of the 50% of buyers who are amateur. This product will help to regain market share loss. Kodak will have products that are offered in 3 brand tiers. It will attract price sensitive customers. Value-packs will increase per capita consumption. On the other hand, it may jeopardize sustaining Kodak's reputation or brand image. Since it is offered in off-peak this disadvantage will be minimized.