Key Issues Facing the Industry and Kodak - Case Study Example

The Market Situation of Kodak Name Course Name and Code Instructor’s Name Date Table of Contents Table of Contents 2 The customer context 3 The business context 4 The internal context 5 The external context 6 Political 6 Economic 6 Social 7 Technology 7 Legal 7 Environment 8 Key issues facing the industry and Kodak 8 Marketing communication objectives 9 References 12 The customer context Kodak was believed to be the foremost imaging innovator by 2007. The firm recorded overall sales of $10.3 billion in 2007 (Pham-Gia, 2009). The firm is committed to a digitally oriented growth strategy and focuses on helping customers to better use meaningful images and information in their life and work (Kodak, 2011). Customers use Kodak’s system of digital and traditional products and services to take, print and share their pictures anytime and anywhere (Comon, 2007). The firm communicates with customers by use of Kodak solutions for prepress, digital and conventional printing and document imaging (Sheppard, 2008). In addition, creative professionals employ Kodak technology to uniquely communicate through moving or still images (Fandel, 2007). Most customers of Kodak limited (UK) argue that the firm ought to continuously embrace change and expand services to differentiate and grow their businesses (Pham-Gia, 2009). They argued that the first step need to involve thorough examination of the firm’s operations, determination of resources and technology needed to put in place to support the firm’s business (Meehan, 2007). Kodak has a blog called Grow Your Biz which enable people to grow their business. The sight allows Kodak employees and experts to share their insights about products, services, technologies and the graphic communication business (Aranson, Spetner and Ames, 2010). The blog also allows readers to share their passions about everything print and more. In spite Kodak’s efforts to be customer centered firm, its efforts seems to be thwarted by its customer service department (Hildebrand, 2009). It seems the firm’s customer service is inefficient and most customer reviews indicate that they are insensitive customer’s concerns. This seems to reduce customer loyalty to the brand (Brown, 2007). The business context Kodak is mainly involved in the development, manufacture and marketing of consumer, professional, health and other imaging products and services (Fandel, 2007). The firm has three segments: the digital and film imaging segment, the health group segment and the graphic communication segment. The digital and film imaging segment is involved in the provision of consumer oriented traditional and digital products and photographic services such as photofinishing services and supplies, film and digital cameras (Comon, 2007). The health group segment is involved in provision of analogue products such as medical films, chemicals and processing equipment and services and digital products such as RIS, PACs, digital x-ray and output hardware supplies (Pham-Gia, 2009). On the other hand, the graphic communications segment is involved in the provision of inkjet printers, digital imaging systems, high speed production document scanners and products aimed at the commercial print market. In recent past the demand for digital cameras has been on the rise in UK. This has resulted in a fall in demand for analogue cameras (Pham-Gia, 2009). As consequence other the demand for accessories such as inkjet printers and products aimed at the commercial print market are on the decline. This implies that the revenue of Kodak in this segment is on decline and hence need for more investment and innovation in the area of digital services and camera production (Comon, 2007). In order to compete favorably in the remaining market for printers, Kodak has come up with some of the best printers in the market which has impressed the market. the firm understands that customers frequently replaces cartridges and as such it has come up with a marketing strategy where consumers are required to pay a little more for the printer but less than its competitors for ink cartridges (Fandel, 2007). In UK the printers from Kodak retail from £60 for the basic entry level Kodak printer to about £200 for a top of range model. The Kodak cartridges are combined color cartridge which requires that the user replace all of the colors when one runs out because they are built into the same cartridge The internal context Kodak Limited is a subsidiary of the Eastman Kodak Company based in the United States. It is the largest and oldest of the parent company's subsidiaries. The firm started its operations in Britain in 1891. Employees at Kodak limited (UK) believe that the firm can enable one to become more creative in a remarkably advanced technical environment. Kodak limited has over 5000 employees in the UK and their contribution is recognized by the parent firm. Employees at the firm are given challenging tasks and their performance is rewarded accordingly (Comon, 2007). The firm employs people with diverse backgrounds and skills in an organization culture that enables employees to apply their collective talents to a shared objective that allows the firm to deliver the greatest value to shareholders and customers (Fandel, 2007). the firm and its workforce works hard to support an inclusive culture which acknowledges differences via action, cultivates unique thinking and values diverse perspective on common business goals. As a consequence employees at Kodak are loyal, committed, and innovative and thrive on challenge. The commitment and expertise of Kodak employees have enabled the firm to become a world leader in imaging. The firm pays its employees an attractive salary and benefits package that is designed to meet the needs of the firm’s workforce (Pham-Gia, 2009). The firm also has other benefits such as a contributory pension scheme and a private health care cover after two years of service. The firm also offers its employees a long term career opportunities and ensure that all of its people receive a minimum of 40 hours of training and development every year on the basis of the business and individual needs. This may include on the job training, conferences and seminars (Comon, 2007). The firm also offers flexible working g hours to its employees to enable them to combine a career with child care commitments or care of dependant relatives. Kodak also supports equal opportunity policy and as such it partners with the Scope Fast Track initiative to provide work placement and experience for graduates with disabilities (Fandel, 2007). The employees at the firm are entitled attractive holiday package and have the opportunity to utilize the Kodak social and leisure facilities and staff shops (Eastman Kodak Company, 2007). The external context Political Political factors that can impact on a business include current and future taxation policies; current and future political support; trade bodies, grants, initiatives and funding; and the effect of worsening relations or wars with certain countries (Comon, 2007). The operation of Kodak in UK enjoys the political stability in the country. Economic Economic factors entail the general economic situation; consumer spending strength, current and future government spending levels; the ease by which people can obtain loans; the current and future level of inflation, unemployment and interest rates; specific taxation policies and trends and exchange rates (Fandel, 2007). The current economic turmoil in European region implies that the purchasing power of people in UK is greatly affected (Gordon, 2010). As a consequence sales of Kodak product are likely to dwindle. Since digital cameras are mostly employed by tourists, the amount of money to be spent on leisure is likely to be low in these hard economic times and hence the camera sales from the firm are likely to drop due to this (Pham-Gia, 2009). Social Social factors which affect business include demographic factors; lifestyle patterns and changes in attitudes towards issues such as corporate responsibility, education and the environment; social mobility; ethnic and religious differences and media views and perceptions. Digital cameras have been employed in social sphere of life (Comon, 2007). The cameras are employed for filming and taking photos of special occasion. The fact that such photos can be integrated in social networks such as Facebook implies that the digital market for digital camera is bound to grow (Eastman Kodak Company, 2007). Thus, the competitiveness of Kodak cameras will determine their success in their adoption for social functions. Technology Technological factors that affect businesses include relevant current and future innovations in technology; the level of funding of research; the way in which consumers make purchases; intellectual property rights and copyright infringements and global communication technological advances (Pham-Gia, 2009). Kodak is touted to be one of the greatest innovators in the imaging industry (Fandel, 2007). The fact that the firm embraces technology and uses modern technology to produce its products is bound to help it win over more customers. Legal Legal factors that impact on businesses include legislations guiding areas such as competition, employment and health and safety; future changes in legislation; changes in European laws; regulatory bodies and trading policies (Comon, 2007). The firm has in recent time turned around in its strategy and has turned to aggressive litigation in order to generate revenue. Since the firm holds a diverse range of patents in imaging industry it is bound to reap much revenue on these patents. Environment Environmental factors which impact on businesses include the level of pollution created by the utilization of the product or service; recycling considerations; current and future environmental legislative changes and attitudes from the media, consumers and government. Kodak is committed to environmental, health and safety excellence. Thus the firm is committed to global sustainability (Fandel, 2007). This commitment is advantageous to the firm since it enables it to win over environmentally conscious customers. Key issues facing the industry and Kodak One of the key threats to imaging industry is the camera phones. Till recently, camera phones looked likely to remain inferior to digital cameras as image capture devices (Eastman Kodak Company, 2007). It has also heralded that brand relationship is an issue that really matters for marketing managers (Pham-Gia, 2009). It is argued that strengthening brand relationships with customers has direct implications for long term success of a brand. Kodak faces competition from other imaging companies such as Fuji and Sony. The company is also being challenged by HP on its promise to customers that consumer can save money by purchasing Kodak printer (Comon, 2007). HP argues that the promise by Kodak that consumers can save up to $110 per year is unattainable and that consumers will have to print four pages per day to save that much which is far less than what average consumers print per day. The quality of the inkjet is also criticized for being lower in comparison to that of its competitors even though it costs slightly lower. Marketing communication objectives These are the results that a firm intents to accomplish through its promotional program. Consumers usually respond in terms of hierarchy of effects (Comon, 2007). This is the sequence of stages through which a prospective buyer goes through. The hierarchy of effects includes awareness, interest, evaluation, trial and adoption (Fandel, 2007). The following will be the marketing communication of Kodak. 1. Awareness: Being an old product in the market, creation of awareness about Kodak among UK citizens will target groups which are not yet aware of the new products offered by Kodak in terms of digital cameras and digital printers and its advantages over other products in the market. Our campaign aims to increase awareness by 60% within UK imaging market. 2. Interest: This comes after creation of awareness to enable the customer to build desire for the product. With an increased of awareness by 60% of the Kodak digital cameras and digital printers, it is expected that 40% of these will interested in the Kodak digital cameras and digital printers. 3. Evaluation: with 40% of new customers interested in the Kodak digital cameras and digital printers we want them to evaluate, that is, to compare the Kodak digital cameras and digital printers to other digital cameras and digital printers available and our digital cameras and digital printers to make their list of possible choices at least 30% of the time. 4. Trial: this is the most vital stage of purchasing. After evaluating the Kodak digital cameras and digital printers, customers ought to select them over other digital cameras and digital printers at least 20% of the time because of their high reliability, competitive pricing and ability of customization to meet customer’s social needs. 5. Adoption: as the consumers use the Kodak digital cameras and digital printers, their friends will be able to experience Kodak digital cameras and digital printers in a real time situation. We intent to built adoption of more than 75% which will mean that the consumer will buy Kodak digital cameras and digital printers and have positive response to the imaging services provided by these products. References Aranson, M., Spetner, D., and Ames, C. 2010. The Public Relations Writer's Handbook: The Digital Age, 2nd Ed. New York: John Wiley and Sons. Brown, M. 2007. Baldrige Award Winning Quality: How to Interpret the Baldrige Criteria for Performance Excellence, 16th Ed. London: Productivity Press Comon, P. 2007. Kodak the Art of Digital Photography: Digital Photo Design: How to Compose Winning Pictures. London: Lark Books Daft, R., and Marcic, D. 2008. Understanding Management, 6th Ed. London: Cengage Learning Eastman Kodak Company. 2007. Kodak New Pocket Guide to Digital Photography: Quick Advice on Getting Great Pictures! London: Lark Books Fandel, J. 2007. George Eastman and the Kodak Camera. London: Gordon Purcell. Gordon, E. 2010. The urban spectator: American concept cities from Kodak to Google. New York: UPNE Hildebrand, D. 2009. The role of economic analysis in the EC competition rules, 3rd Ed. Kluwer: Kluwer Law International Kodak. 2011. Home. Available at http://www.kodak.com/ek/US/en/Home.htm Meehan, J. 2007. KODAK The Art of Digital Photography: Mood, Ambience & Dramatic Effects. London: Lark Books Pham-Gia, K. 2009. Case Study: Kodak at a Crossroads - The Transition from Film-based to Digital Photography. London: GRIN Verlag Sheppard, R. 2008. Kodak Guide to Digital Photography. London: Lark Books Read More