Kodak: Changing the Picture
The case begins by recalling Kodak¶s storied history, which began in 1888 with its introduction of the Brownie camera priced at $1.00. By 2000,
was one of the most recognized and trusted brands in the world.
However, by the year 2000, the company faced many challenges. Its stock price had plummeted, and it had begun laying off workers. Even worse, when the September 11tragedy hit, consumers began to flock to digital cameras, and cell phone manufacturers beganto offer camera phones. As if all that were n¶t enough, Fuji was slowly but surely exposing the cracks in Kodak¶s marketing strategy. This was especially true of the move toward ...view middle of the document...
Every mom-and-pop drugstore or grocery store or tourist gift store had to have Kodak film available. As it moves into producing inkjet printers or high-end digital printing products or imaging for healthcare providers, students should see that it would have a smaller number of customers who are very different from the retail stores it traditionally targeted in order to reach end customers.
T o the extent that its customers use the new products it develops in their processes or in products they make for resale, its demand will become derived demand and become more price inelastic. We would expect that the demand for consumer film was more price elastic
T he text suggests that the demand for business goods and services would be more fluctuating, although the September 11 tragedy certainly had a profound effect on demand for many consumer goods.
As to the nature of the buying unit, as Kodak moves to sell products that businesses will use in their own work, such as the inkjet printers or x-ray film, it will be dealing with professional buyers versus the individual consumers, who are its traditional customers for its film.
Because of this, we would expect Kodak to face more complex, more formal, and longer decision processes.
What examples of the major types of buying situations do you see in the case?
T he case discusses Walgreen’s efforts to install one-hour photo-processing systems in its stores. It approached Kodak and asked them to help with this. T his is a new-task buying situation where Kodak had to develop a new system for its customer. It purchased the machine from a Swiss manufacturer and provided the service and financing itself.
Because of problems Walgreen experienced with the Kodak system, it approached Fuji. We can assume that Walgreen asked Fuji to provide machines that would solve those problems.
T his is an example of a modified rebury, even though Walgreen was switching suppliers. It was using its experience with the first system to make modifications that would improve the system. Students will also suggest that Kodak’s attempt to offer kits that would modify its mini-labs so they could handle digital printsis an example of a modified rebuy.
T he case indicates that Walgreen first installed the Fuji machines in its stores.T his is another example of a new task purchase. T hen, it began to spread the machines to it so there stores. We can assume that this has resulted in a straight rebuy as Walgreen simply placed orders for additional machines.
Fuji’s development of a Web site for Walgreen is also an example of a new task purchase.
How might Kodak have made better use of the buying center concept in order to more effectively meet the needs of its commercial customers?
In its traditional markets, Kodak had established buying processes with customers who knew Kodak and its products. Walgreen, for example, had an established relationship with Kodak. Kodak’s sales force was...