Term Paper on "Kodak, Has Been a Household Name"

Term Paper 6 pages (1858 words) Sources: 5 Style: APA

[EXCERPT] . . . .

Kodak, has been a household name in photography for decades. The infrastructure that has developed around traditional developed film photography has made the company a strong leader and yet recent technological advances and the development of non-cost prohibitive digital technologies, for photography have changed the outlook for Kodak. Comparing prices of intial digital technology from just a few years ago, when a camera, with limited abilities was marketed by Kodak for a boasted less than $1,000, dollars is interesting when the consumer can now, ten years later buy a decent and much more capable system, with most of the bugs worked out for a little over $100 is interesting, and also brings to mind the fact that Kodak was digital from the very beginning of the movement and is answering the changing market demands by continuing to lower prices and diversify and improve products to meet the market which is highly competative. (Rohde, 1996, p. 18)

Kodaks traditional 135 film and analog camera business has declined 17% while its digital imaging portfolio grew at 36%. Somewhere along the line, the two paths will intersect this year. Thus, Kodak marketing and sales experts tag 2005 as the companys "cross over year." ("Kodak Crosses over from," 2005, p. NA)

Kodak is threatened with either immediate and rapid diversification and restructuring or losses as great as those seen in outdated technology industries, such as the typewriter industry at the advent of word processing technologies and personal computers. Kodak does seem to be showing signs that it has answered the consumer's call to change successfully through expanding digital offerings and services.

Kodak, the world's foremost imaging innovator, reported that its worldwide revenue rose by two percent in the first quarter, led by a 29% increase in the sale of digital products and services. The company reported a first quarter loss of $298 million, or $1.04 per share, largely stemming from restructuring charges ($197 million after taxes) and rising silver and oil costs. ("Kodak Phils. Pulls Up," 2006, p. NA)

Kodak is answering consumer demands and therefore managing to transition through this monumental change by, quickly utilizing name recognition to sell rapidly produced digital products, digital photo print paper, digital photo printers and printing systems, offering Kiosk printing for digital prints in stores as well as developing digital cameras and rapidly moving them to market. Lastly, the kinds of money making enterprises that have worked for Kodak in the past and will continue to be specialized, like medical imaging, will be upgraded to digital technologies and continue to help Kodak keep going, despite the changes in the market. ("Kodak Phils. Pulls Up," 2006, p. NA) This work will look at the ways, mentioned above that Kodak is changing to meet the new consumer needs to stay afloat in this new digital economy.

Diversification may solve many of the potential problems for Kodak but the link of consumer dependence on development as well as the early competition for digital products and the lack of existing plants to alter manufacturing technology to meet the digital demand will likely still continue to effect the company, with layoffs and plant closures. ("Digital Craze Blamed as," 2006, p. 7) As transforming an entire workforce to a new technology, from one that was also mechanically and technology driven, is difficult and Kodak will need to address transitional options, such as locating new plants with entirely different manufacturing processes in locations with lower overhead, which can in part explain the fact that UK plants are laying off and/or closing while Philippines plants are growing and expanding. ("Kodak Phils. Pulls Up," 2006, p. NA) ("Digital Craze Blamed as," 2006, p. 7) Kodak is likely smartly utilizing this period of restructuring to digital technology to lower overhead, though job loss may be the result in some areas the overall situation for the company is positive.

The advantages of digital photography are countless over the traditional consumer dependence of processing film photography. Even on a simple digital camera the consumer can take literally hundreds of photographs, upload them onto a computer, digitally enhance them, remove flaws or simply delete those that do not turn out, without ever having to pay someone to process them and print them before they decide they don't meet their needs. One issue in this regard may actually help Kodak and other old technology giants by creating a market that would not have existed before, as ease of use will likely increase the potential customer base. Kodak, must now then find a way to capture such a customer base and keep it loyal through upgrades rather than repeated customer exposure through repeated dependence on development technologies.

Kodak has been a leader if not a monopoly in photo print paper for decades, and name recognition for quality has been marketed heavily around such paper, in the traditional developed film technology. Kodak made millions of dollars on supplying Kodak paper to film development stores and outsourced mass development centers. Now with the demand for these services all but disappearing Kodak must change the way it markets print paper. The digital photo print paper, available in most stores is the manner it must be done, as the consumer desire to print at home on their own PCs or in digital print systems hooked directly to the memory card of their camera paper msut be sold directly to the consumer in traditional photo stores and everywhere people buy office supplies. Utilizing the brand recognition of enduring quality has been the key to this transition but a monopoly is not guaranteed as many other companies compete for this market. Hopefully the fact that the consumer base is growing larger than it did in traditional film technology will help offset the competition.

Since April last year, Monnet has been overseeing the growth of Kodaks business portfolio of traditional and digital products including consumer and professional film and award winning digital cameras, home printers, inkjet papers, retail kiosks and leading online photofinishing services across the greater Asia geographies.The business move of Kodak is in line with its entering the so-called New Technology market and battlefield. New Technology comprises the display and inkjet business. Known brands like HP, Epson, Canon for instance are scrabbling for consumers money in this business."In 2006, you may see a new player competing (with them)," Monnet whispered, adding "Will you take the risk and give it (imaging and print orders) to HP, Cannon, Epson?" ("Kodak Crosses over from," 2005, p. NA)

The foundation of change is already in place, and competition will be fierce, but the name recognition of Kodak will likely keep it a salient player in the changing market of film technology.

One way that Kodak has attempted to retain customer brand exclusivity is by offering digital development kiosks in stores. These services keep customers coming into Kodak stores and can offer services that are not available to people who are not yet ready to transition into a completely at home development system or who do not have the upgraded computer technology to answer the digital call but still wish to benefit from it. "With over 300 kiosks installed in each store, Albert said Kodak would be expanding its network of kiosks, similar to ATM machines, installed in each of the Kodak express stores." ("Kodak Phils. Pulls Up," 2006, p. NA) These services, will likely eventually decline, as more and more people move the services and technology into their home computer system, but for now they keep the doors of their stores open for sales of digital and traditional products. Another potential market is to sell digital technology products to development sites that have traditionally depended on Kodak for paper and development technology. (Utterback, 1995, p. 130) (Snow, 2002, p. 6)

Another unlikely way in which Kodak has attempted to retain consumer loyalty, past the age where they are dependant upon Kodak stores and developing locations is with the emphasis on computer communication through electronic environments. Consumers can seek out Kodak and find many ways that they can better utilize the products they already have from Kodak as well as research products they would like to have. Kodak was a pioneer in this idea.

A companies such as Kodak and HP launched or expanded into website loyalty programs and web communities of people with similar interests, where a customer could learn how to get the most from the product or services purchased. The goal of these programs is to have customers constantly expand their ability to benefit from the purchase and the relationship with the company. Such programs also gave companies the ability to sell additional products and services. (Fazarinc, 2001, p. 18)

Website loyalty technology gives the company insight into customer desires and needs as well as spending habits, searches and information utilization counts can give them a clear and almost instant knowledge base on which products are selling and which are not, to increase sales or potentially kill products that are not selling and therefore not working for the company.… READ MORE

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