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Research Report
Eastman Kodak Company in the UK

A marketing research for Eastman Kodak Company in the UK to identify
two product categories and prepare a three-year marketing plan for each of
them with focus on customer segments and justification for the choice of
product Groups and customer segments selected in this report
...
PESTEL







Political
Economic
Social
Technological
Environmental
Legal

5
5
6
7
7
8

b
...
SWOT analysis





12

Strengths
Weaknesses
Opportunities
Threats

12
12
13
13

Generic strategy
Product groups structure in Kodak

14

1
...
Graphic Communication Group

21



rationales for selection

21



Customer group target , customer behaviour & rationales for selection
 Commercial organisations
 Government organisations
 Private not-for-profit organisation

22



22
22
22

Developing 3 year marketing plan & Strategy for the Marketing Mix





23
23

Product
Price
Place
Promotion

23
23
23

Conclusions

Bibolograghy

25

3

Introduction
This research aims to develop a marketing strategy for Kodak in the UK business environment
based on product and service portfolios, segmentation, positioning, competencies and innovation,
competitive advantage and market impact and performance
...
This
research will also focus on customer segments and justify the choice for both the product
segments chosen and customer target groups
...
Subsequently, Summary of environmental appraisal analysis and the changing
environments within which organisation operate and the implications for marketing management
implementing synthesise marketing theory will be critically analysed
...
Finally, Conclusions will be
presented
...

Based in New York, this company founded in 1880 when few people had access to making their
own photos and has been globally recognised for its history based upon traditional photography
...
Nowadays, cameras, mobile phones, webcams, and camcorders are available to
mass-market consumers who have high expectation regarding innovation and are price
conscious, which resulted to highly competitive and very price sensitive market
...
Therefore, In the UK, it is

4

impossible for Kodak to be separated from political, Economic, socio-cultural, environmental
and legal affects of the UK environment
...
PESTEL
The PESTEL framework which stands for Political, Economical, Social, Technological,
Environmental (green) and Legal factors, provide the wide range of information from which to
identify key drivers of change in future and consider possible change of strategy according to
business environment
...
For instance, the materials that
use in production are now being regulated and come under scrutiny in the climate-friendly
approach
...




Economic

Changes in economic conditions and market demand affecting the business environment in
which Kodak operates
...
Recent economic
recession has adversely affected financial performance of Kodak because had impact on liquidity,
profitability, and inventory regarding B2B and B2C activities
...

Drop in average GDP has presented a decline in value of total activity and downturn in the UK
economy, which affect potential buyers negatively
...
However, According to the Office of
national statistics (2010), the GDP grew increased by 0
...
8% higher than the third quarter of 2009
...

The currency exchange rates that Kodak faces in the European market also contribute to the
economic environment
...
Yahoo, 2010), this puts Kodak UK at a disadvantage when export to countries
that use the Euros
...




Social

Social factors such as demographic change in UK society always affect company`s business in a
particular market
...
Price conscious
buyers and consumers expectation regarding innovative technology could be social factors,
which Kodak could possibly face in the UK
...
Many of the policies implemented by the EU and UK are voluntary, not
mandatory
...
The research has showed that climate-change and environmental
concerns are the most significant issues facing the business community recently as today`s social

6

trend emphasis on preserving nature and the environment
...




Technological

Technological factors play a significant role in the photographic products
...
The digital technology has become extremely competitive as expectation of
consumers regarding innovation is relatively high and they are very price sensitive
...
It is imperative to develop new technologies that will lead to advanced
products and services or a company will risk falling behind competitors and being non-compliant
with new regulations
...
Kodak has to predict future trends in technology
adequately and produce innovative products to respond quickly to changing customer
preferences
...




Environmental

Considering the theme of eco-friendly factors, society has taken up the call for the environment
...

In the digital industry, this means the shift to eco-friendly products that more recyclable which
applies to the technology factors of the business environment as well
...


7



Legal

There are numerous Legislations and acts that Kodak must comply with as operates in the UK
...

Eco-friendly and producing recyclable products are other important aspects of the policies and
legislation introduced in the UK and EU
...
Technology is a factor in this as well, because
all of the measures discussed by the EU contain some sort of innovative technology
...


b
...
Considering Kodak in the
UK and its competitors as market players and buyers as end-customers, this framework would be
implemented as following:



Rivalry among Existing Competitors

The worldwide market is extremely competitive, dominated by four large rivals which according
to Datamonitor (2009) are Canon Inc with (41
...
6%),
Kodak with (19
...
Thus, Kodak is the third largest supplier to global
photographic products market share and since operates in a number of different markets,
including photographic equipment, Film, electronic consumer goods, computing systems, and
printing, it competes with general and specialised manufactures and retailers across the range of
its products and services as well
...
UK Competition
especially in the business to consumers market is likely to intensify further as photographic
products are not highly differentiated
...
Innovative products are market leader with a short product life cycle until
other competitors imitate advantageous design features
...
Obviously,
Porter`s Competitive Rivalry between Existing Players is significant and will affect profitability
and operation of Kodak in the UK consequently
...




Threat of New Entrants

Competition in the UK is increasing rapidly with new entrants coming into the market from
China, South Korea new companies in the market
...
Not only there will undoubtedly be new entrants into
the market, but also existing companies have developed alternative more innovative products as
well
...
However, due to narrow margins, manufactures have
to rely on mass production in order to take advantage of economies of scale
...




Bargaining Power of Suppliers

Diverse materials, inputs, and processes giving suppliers increased power
...
For instance, according
to Datamonitor, policies form the EU and UK government regarding this issue passed a directive
concerning the waste Electrical and Electronic Equipment directive, which became EU law in
2003
...
Together with the recycling end-of-life products, restriction of hazardous
substances directive took affect for the EU members in 2006 regarding use of hazardous material
...
Because if manufacturers
are required to use recyclable materials in production, suppliers may be able to charge more
based on the limited number of options manufactures have
...
Specialist products usually have few
suppliers, which strengthen the power of supplier
...
For the film processing industry, silver as well as specialist
aluminium products for photographic plates are important components
...
For the
manufacture of photographic paper, it requires a source of paper-based materials from various
suppliers
...
For instance, if GDP in the
UK decrease, the demand for new products would apparently drop along with the drop in
disposable income of buyers
...
Although there are specialist
photographic retailers for niche photographic equipment, nevertheless there is generally limited
differentiation between different sellers
...

10

In photographic manufacturers industry, wide availability range of numerous channels of
distribution increase customer-base and therefore, switching costs for customers are low and they
can switch between various brands easily, which weakens bargain power of buyers
...
Porter’s
substitute threat force is significant because it can diminish the demand for photographic
equipments
...


Precisely, Porter five forces model to analyse this project could be presented as diagram 1
...
SWOT analysis
Implementing SWOT analysis model for strategic planning and environmental analysis,
Strengths, Weaknesses, Opportunities, and Threats involve to Kodak in the UK could be
evaluated as following:



Strengths

The key strength of Kodak is its Brand name, which is synonymous with photography and
filming technology and remands its long time reputation for innovation
...

The company acquires massive skills, expertise and worldwide manufacturing and distribution
network, which have established diversified sourced of revenue
...
Strengths and capabilities sources for Kodak would be
massive financial investment in photography products, experience on customer service and
corporate marketing, having intellectual property right and ability of the marketing function in a
variety of corporate environments
...
Historically principle of Kodak
strategy had been strong customer focus, low- cost mass production (economy of scale), high
profile advertising, and international distribution



Weaknesses

The main weakness of Kodak has been its sluggish financial performance over the recent years
...

According to Datamonitor, lack of product diversification is another weakness of Kodak, which
is resulted from insufficient reaction to the rapid change of digital technology
...
As the UK economy is on recovery process (national statistics, 2010), this means the
boost of demand for products and as Kodak is widely recognised brand, it must utilise this
opportunity to attract and target new potential customer by appropriate business strategy
...




Threats

Main treats would be from the rival manufactures as well as new entrants to this market, which
offer advanced technology and eco-friendly products in lower prices
...
According to (Annual Report, 2008), Kodak was seeking an agreed
waiver should it be unable to meet its obligations in the first quarter of 2009
...
Kodak has to face intense competition at multiple levels of business and
compete with black market, parallel import and smuggled goods, which are massive treats for its
activity
...
For instance, Kodak`s new inkjet printers that use silicon technology rather
than individual ink cartridge is one of innovative technology which differ Kodak from other
competitors and will ease the company recovery and profit
...
According to Kodak (Annual Report, 2008), the
balance of its portfolio has shifted dramatically on the last ten years, as digital revolution
technology lead to creating new segments while others have been sold or abandoned
...

The present structure is as follows:


Consumer Digital Imaging Group: which mainly focus on business to consumer (B2C)
activity for digital cameras, snapshot printers, retail photo kiosks and online services



Film, Photofinishing and Entertainment Group: this group includes traditional medium
of colour and black and white negative film for still and moving pictures from
manufacture to retail, aerial photography, multiple use and disposable cameras, projectors
as well as processing chemicals and apparatus
...
Sales in this product group have been gradually declining and present a decline of %58
during 2004 - 2008
...
Although demand for motion picture films are still stable, but it is
anticipated that this will be overtaken by the digital revolution too
...
Thus, marketing plan for Kodak in the UK will be conducted for two
product categories:

14

1
...
Graphic Communication Group

Customer segmentation analyses and three-year marketing plan with Strategy for the Marketing
Mix for each of these product categories will be conducted afterwards
...
Sales for this segment grew from
$2,366 million to $3,247 million during 2004-2007 which means 37% during this period
and demonstrates that this product group is profitable and worthy for investment
...
Products, such as the all-in-one inkjet
printer from 2007 and the new pocket digital video camera launched in 2008 have been
successfully sold through distributors, retailers or online
...


-

This products facilitate consumer`s daily life requirements and would add value to their
social life
...
For example, there are 100,000 Kodak picture-processing installations in retail
outlets around the world allow customers to print their digital images from cameras,
mobile phones, and comparable devices as well as create collages, photo books,
calendars, greetings cards, and even movies with music direct to DVD
...
Users can download free Kodak software EasyShare to handle
and manipulate digital images
...

-

In this product group, Kodak is also at the front position of microchip technology, having
a line of sensors that have applications in cars, security devices and other products, which
can target niche market effectively and make profit
...
Its
products include digital still cameras, digital picture frames, photo printers, photo kiosks, inkjet
printers, colour paper, wholesale printing, and a range of online services
...
Consequently, traditional business models are under
treat (business insights, 2010)
There is significant competition in the market for home-use consumer electronics jointly with the
related online services
...
Shortly after a new product has been
introduced to the market, there is the expectation that prices will drop quite fast and there will be
more advanced models available shortly afterwards with developed capabilities relating to size,
memory, resolution , battery life, use-friendliness and compatibility with other devices and
software
...
In this
research, based on National Statistics, consumer segmentation has been conducted on the ground

16

of socio-economical background (AB and C1C2DE) and age (18-34 and 35+)
...


Socioeconomic group

UK
pop* %

AB (Better off)

29%

C2

21%

D

15%

E

UK
Pop
...
Source: National Statistics (2010)
based on cohort 15-34 and 35-64

In the UK, based on the NRS, the AB socio-economical classification can be define as workers
with relatively secure power of purchase, in contrast, C1C2DE as workers with relatively
insecure power of purchase
...
They are mostly online shoppers and really care about quality
...


17

 Working-class Bargainers (C1C2DE socio-economical class, 15- 34 years old)
Mostly single workers with average income who are interested to be updated with new
technology
...


 Working-class Traditionalist (C1C2DE socio-economical class, over 35 years of age)
mainly couples and some singles with average income
...


 Students, who are mostly 18-34 years old, single and brand lover
...
They are heavy users of Internet and buy many
items of consumer electronics such as Digital cameras and MP3 players online and
offline
...
Kodak brand
has unique place in consumer`s mind and has positioned itself as innovative brand
...
Kodak must
frequently assess its product in comparison to competitors and evaluate brand position
...
As Kodak products gives a tangible value to customers and could be
combined with service layers such as prompt delivery, installation and after-sale service
and management of complaint, Kodak must concentrate to these services in comparison

18

to its competitors aimed to improve brand image
...


 Price
Kodak not only has to assess its list price regularly in comparison to its competitors to
match prices, but also should provide discounts and incentives to compete with rivals
...
Kodak must imply various strategies when target different customer
segments
...
However, for bargainers and traditional segments those
are more prices sensitive, pricing strategy in the product ranges, which interest them,
would be more effective as Bargainers are strongly characterized by comparison between
offerings and price
...


 Place (distribution)
Kodak would reach to its consumers through various locations and channels of
distribution such as high street stores, retailers that could be in the form of online and
offline
...
When conduct marketing plan for 3 years and considering target consumer
segments, Kodak must consider that young professionals are more likely to purchase
Kodak’s products online, as opposed to old people especially in Traditionalists segment
...


19

 Promotion
Kodak must take into account specific characteristic of consumers in each segment to
target effectively particular groups of people
...
For
instance, as Kodak has given priority to simplicity of use such as in its own EasyShare
system and also intends to provide the full solution, from capture through storage to
printing and sharing, Its marketing and PR strategy particularly to target professional
segments, should reveal these messages
...


2 Graphic Communication Group


rationales for selection

-

According to financial performance and Annual Reports, (2006-8), this segment has
presented sufficient financial performance and anticipated that sales for this segment rise
rapidly as this product group is profitable and creditable
...
344 million in its first year in
2004
...


-

This category reflects continuous basic requirements of Businesses and organisations at
present and will be growing constantly in future
...
It also
provides after sales service and maintenance contracts for its customers
...




Customer group target , customer behaviour & rationales for selection

As previously mentioned, target customers in this product groups are businesses in different sizes
and activities
...
Kodak has countered the decline in demand for its traditional
photographic products through a number of key acquisitions
...
Thus, Kodak
could be optimist to enhance its financial performance regarding this product group as it would
be profitable
...

- Users: these industrial companies buy products or services from Kodak to support or
enable the production process or the activities of the company in general such as digital
Camera, commercial printers, scanners
...

- Original equipment manufacturers: these companies buy industrial goods from Kodak
and incorporate them in their own products for instance Kodak is at the front position of

21

microchip technology, having a line of sensors that have applications in cars, security
devices and other products
...
The Kodak also can provide after sales service and maintenance
contracts for them
...


 Private not-for-profit organisation: constitute a variety of organisations such as
schools, hospitals, religious organisations, cultural organisations
...

Kodak must exploit this opportunity with planning customary marketing strategy to
market its products to appropriate target businesses
...
As Kodak offers a range of products
such as equipment, materials, processes and software and services to business including
solutions to assist in the conversion from analogue to digital platform, it must identify
and match its products to appropriate organisations and businesses
...

Kodak must assess pricing strategy in comparison to competitors over time to be able to
offer better price for quality and innovation to businesses and must frequently review its
plan according to Macro environment of business
...


 Promotion
Regarding business-to- business promotion, Kodak must focus on Trade promotion to
resellers
...
For
PR and publicity, Kodak has to prepare various catalogues of its products with technical
documentation to present to other businesses
...
Nowadays, Direct mailing and internet database marketing is growing
for business-to- business promotions which should be used by Kodak in future
...

First, the Background of the Kodak precisely reviewed
...
To analyse external environment of Kodak in the UK to
develop marketing plan, appropriate models and techniques such as PESTEL, Porter’s 5 Forces
Network and SWOT analyse implemented which provided the effective way to identify the
strategic capability of Kodak in the UK
...


24

Bibolograghy



De Pelsmacker, P
...
( 2007) “ Marketing Communications”, 3rd edn,
FT Prentice Hall M
...
, Piercy, N
...
, and Nicoulaud, B
...
, Harlow: FT Prentice-Hall



Howarth, David
...
"Internal Economic and Social Policy Developments"
...
44, p
...




kotler et al
...
, Armstrong, G
...
J
...
and Keller, K
...
(2006) Marketing Management, 12th ed
...
(1998) “Marketing Communications”: Principles & Practice, ITP



Lasserre, P
...
2nd ed
...
Y
...
(2003) Corporate strategy
...
Essex: Pearson Education Limited
...
K, Briks D
...
, Essex:
Pearson Education Limited
...
, Frynas, G
...
and Finlay, P
...
Oxford: Oxford
University Press



Office of national statistics (2010) GDP Growth Economy grows by 0
...
statistics
...
uk/cci/nugget
...
12
...
(2007)
...
Economic and Industrial Democracy
...
110-139
...
E
...
“Competitive Strategy”
...
E
...
86,
No
...
78-93



Pickton, D
...
(2005) “Integrated Marketing Communications” 2nd ed, FT
Publishing



Recklies, Dagmar
...
Porters 5 Forces
...
themanager
...
htm
...
12
...
(2003)
...
[online] Available at:
http://www
...
eu
...
pdf (Accessed 09
...
2010)



UK economy 'weakest in 30 years' (2009 ) [online] Available at:
http://news
...
co
...
stm (Accessed 09
...
2010)



Ward, M
...
, Lee, M
...
(2000), "Internet shopping, consumer search and product branding", The
Journal of Product Management, Vol
...
1, pp
...
[online] Business Source Premier
Database, EBSCO HOST
...
ebscohost
...
(Accessed 07
...
2010)



Yahoo! Finance (2010) British Pound to Euro Exchange
...
yahoo
...
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