Film Case Study: Kodak's Film

The case is set out in a period where leading film product producing company, Kodak is faced with competitive pressures and market share losses. According to the case, between January 17 and January 24 1994, Kodak has lost 8% of its value, due to rumors of a price cut. Kodak’s market share over a 5-year period has also fallen from 76% to 70%. Although it was still the leading firm in the film production industry, it had rising competitive pressures from players such as Fuji co, Konica and other brands, which had products that were priced much lower than Kodak’s flagship brand Gold plus. This led them to develop a new brand called Funtime, which was priced at the same level of that of Konica and Fuji, 20% lower then Gold plus brand.
In 1993,

Due to maturity stage, competitors have been stable, and most consumers have tried the product. According to the 1991 survey cited in Discount Merchandiser, consumers tend to view film as a commodity, often buying on the price alone. The survey clearly supported this assumption. Stopping the declination of the film market might be almost impossible, but Kodak would be better to retard this stage. Kodak’s act was market modification which expanded the market for its mature product by converting nonusers, entering new market segments, and attracting customers from

The case study stated Kodak’s gross margins were about 70%, so the Gold Plus’ cost should probably equal to $1.047 per unit, 30% of $3.49. After reducing the 15% of Gold Plus’ price, Kodak still has the profit of $1.9195 per unit which more than Fujicolor Super G’s profit of $1.6005, 55% of $2.91. It is clear that justifying a 15% price reduction of Gold Plus, which brings the price down to $2.9665, is realistic. However, reducing the price might cause the quality image of the film product, Gold Plus. Therefore, Kodak has to be very careful if it implement this price