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Situation Analysis Although continuing its overwhelming domination of the photo film market, Kodak has suffered 6% of declines in film market share. This mainly resulted form fierce competition by Fuji Photo Film Co. and Konica Corp., selling consumer lower-priced films. Furthermore, since Kodak could not sell film on a private label basis, consumer is the only target to regain the revenue. Therefore, Kodak proposed to introduce a brand, Funtime, to fight with Fuji and Konica in economy class of film. With the introduction of Funtime, Kodak formed a 3-tiered product line, that is, Royal Gold, Gold plus, and Funtime. III. The U.S. Photo Film Market Analysis In a five years¡¦ observation, the photo film market¡¦s annual unit growth rate averaged only 2%. Obviously, it¡¦s been at matured stage of product life cycle, meaning the most possible way to win market share is to switch competitors¡¦ customers. That also forced Kodak to pay more attention to the price-sensitive consumer and launch Funtime in order not to be absent in economy photo film battle. However, to introduce a new product in the almost saturated market may cause cannibalization so that some patrons of Kodak Gold plus switch to Funtime. IV. Segmentation Before 1994, the product line of Kodak photo film is Ektar, targeting serious amateurs and professionals, and Gold plus, targeting families. Ektar is using behavior segmentation to serve those experienced amateurs, and Gold plus is using demographic segmentation and emphasizing on the family life cycle, which has been the main theme of Kodak communication strategy. However, a useful segmentation should be the largest possible homogeneous group worth going after with a tailored marketing program. A segmentation like Ektar¡¦s might be too small to create a sustainable competitive advantage. Therefore, it is very smart for Kodak to replace Ektar with a broader positioned superpremium brand, Royal Gold. Because Royal Gold is positioned for ¡§very special occasions¡¨, it enlarges the possible homogeneous group of consumers. Its targeting market is far larger than Ektar¡¦s, although they both use behavioral segmentation. Furthermore, another behavioral segmentation variables, benefits, is chosen by Kodak. According to Consumer reports, November 1993, most films is no better or no worse than their competitors of the same speed.
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