1. Diagnosis of the reasons for Kodak's market share loss and assessment of likely development of the market if Kodak maintained the status quo.
Kodak had been experiencing a loss on market share from 76% to 70% over the past five years, which was caused by the action of its competitors like Fuji Photo Film Co. and Konica Corp., wooing consumers with low-priced versions.
If Kodak did nothing to deal with the situation, either in pricing or creating something new, sooner or later its competitors would continue to tighten their grips on Kodak's market share. The market share would slowly, but steadily, decreased. The growth, compared to Fuji's 15%, could not be relied on. At some point, it would be …show more content…
b. Royal Gold replaced Ektar in the Super premium segment. Ektar was targeting professionals and serious amateurs, while Royal Gold targeted a broader audience for "very special" occasions such as the birth of a baby or graduation day. This was a good strategy since people usually tend to try memorializing those events and it occurred in every day's life. There were always moments like those in people's life. Kodak could build a strong bond with the costumers by "attending" every important events in their life.
5. Analyze price-cutting effect on brand loyalty.
Kotler (2006) mentions three possible traps, which follow a price-cutting strategy, which are:
a. Low-quality trap
Consumers will assume that the quality is low. With Kodak, Gold Plus already sets the standard for the photo film industry. If the price is cut, consumers will question its quality: Is there a faulty on the product? Has the quality been reduced? They will undoubtedly look for other products because the sense of security or trust on the product is not there anymore, due to the low price. This is a threat to the loyalty that already exists between Kodak and its consumers.
b. Fragile-market-share trap
A low price buys market share, but not market loyalty. The same customers will