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Kodak Targets Value Items, 'Big Ink' In 4th Qtr.

9/10/2009 02:00:00 AM Eastern

Jeff Hayzlett, Kodak's chief marketing officer, said the company's marketing efforts, focused on the mainstream audience, are building the film and photo giant back into a major imaging force.

The strategy involves offering a range of products designed to enhance the value proposition while keeping price points affordable for the masses.

Although Kodak has a wide lineup of frames, cameras and photo printers to appeal to most budget ranges, the company has targeted several key models to highlight as affordable gift items for the critical holiday shopping period.

Among those items are several affordably priced digital photo frames, including the now-shipping S730 ($139 suggested retail) with a 6-inch LCD screen and “proximity touch” controls that sense an approaching finger before automatically lighting up the control keys on the frame bezel.

The frame also includes a picture-finder feature that, with a touch of button, will find all the pictures taken during the day.

The S730, which comes with a shiraz-colored border trim, has an onboard rechargeable battery that enables it to be unplugged from the wall and handed around fully powered for closer viewing and photo selection. More than 8,000 photos can be stored on its 1GB of onboard memory, and extra photos can be added through an SD card slot and USB port.

Kodak is making the frame available to all of its retail partners and online through Kodak.com.

To date, Hayzlett said Kodak has seen its best business at mass merchants and big-box CE accounts.

“We typically see vendors such as Walmart and Best Buy being really good partners for us,” he said, pointing to the growing importance of the mass retailers in the down economy. “Last year we were Walmart's No. 1.”

Kodak is also expanding the push behind its inkjet printer line, playing up the company's “value proposition” in having less-expensive printer ink than “Big Ink,” Hayzlett's nickname for his largest printer rivals: Hewlett-Packard, Epson and Canon.

Although the inkjet market is down by approximately 24 percent for the big players, he said, Kodak's is up 44 percent on equipment and supplies this year.

“We give you a printer for a fair price. You can save up to $110 per year [on average ink use]. On average we sell about eight cartridges per year compared to about four for our competitors.”

Kodak is pushing the message through several advertising and promotional tools including an online printing calculator (at www.printandprosper.com) and through short- and long-form infomercials.

“We are seeing fairly heavy buy-ins [through the infomercials], but we get a good uplift on our retail sales as well,” he said of the carry-over promotional benefits of the spots.

The efforts resulted in HP recently filing a complaint with the National Advertising Division (NAD) of the Council of Better Business Bureaus, asking that the claims made be investigated. Kodak said it stands by its assertions.

Hayzlett said printing is a significant tool Kodak is using to replace lost revenue in the declining silver-halide film business.

“Five years ago we weren't even in the print business; now we're No. 1 in commercial print, and in some regions of the world we've moved into the top three to top five spots in our price category,” he said, adding that the company's stated goal is to double its print volume in 2009.

The message, he said, is catching on with the discounters first — the printer line was recently expanded to 1,000 additional Walmart locations — and has ramped up significantly in other channels as well.

Printers have not been as well represented in the important SO/HO channel, but that is changing, he said, with Staples picking up the line in a number of its outlets.

“You have to walk, crawl and run,” said Hayzlett. “We've been cautious about who we roll out to and when, based on our target markets, and that's really because of demand. We're seeing really strong pull.”

A key product in the printer segment this holiday season is the SP-9, which Hayzlett said is targeted at “the high burners — the memory officers in the family doing a lot of documents, a lot of recipes, a lot directions — because that helps us get to profitability on the product line faster.”

“Americans overpaid for ink by millions of dollars last year, and we question a model that lets you buy the printer off the shelf, but you have to get the ink cartridges behind the counter,” he said, adding that Kodak's strategy of simplifying the ink-replacement process by making its cartridges compatible with all the printers it introduces is paying dividends.

As for the company's camera line, Hayzlett said Kodak has added video recording, and in some cases HD video recording, to most of its model mix to enhance the value proposition to the customer.

The recently announced Z950 ($279 estimated street price) “mommy cam” is expected to be a big holiday seller, he said, because it was designed to address a desire by women for a camera that is both compact yet big enough to be easily distinguished from a phone when feeling through a purse. It includes a 10x zoom range, 12-megapixel resolution and HD video resolution.

The “halo product” for the company this season, he said, will be the Zi8 bar-style pocket video camera with FullHD 1080p recording capability, which is targeted at the successful Flip line. It offers a range of video-resolution levels, also including 720p and VGA, plus still photo shooting, and includes a 5x digital zoom (a step-up over competitive models), microphone jack and image stabilization, which is absent in most similarly configured cameras.

“This is the product that is going to make people say, 'Kodak has got its mojo back,'” Hayzlett declared.

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