Brand Marketing Search Engine

Saturday, December 02, 2006

Tired brands: Kodak

Failing to stay ahead

Can a brand become too successful? The short answer, of course, is no it cannot. Is it possible to conceive that the success and popularity of a brand such as Coca-Cola or McDonald’s could become a weakness? Surely not. And yet, the strongest brands are also those which are the most tied down.

Consumers know what they want from Coca-Cola (cola) and McDonald’s (fast food) and they don’t want anything different. If McDonald’s wanted to set up a vegetarian, high class restaurant, it would need to change its brand name in order to attract customers. Coca-Cola has learnt this lesson from real experience. When it launched a range of Coca-Cola clothes, sales were far lower than had been expected. The trouble was, although Coca-Cola is an internationally adored brand, people don’t want to wear it, they’d prefer to drink it.

So to ask the question again, can a brand become too successful? No, providing the brand stays within the same product category. If a brand becomes globally associated with one type of product, it is almost impossible to change the consumer’s perception. After all, brands are names. If two people have exactly the same name it can become confusing, and so it is with products. But what if the product category itself changes, regardless of the brand’s will? This situation may never have affected Coca-Cola or McDonald’s, as there will always be demand for cola and fast food, but it has affected others, most notably Kodak.

Perhaps no market in the world is currently changing with more speed than photography. More and more consumers are trading their standard photographic cameras for digital alternatives. Many experts have predicted that it is only a matter of time before the entire camera market goes digital.

Kodak, however, is a name intrinsically associated with conventional photographs. When most people think Kodak, they think little yellow boxes of film. They don’t think cutting-edge digital technology.

According to Harvard Business School professor John Kotler, the market shift towards digital photography constitutes ‘a howling, horrifically difficult challenge’ for the brand. ‘For a century Kodak had too much success and too much market share. It was as bad as IBM at its worst.’

How has Kodak responded to this challenge? It entered the digital arena in 1995 with the creation of the Kodak Digital Science brand. However, the following year saw the company invest heavily in conventional photography with the development of the Advanced Photo System (branded as the Kodak Advantix system). This new system offered various advantages for the consumer, including a choice of three print formats.

However, the development of the Advantix cameras and films was extremely expensive for Kodak. Between 1996 and 1998 the company invested US $200 million in the system, only to discover it had distribution problems.

Not enough retailers were interested in stocking the cameras and films, and there were not enough places where the Advantix films could get processed. Some brand commentators, including Al Ries and Jack Trout, have questioned the logic behind the decision to invest so heavily in conventional photography – albeit advanced conventional photography – at a time when the market was starting to head towards digital photography. ‘Wouldn’t it be better to let the old system die a natural death and use the money to build a new digital brand?’ Ries asks, rhetorically, in The 22 Immutable Laws of Branding.

Kodak stuck with Advantix though, and its persistence paid off, at least in the short term. By 1997 its Advantix product range accounted for 20 per cent of all Kodak sales. However, it looks unlikely that Advantix will be enough to stop photography customers ‘going digital’. And the investment in the Advantix system has only served to reaffirm the association with conventional photography. Even now, too few consumers are familiar with the Kodak Digital Science brand. As Des Dearlove and Stuart Crainer explain in The Ultimate Book of Business Brands, the company needs to change its competetive strategy if the brand is to survive in the long term: ‘Today, Kodak is competing not just with arch rival Fuji but with hungry Silicon Valley predators in search of a share of the emerging digital-photo market. The challenge facing the company is to transform itself into a high-performing organization, capable of holding its own with the likes of Canon and Microsoft’.

However, the Kodak brand has been tied with conventional photographic film since it was introduced in 1885, and the reputation will be hard to change. Furthermore, numerous other photography brands have a broader, more digital-friendly reputation. Not only Canon, but Minolta, Sharp, Sony, Casio and many more.

Furthermore, every time a technology makes a major advance, entirely new brands emerge on the scene. When the home computing market exploded, along came Apple. When mobile phone technology took off, along came Orange. Kodak itself was once a pioneering new brand for a pioneering new technology, famously promoted with the slogan ‘You push the button – we do the rest’. Now though, the brand name carries with it over a century’s worth of brand perceptions which are out of sync with the digital era. The question Kodak executives will resist, but ultimately may have to face, is whether it is time to push the button on the brand itself.

Opinions from the marketing experts are divided. Dearlove and Crainer believe its former successes will be enough to carry the brand through claiming, ‘the Kodak brand is likely to survive in one form or another – it is too valuable to be allowed to die.’ Ries, on the other hand, believes Kodak doesn’t stand a chance: ‘The Kodak brand has no power beyond the realm of conventional photography.’

If Kodak is to stand a fighting chance it needs to make some tough and potentially risky decisions. It will find it increasingly hard to keep one foot in conventional photography and the other in digital. After all brands are built on ‘either/or’ rather than ‘both/and’ policies.

As branding is a process of differentiation, Kodak must still preserve a unique identity in order to stand out from its competitors. At the same time, it must be able to form a brand image that is as cutting-edge as the technology it is starting to promote. This is by no means impossible. After all, providing photography survives in some form Kodak will have a fighting chance. Its strategic partnership with AOL for its ‘You’ve got Pictures’ service was certainly a move in the right direction.

It will, however, mean making some tough and difficult decisions. Among these will be the most difficult decision a brand ever had to make: should it divorce itself from its own heritage? Although difficult, it is better that this decision is made by the brand on its own accord, rather than forced upon it at a later date by the state of the market. Whether it will be possible is another question entirely, and only time will tell. Ultimately, Kodak may be forced to create a new brand altogether.

Lessons from Kodak

  • Markets do not stay static. Markets are always in a constant state of flux, especially those which are based around technology.
  • Brands have a lifespan. The Kodak brand has been around since the 1880s, making it one of the oldest technology brands in existence. Now, the brand may be reaching the end. ‘There is a time to invest in a brand and there is a time to harvest a brand,’ says Ries. ‘And, ultimately, there is a time to put the brand to sleep.’
  • Success is a double-edged sword. The more successful a brand becomes within one market, the more difficult it becomes for the brand to adapt when that market changes.

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