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 user 2007-03-13 at 10:49:00 am Views: 47
  • #17566

    Kodak Bucks Industry Trend
    Sells Ink Cartridges for Less Than $15, Backs Effort With Multiplatform Campaign
    Pa. mar 07 — Did you know printer ink is three times more expensive
    than premium champagne? Kodak plans to help consumers come to that
    realization this month with an aggressive “think ink” marketing
    strategy as it enters the highly competitive inkjet printer and
    cartridge market.The cheaper-ink strategy Kodak is undertaking has
    never been done before in the $50 billion inkjet printer industry.The
    strategy revolves around Kodak’s cheaper ink costs vs. the
    traditionally high price of ink. And while that may sound like a simple
    price-advantage marketing gambit, it’s something that’s never been done
    before in the $50 billion industry.

    Inverting the model
    until now have been sold at a loss, with profits being made up by the
    later sales of high-margin ink cartridges. Kodak’s plan is to invert
    that model by selling premium-priced printers with no discounts, and
    then also selling much-cheaper ink cartridges for a profit, although at
    slimmer margins.To do that, the company will aggressively advertise its
    lower ink prices—$9.99 for black and $14.99 for color cartridges—on
    packaging, in-store displays, and in mass-marketing advertising. The
    printers range in price from $149 to $299 and will be branded with
    Kodak’s popular EasyShare moniker as EasyShare All-in-One printers.”Our
    strategy around point of sale is to crystallize for consumers that
    they’re not only buying a printer today, but also buying into three to
    four years of ink purchases,” said Bob Ohlweiler, Kodak marketing
    director of the worldwide inkjet division.

    ‘Plastering their costs’
    you look at where revenue comes from now, almost all of the profits in
    the industry come from cartridges,” said Charles LeCompte, president of
    Lyra Research. Kodak is “plastering their costs per printed page all
    over the place. No one has ever done that before in this market. They
    don’t want to remind consumers how much it costs.”But changing the way
    the industry functions, as well as convincing consumers to buy the new
    products, is a huge task, and one that will require a multifaceted and
    ambitious marketing approach. Mr. Ohlweiler said the effort is “the
    biggest campaign that Kodak has done in many, many years.”Online viral
    efforts already begun center around two humorously dorky guys named
    Nathan and Max who love to print, but lament the high cost of ink.
    Their home on the web at inkisit.com includes viral videos that have
    been seeded on YouTube. They’ve also got a MySpace page where they
    provide more ink-related thoughts.

    Truncated message
    traditional ads will be built around the idea and visual image “think”
    with the first two letters in black and the last three in white type,
    creating a truncated “think ink” message that appears as “th ink.”The
    Concept Studio and Animax Entertainment created the Max and Nathan
    online and viral work, while Kodak’s primary agency, Ogilvy &
    Mather Worldwide, is handling the “think” campaign that will appear in
    media including TV, print and online.Mr. Ohlweiler said the target
    buyer for Kodak printers and inkjet cartridges are consumers the
    marketer internally calls “enterprising parents.” Those individuals
    have children and above-average to affluent incomes and want to empower
    their kids’ creativity but don’t want to be hampered by “silly
    economics.” While the Nathan and Max work may not reach them those
    consumers, it will touch people around the target, such as teens, savvy
    friends, consumer advocates and bloggers.

    Exclusive deal with Best Buy
    printers will be available exclusively at Best Buy until June, a choice
    Kodak made to take advantage of Best Buy’s on-the-floor sales staff and
    the retailer’s ability to educate consumers.Whether Kodak will succeed
    with its mission has been widely debated, but most agree the film giant
    needs a hit as it moves to transition to digital. Kodak’s
    fourth-quarter revenues swung into the black for the first time in two
    years, but that gain came through cost cutting.”Kodak is in a bind.
    They’ve finally got a good position in digital cameras, but the only
    place to make money there is printing. For them to succeed, they’ve got
    to succeed in printers,” Mr. LeCompte said.