KODAK TAKES ON HP & EPSON WITH NEW AD CAMPAIGN

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Date: Tuesday March 31, 2009 11:48:38 am
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    http://www.bloomberg.com/apps/news?pid=20601101&sid=aw6Pp.i9Ug.Y&refer=japan
    Kodak Takes on H-P, Seiko Epson With New Ad Campaign
    March
    09 — Eastman Kodak Co. has started a new global marketing campaign
    emphasizing the low ink costs associated with its consumer printers,
    taking on rivals such as Hewlett-Packard Co. and Seiko Epson Corp.The
    “Print and Prosper” campaign, begun yesterday in the U.S. and Canada,
    will use television, newspapers and the Internet to try to convince
    consumers to switch to Kodak printers, the Rochester, New York-based
    company said in a statement. Kodak will start marketing in other
    countries in coming months.

    Chief Executive Officer Antonio
    Perez, who spent 25 years at Hewlett-Packard helping develop its
    printers, has pegged the devices as one of Kodak’s three “core
    investments.” The company’s printers sell for 15 percent to 35 percent
    more than those from rivals including Hewlett-Packard, Seiko Epson,
    Lexmark International Inc. and Canon Inc., while ink costs about half
    as much, allowing customers to save an average of $110 on ink a year,
    according to Kodak.“George Eastman wanted to make photography
    affordable for everyone,” Kodak Chief Marketing Officer Jeffrey
    Hayzlett said in an interview today, referring to the camera pioneer
    who founded the company in 1880. “Now we’re trying to make printing
    affordable for everyone.”Sales have declined since 2006 at Kodak, which
    has forecast a fourth straight annual revenue drop for 2009. The
    company introduced its consumer-inkjet printers in 2007, the year it
    concluded a $3.4 billion restructuring that eliminated 28,000 jobs in
    an effort to shift its focus to digital products from traditional film.

    ‘People Who Print’
    With
    the new campaign, Kodak is targeting “high ink- burners,” or people who
    print a lot, Hayzlett said. The company set up a Web site where
    consumers can calculate the difference in ink costs if they switched to
    a Kodak printer. It’s also using blogs and social-networking sites to
    spread awareness.More than a million consumers are using Kodak’s
    printers, and the company is aiming to double that number this year, it
    said. Advertising agency Deutsch Inc. developed the campaign for Kodak,
    which didn’t disclose exactly how much the marketing would cost.

    Spending Millions
    “We’re
    spending a significant amount,” Hayzlett said. “It’s in the many
    millions of dollars.”Cross Research analyst Shannon Cross estimated in
    February that the consumer-inkjet business costs Kodak more than $300
    million a year, and said abandoning the venture would help conserve
    cash. Cross cut her price target on Kodak’s stock to $1 from $6 at the
    time, and said the company may announce a restructuring in 2010 to
    follow one this year. Kodak said in January it will eliminate as many
    as 4,500 jobs in a 2009 overhaul that may cost as much as $300
    million.Canon will “keep developing and selling products to meet our
    customers’ needs,” the Tokyo-based company, Japan’s largest maker of
    office equipment, said in an e-mailed response to Kodak’s campaign.
    Kenkichi Shibata, a spokesman for Seiko Epson in Tokyo, declined to
    comment. Calls placed to Hewlett-Packard and Lexmark weren’t returned.

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