Within the early 1990s, Kodak entered Russia. On the time, the nation was deep in the center of a turbulent transition from a Communist-run command economic system to a fledgling democracy that was dedicated to pushing by means of the privatization of state-owned enterprises and financial reforms designed to determine aggressive markets. Kodak’s entry into this market posed quite a lot of challenges. Russian shoppers had little data of Kodak’s merchandise, and the buyer marketplace for pictures was very underdeveloped.
Furthermore, aside from state-run shops that had been usually poorly run, right here was little or no infrastructure in place for distributing photographic gear and movies and for processing movie.
To compound issues, Russian shoppers had been poor and unlikely to have the ability to afford all however essentially the most cheap cameras and movies. A decade later, Kodak’s entry into Russia is broadly considered a significant success. Russia accounts for a major proportion of the $2. 59 billion in worldwide gross sales in rising markets that Kodak registered in 2004; and with a progress price of 26 p.c over the prior 12 months,
Russia is the fastest-growing rising marketplace for Kodak, outstripping even China.
How did Kodak do it? First, Kodak had a transparent and constant advertising and marketing message that it communicated to Russian shoppers by means of quite a lot of media, together with radio, tv, and print promoting. The advertising and marketing message was based mostly upon the concept of “saving recollections” by taking photos in a fast and simple manner. “You press the button and we are going to do the remainder” the advertisements said. Because it turned out, this was the proper message for a shopper market that was not used to pictures.
To enhance the core advertising and marketing message, Kodak spent closely on promotional campaigns, exhibitions, conventions, sponsored occasions, and the like, in an try to teach shoppers and lift consciousness of the Kodak model identify. For instance, in addition to straightforward media promoting, Kodak owns a touring picture park with a fleet of scorching air balloons which have turn into extremely popular in Russia. Kodak has additionally invested closely in selling a company picture as a agency that takes a stand in opposition to corruption and black market practices. The corporate has been ery clear about its enterprise practices and about its refusal to have interaction in shady dealings.
In a rustic the place such practices had been as soon as commonplace, and nonetheless persist to a level, this stance has been effectively obtained by shoppers and has helped to construct the corporate’s model picture as an enterprise that may be trusted—which, because it seems, has been good for enterprise. Kodak additionally boosted its company picture by opening a manufacturing facility in Russia to provide cameras, movie, and chemical substances for movie processing. Along with the general public relations profit, this transfer lso helped Kodak decrease its prices by using low cost Russian labor and by avoiding tariffs on imports of photographic merchandise into Russia.
Recognizing the restricted earnings of Russian shoppers, Kodak’s product technique has been to promote lower-end movie and cameras in Russia. Kodak provides easy cameras for round $20 to Russian shoppers, one thing that the corporate can afford to do as a result of the cameras are made regionally. It doesn’t promote disposable cameras in Russia, since at $10 every the associated fee can be too excessive. As an alternative of making an attempt to promote top-quality Kodak Gold movie, hich is standard in the West, the cheaper model, Kodak Coloration Plus, is marketed closely in Russia.
One other of Kodak’s advertising and marketing ways has been to attempt to construct demand for its merchandise by encouraging main enterprises to offer cameras to valued workers, reasonably than the standard bottle of vodka. Kodak has additionally labored carefully with journey brokers, giving them cameras to disclose to their clients. Kodak’s hope, after all, has been that buyers will buy Kodak movie to make use of in these cameras, and to a big diploma, that appears to have occurred.
Lastly, Kodak realized that it wanted to construct a distribution channel for its merchandise. Somewhat than make investments straight in its personal shops, the corporate arrange a franchising program to open Kodak Categorical shops all through Russia to promote its merchandise and develop movie. These proprietor operated shops adhere to strict enterprise pointers Kodak set down in its grasp franchise settlement. The shops are clear, attractively designed, have a constant look that helps promote the Kodak model, and are staffed by pleasant and well mannered workers.
These shops quickly set a ew commonplace for retailing in Russia. Inside three years, greater than 350 Kodak Categorical retailers had opened in Russia, and in the present day there are a number of thousand. This case describes how Kodak entered Russia and promoted their product all through. It describes how they marketed their product and adjusted to the economic system of Russia. In addition they adjusted their manufacturing of cameras and movie to the realm by opening a manufacturing facility in Russia to scale back prices. Opened a franchising program in Russia to distribute their merchandise by means of native shops as a substitute of investing in Kodak particular shops.