kodak gallery: relive the moment · pdf fileas the online and print photo industry continues...
TRANSCRIPT
1| P a g e
2008-2009
American Marketing Association
Collegiate Case Competition
Kodak Gallery: The Next Generation
2| P a g e
Executive Summary As the online and print photo industry continues to evolve due to the introduction of new technologies so too do consumer preferences, wants and needs. Kodak is uniquely equipped to meet these evolving consumer needs by recognizing where and how new technologies will allow consumers to modify their lifestyles in ways that they are able to more conveniently relive the parts of their lives that they find most meaningful. Market Strategy The next generation of Kodak Gallery will seek to captivate the next generation of online gallery users and make Kodak Gallery the premier destination for easy picture/video editing. The Company will accomplish this goal by empowering users with dynamic and innovative applications which allow them to create stunning compilations of their Kodak Moments to be shared and cared for forever. Recommendations:
• Positioning: In order to recognize key changes, site will be re-launched as Kodak Gallery Live
• Target Markets: In addition to the current target market, a youth segment will also be targeted
• Website Recommendations:
o Kodapps Store - Applications sold to help customers save time and be creative
o Kodak Clips - Allowing customers to upload and edit their video clips
o Kodak Lockbox - Free, unlimited uploading of photos and 20GB of video storage
o MyKodak – Personalizing the user’s experience and increasing opportunity to cross-sell
Promotional Strategy Non-traditional media tactics such as targeted internet advertising will be used to help facilitate the viral spread of future conversations about Kodak Gallery Live. Promotional tactics include a camera-phone scavenger hunt contest which aims to create excitement about the site’s re-launch by engaging potential customers with the site’s new features. One-year Measureable Objectives:
• Revenue: Generate approximately $160 million in revenue from new customers
• Membership: Increase member base by approximately 5.5 million
• Content: Increase photos/videos uploaded to site; 1 billion photos and 125,000 videos
3| P a g e
Table of Contents Background Research & Situational Analysis ........................................................................................ 4
Industry Analysis .................................................................................................................... 4 Competitive Landscape ............................................................................................................ 4 Customer Analysis ................................................................................................................... 5 Industry Trends ....................................................................................................................... 6
Primary Market Research .................................................................................................................... 6 Research Overview .................................................................................................................. 7
Primary Research Methodology ........................................................................................................... 7 Primary Research Key Findings ........................................................................................................ 8 Qualitative Research Findings .................................................................................................. 8 Quantitative Research Findings ................................................................................................................ 9 Market Strategy & Positioning .......................................................................................................... 10 Overall Strategy ..................................................................................................................... 10 Site Positioning ...................................................................................................................... 11 Target Market and Proposed Secondary Market .................................................................... 11 Website Recommendations ............................................................................................................... 12 Overview ............................................................................................................................... 12 Kodapps Store ....................................................................................................................... 12
Kodak Clips ............................................................................................................................ 13 Kodak LockBox ...................................................................................................................... 14 myKodak ............................................................................................................................... 14 Partially-Supported Website Recommendations .................................................................... 15 Integrated Marketing Communications Plan ...................................................................................... 15
Promotional Goals ................................................................................................................. 15 One-year Measureable Objectives ......................................................................................... 15
Promotional Campaign Description ....................................................................................... 15 Promotional Campaign Viral Reach ........................................................................................ 16 Campaign Conversions and Costs ........................................................................................... 17 Campaign Customer Lifetime Value ....................................................................................... 19 Conclusion ......................................................................................................................................... 21 Appendix ........................................................................................................................................... 22 Citations ............................................................................................................................................ 39
4| P a g e
I. Background Research & Situational Analysis Industry Analysis The online photo and merchandise market was valued at $1.5 billion market in 2008, according to the Photo Marketing Association.1 Competitors in the industry typically offer storage space for digital photos, online printing services, and customizable merchandise. The fastest growing segment of the market is represented by digital print orders which are picked up at a retail store front, with online orders doubling in volume in 2008 and now accounting for 9.3% of the total market. Prints ordered online and received by mail also increased by 2% in 2008 and now represents 11.5% of the total market.
Competitive Landscape The online photo and merchandise market is dominated by three main competitors; Shutterfly, Snapfish, and Kodak Gallery, who combined control nearly 50% of the market. 2 Within the market, each competitor has sought to differentiate through niche products, services, and positioning. It is also important to note that although Shutterfly and Snapfish represent Kodak Gallery’s closest competitors, retailers such as Wal-Mart and Walgreens have recently gained significant market share within the industry.
Shutterfly In the online photo and merchandise market, Shutterfly has aimed to differentiate through positioning its brand to be associated with quality digital printing, and as a digital picture sharing medium.3 Digital prints are priced well above competitors at 19 cents per-print.4 In comparison, Kodak currently sells prints for 15 cents per-print. 5 However, photo books and merchandise contribute a larger share than do its digital printing services. 6 In addition, indirectly contributing to Shutterfly’s revenue is a viral promotion model through applications such as “Share”, which enables users with limited HTML experience to build personalized web pages with features such as the news, weather, videos, and member polls along with their pictures. The “Share” application feature encourages people to tell their friends, family and colleagues about their Shutterfly page to view their pictures and other content.
Snapfish Snapfish is the volume player within the online photo online and merchandise industry. The Company, which is a subsidiary of Hewlett-Packard (HP), provides a lower cost per-print at 9 cents and often has deals with retailers that help with the sale of HP printers and ink; the site sold 1.5 billion prints in 2007.7 An additional service offered to Snapfish users is the ability to upload videos, a feature which is not currently available on Shutterfly or Kodak Gallery.
Retail Competitors Although Shutterfly and Snapfish represent Kodak Gallery’s closest competitors, retailers such as Wal-Mart and Walgreens have recently crossed into the competitive horizon. These retailers allow customers to upload their pictures to their websites directly and pick up prints in-store. Walmart and Walgreens began offering online-to-in-store printing in 2005, and since that time, the two retailer’s market share taken over nearly a third of the market. 8,9
5| P a g e
Kodak Gallery Kodak Gallery is the market leader in the online photo and merchandise industry, currently controlling 17% of the market.10
Customer Analysis The online photo and merchandise industry is focused on a demographic of female consumers aged 25 -54.
The site has differentiated itself through quality, convenience, and ease of use. (For more information, see Appendix A: Kodak Gallery Extensive SWOT Analysis)
11 Kodak’s primary target market, which have been named “Momfluencials”, is further defined by a higher household income, having children present in the household, and as a sophisticated web user.12
Kodak Gallery SWOT Analysis
Strengths
• Brand image
• Loyal customer base
• Strategic partnerships
Weaknesses
• Narrow product-focus
• Limited revenue model
• Brand is associated with the past, not linked with innovation
Opportunities
• Leverage strong brand image to expand into new markets
• Attract new target market
• Extended services aimed at mobile phones market
Threats
• Rapidly changing technology trends
• Expansion into new markets also means new competitors
• Change may upset loyal customer base
6| P a g e
Momfluencials at a Glance
Industry Trends
Online Social Networking Breaking down the barriers for people to share their content, online social networks such as MySpace and Facebook have the potential to become driving forces in the online photo and merchandise market. These entities are among the most trafficked in the world and have amassed billions of pictures generated by their users. For example, Facebook recently had the 10 billionth photo uploaded to their site compared to Kodak Gallery’s 5 billion photos.13 It is also important to note that the makeup of the online social network user base is unique compared to Kodak Gallery and its competitors. For instance, nearly 76% of Facebook’s users are age 16-24, while Kodak Gallery’s users are mostly 25-54. 14 Online galleries such as Photobucket and Flickr have already begun to capitalize on the popularity of online social networks by offering services that integrate with and enhance users’ experiences while on the social networks.15 Mobile Media Consumption As picture quality on cell phones increases, people are using their phones as a substitute for their digital cameras.16 Of the pictures taken on the phone, however, only 3% are ever printed, compared with 13% of pictures being printed that were taken with a digital camera. This discrepancy is likely due to the current industry transition “from fashion to fashionable functionality," according to market research firm NPD.17 In fact, last quarter the Apple iPhone dethroned the Motorola RAZR phone as the “most purchased cell phone”. With the Apple iPhone coming to market with a built-in 2-megapixel camera, and the Motorola/Kodak hybrid Motozine ZN5 coming with a 5-megapixel camera, consumers are going to continue to create and share their pictures using their phones.18 Additionally, 43% of users indicated they bought their cell phone because of the need for a camera.19 With the proliferation of 3G Networks and WiFi internet on phones, users are now able to easily transfer and sync their pictures from their cell phone to the Web. As of June 2008, there were over 64 million owners of 3G enabled devices within the United States; an 80% increase in the past year.20
Demographics Psychographics Lifestyle Usage
Females Extremely brand loyal Highly
Connected Strong product
purchase influencers
Ages 25 - 54 Strong desire to stay
connected
Sophisticated web users
Buy from companies to which they are
brand loyal
Mothers Living at home aged 1-3
-
Value capturing the “special” moments in
their family’s lives
Opinion Leaders
Send coupons and promotional offers via
e - mail to others
$75,000 + household income
Unaware of customizable product offerings or think they are too complicated
Time Pressed Early adopters of new
products/services
7| P a g e
Website Applications Websites are increasingly having certain components modularized through the use of applications (apps) which increase the sites functionality to users. For example, Facebook launched their Apps Platform just 18 months ago and already has amassed over 52,000 plug-in apps that interact with user’s content including pictures, videos, and other core site functionality.21 The apps have been so popular on Facebook, that 95% of Facebook users have at least one application in use. Another notable implementation of applications is Apple who has successfully launched an application platform for their iPhone. Having been launched just 6 months ago, the iPhone’s “App Store” currently has over 10,000 Apple-approved applications for free or paid downloads.22 According to investment analysts at Piper Jaffray, Apple is expected to have created a $1 billion market with their App Store within the first year.23
II. Primary Market Research
Research Overview In the development of the situational analysis, secondary data was collected and evaluated based upon its recency, credibility, and relevance to Kodak Gallery. Analysis of this research pointed to areas for further exploration which led to the design and execution of a number of primary research studies. The final research study conducted was a nationwide survey which quantified the relevant findings. Primary Research Objectives:
• Discover how pictures/videos are recorded, saved, and shared with others • Uncover problems experienced when sharing pictures/videos • Identify preferences for features offered by online photo galleries • Evaluate Kodak Gallery’s current website positioning
Primary Research Methodology Depth Interviews In order to begin to gather data relative to areas of further exploration, depth interviews were conducted with members of Kodak Gallery’s current target market. In addition, having found secondary data supporting the youth segment as a potential target market, members of this segment were also interviewed. In total, sixteen depth interviews were conducted with an equal representation of each segment (See Appendix for depth interview questions). Focus Groups After conducting depth interviews, focus groups were used to further explore recurring themes from the depth interviews in a homogeneous group. The collaborative atmosphere helped generate deeper insights than were revealed in depth interviews. Two focus groups, lasting approximately one hour were conducted. Eight participants took part in the Momfluencial group and twelve took part in the separate youth segment. During the focus group, one person acted as the moderator in order to guide the conversation while two others took notes. (For more information, see Appendix B: Focus Group Moderator’s Guide) Survey Using the qualitative data found through the depth interviews and focus groups, a survey was drafted to
8| P a g e
quantify the data and objectively analyze strategic opportunities. (For more information, see Appendix C: Quantitative Survey Questionnaire) Survey Methodology:
• Used secondary and qualitative data to develop questions
• 100 person pilot survey to evaluated question wording and order
• Utilized non-probability, convenience sampling; sampling frame of 2,400 university e-mail lists, social networks, and personal contacts .
• Web administered survey increased scope of data collection; twenty-one states represented in the sample and 40% of survey participants were out-of-state
(For more information, see Appendix D: Extended Survey Methodology)
Data Collection Summary
Primary Research Key Findings Qualitative Research Findings
Overview The depth interviews and focus groups were insightful in developing constructs to later be measured by the survey. Areas in which the qualitative data generated was particularly useful included picture taking behaviors, the life-cycle of pictures taken, and online gallery/photo sharing.
Momfluencials The impact of the data generated relative to where pictures were taken provided the information necessary to infer that it was not a construct worth measuring. On the other hand, how the person recorded, used, and shared pictures did differ. For example, while some mothers still used 35mm
Research Method
Number of Participants Sampling Procedure Analysis Plan
Secondary Data NA Based on relevancy, credibility, currency etc.
• Improve understanding of situation.
• Assist in choosing research methods.
• Resource to compare and help interpret primary research findings
Depth Interviews 16 Non-probability,convenience sampling
• Detailed explanation of individual viewpoints further improves understanding of current situation and customer problems.
• Develop focus group questions
Focus Groups 20 Non-probability,convenience sampling
• Develop further insight into development of survey questions.
• Understand consumers perceptions, emotions, and behavior .
• Begin to generate product ideas and site recommendations
Survey 338Non-probability,
convenience sampling,web-administered
• Quantitatively analyze constructs.
• Perform inter-group comparisons.
• Hypothesize trends about the general population.
• 95% level of confidence (α = .05)
9| P a g e
cameras most also had a digital camera and others preferred cell phones for the ability to take a picture in “just-a-click”. Pictures were often printed, put on CD’s, compiled into scrapbooks, or framed. Many had used online galleries, but had limited knowledge of how to use the services beyond uploading their photos. Youthfluencials Picture taking behaviors differed from the Momfluencial segment in that pictures were more often taken with friends, clubs, and teams as opposed to family. The life-cycle of the picture also differed in that pictures were most often uploaded and shared through online social networks. This group preferred online social networks, such as MySpace and Facebook, to online photo galleries and cited multiple difficulties when sharing their photos using these sites. Another interesting revelation was that awareness of features/new content seemed to be driven by automated recommendations by the websites. Quantitative Research Findings Overview The following tables show data generated by the survey portion of primary research, which helped shape the final recommendations. A number of statistical analyses were used including frequencies testing, cross tabulations, and independent t-tests. Online Gallery Features In the analysis of the survey data collected, the most significant findings were relative to the features which users would like to see offered by an online gallery (see exhibit below). The question asked participants to choose the top five features they would like to see from a photo gallery from a list. In addition, they were asked to rank these features in order of preference. The most frequently chosen feature (80%) was free, unlimited storage. However, perhaps an even stronger finding is that in regards to photo manipulation, nearly a third of the survey participants ranked it as their first choice. (For more information, see Appendix E: Features Most Frequently Desired)
Non-user Response Participants who do not use online galleries were asked to share why not (see exhibit below). The most frequent response of participants was relative to not wanting to download software; this quantitative data reflected the qualitative data found in the focus groups in which both Momfluencials and Youthfluencials stated they disliked downloading software. The data collected from depth interviews and focus groups provided the insights necessary to hypothesize that both users and non-users are disinclined to download software. Additionally, concerns regarding privacy and a perception that online galleries are complicated also deterred non-users.
Q: Feature you would like to see from an online gallery (ranking top 5 of 11 features)
Frequency of Choice
Feature as 1 st
Choice
Free storage so you‘d never have to delete another photo 80% 21%
Photo manipulation/editing 74% 31%
Ability to share pictures with friends and family 64% 20%
10| P a g e
Inter-group Comparison Based on depth interviews and focus groups, the hypothesis was formed that the Momfluencials would differ from the younger segment in regards to certain behaviors. The survey confirmed that there were statistically significant differences between the two groups relative to their use of cell phones.
Cell Phones & Video Sharing The survey measured perceptions of difficultly relative to sharing with certain forms of technology in order to identify areas where consumers currently have problems. Overall, the findings showed that video was more difficult to share than pictures.
III. Market Strategy & Positioning
Overall Strategy Kodak will seek to captivate the next generation of online gallery users and make Kodak Gallery the premier destination for easy picture/video editing. The Company will accomplish this goal by
Q: How difficult is it to share through the following forms of technology?
% Finding sharing video
difficult
% Finding sharing pictures
difficult
Cell phone 47% 16%
Online Photo Gallery 29% 9%
CD 22% 19%
E-Mail 23% 3%
Media Device 7% 4%
Social Network 8% 1%
Question: Youth Mothers
Q: Do you share pictures via cell w/ friends? 59% 40%
Q: Do you share pictures via cell w/ family? 33% 18%
Q: Do you put photos on a CD? 6% 20%
Q : Why don’t you use an online photo gallery? Frequency of Choice
Do not want to download software 33%
Concerns about privacy 33%
Too Complicated 16%
11| P a g e
empowering users with dynamic and innovative applications which allow them to create stunning compilations of their Kodak Moments to be shared and cared for forever. Site Positioning The new site will be an innovative photo editing, sharing, and storage solution. Like its predecessor, it will maintain its differentiation through quality, convenience and ease-of-use; however, it will also be tailored to the needs/behaviors of the next generation of customers who are already sharing their pictures and videos using cell phones, social networking websites and other online mediums such as blogs. Furthermore, an important distinction to be made is that it will not seek to become a social networking site, but rather provide a simple way to integrate content onto these sites while allowing pictures and video clips to be securely stored and edited in unique and creative ways. Furthermore, in order to recognize the key changes and differentiation of the new launch, the site will take on the name “Kodak Gallery Live”. In addition, a new tagline which encompasses the new site’s vision will be introduced; “reLive the moment”.
Target Market and Proposed Secondary Market Kodak Gallery Live will seek to maintain its current target market of Momfluencials while capturing an additional target market. The second target market is a segment of young Americans, henceforth referred to as the “Youthfluencials”. Supporting Data Throughout the research process a number of groups were identified which had potential to increase Kodak Gallery’s user base and profitability. For example, exploratory research was dedicated to the middle-aged segment of Americans, often referred to as the “baby-boomers”. However, using insights gained through depth interviews and secondary research it was decided that the Youthfluencial market had greater potential. The Youthfluencials play a significant role in social/technological trends which are beginning to impact the online photo and merchandise industry. For instance, a comScore study found that 34% of all pictures posted on the internet in May 2008 were from youth.24 Additionally, the Youthfluencials are easily identifiable and accessible through the internet which increases their value because they can be more easily targeted in the promotion of Kodak Gallery Live.
12| P a g e
Youthfluencials at a Glance
IV. Website Recommendations Overview Based on the analysis of the primary research, actionable recommendations were developed to introduce a new platform in which both photos and videos can be uploaded, edited, shared and securely stored. The recommendations aim to strengthen the positioning of Kodak Gallery Live as the premier destination for easy-to-use editing as well as to generate increased revenue for the Company. (For more information, see Appendix F: Website Recommendations Old Versus New Comparison)
Content- integrated applications
Description of Feature Through the development of an Application Programming Interface (API), Kodak can allow 3rd party developers to create applications to increase the sites functionality. For instance, applications will allow users to edit and integrate with pictures and video in innovative ways. The applications can be useful, fun, exciting, time-saving, and humorous. Additionally, the Kodapp platform will be built to be compatible with popular online social networks such as Facebook and MySpace enabling users to share their creativity with others. (For more information, see Appendix G: Extended Information of Website Recommendation: KodApps)
Revenue Contribution Although some KodApps would be free, many would generate revenue through a one-time fee or a nominal recurring monthly subscription. In order to encourage the development of KodApps it is recommended to introduce a profit sharing program with third party developers. For example, Kodak Gallery Live could adopt the iPhone App Store model, where 3rd party developers receive 70% of revenue generated on the sale of their applications while the remaining 30% goes to Kodak.25
Demographics Psychographics Lifestyle Usage
Males and Females Self expressive Very social Strong product purchases influencers
Ages 13 - 24 Want to find their own identities
Spend extensive amount of time
online
Buy from companies to which they are
brand loyal
High disposable income
Want to belong Born within or
lived most of life in Internet age
Send coupons and promotional offers via
e - mail to others
Students Creative Willing to learn new technology
Early adopters of new products/services
13| P a g e
Supporting Data According to the survey data, 58% of survey respondents picked “photo manipulation/editing” as one of their top five features they would like to see offered by online photo galleries. Nearly half of these respondents (47%) picked it as their top choice. The specific recommendation of the API system was realized based on key findings learned from focus groups and in-depth interviews. In particular, respondents expressed desire for creative ways to manipulate content easily. Respondents pointed to the new Facebook Apps Platform which allows developers to interact with users’ profiles and core site features. These Facebook Apps have been so widely adopted that 95% of Facebook’s 120 million users have used at least one application built on Facebook’s API framework. Since its launch just 18 months ago, the Facebook Platform has amassed over 52,000 applications with over 400,000 contributing developers.26
Video uploading /editing
Description of Feature To meet the demands of the next generation of Kodak Gallery users, video editing must be incorporated into Kodak Gallery Live. This service will be offered to help users to easily upload, edit, and add effects to their video compilations.
Revenue Contribution Kodak Clips will be offered for free; revenue would be sought through video-editing KodApps as well as through products, such as digital impact frames which have been uploaded with the user’s generated content.
Supporting Data Primary research shows 63% of survey respondents record videos and approximately 25% upload video to online social networks. The data represents a growing trend in digital media which shows increased growth in the consumption of online video. A milestone was reached in December 2007 when over 10 billion videos were viewed in a single month.
Online galleries such as Flickr and Photobucket have also implemented a way for 3rd party developers to interact with components of their websites. Kodak Gallery Live seeks to differentiate itself by allowing KodApp developers to also take part in profit-sharing of ordered merchandise such as photo prints, mugs, t-shirts, and other specialty items.
27 Online networks such as MySpace accounted for a significant amount of activity with 40 million users watching 322 million videos during that month. Even though many videos are being shared online, survey data indicates that 71% of users frequently have at least some trouble while sharing videos. Of these, users had dealt with two main problems: uploading of videos and editing of videos. Currently the only competitor offering on-the-fly video editing is Photobucket, although many users have expressed difficulties using and sharing their compilations.28 According to the Photo Marketers Association, “People love their video clips… they just don’t know what to do with them.”29
14| P a g e
Unlimited, Guaranteed Storage of Pictures and Video Clips
Description of Feature By providing unlimited storage of pictures and video clips, users never have to delete another media file again. By positioning this service as a guaranteed secure storage place, Kodak Gallery Live becomes an important part in the user’s life by safeguarding all of the memories they have captured in pictures and videos. (For more information, see Appendix H: Extended Information of Website Recommendation: LockBox)
Revenue Contribution Unlimited picture storage will be offered for free, just as it is by competitors such as Shutterfly. With the launch of the video platform, users will also be able to store up to 20 gigabytes of video storage for free. Revenue would be generated indirectly through the purchase of picture/video editing applications as well as directly thorough an extra monthly fee, which provides 100 gigabytes of storage for $20 per-year. If the user spends at least $50 on the site during the year, the extra $20 fee for unlimited video is waived, making this a completely free service.
Supporting Data According to the survey data , 63% of respondents picked “free storage so you would never have to delete another photo” as one of their top five features they would like to see offered by online galleries; 26% of these same respondents picked this as their very first choice. Currently, the Kodak Gallery Terms of Service states that after 12 months, “we may delete the pictures from your account.”30
Analytical Customer Relationship Management System
Description of Feature By analyzing user trends and comparing that information to the known demographic and psychographic profiles of individual users, Kodak Gallery Live can promote on-the-fly the tools and services users are statistically most-likely to use, and can target specific products to the users statistically most-likely to purchase those items. By minimizing the “clutter” of available services and products, Kodak Gallery Live will provide personalized website experiences for each user. (For more information, see Appendix I: Extended Information of Website Recommendation: myKodak)
However, focus groups and depth interviews showed that for certain people, especially new mothers, pictures represent a lot more than just ink on paper. Pictures are memories, and parents want special memories (like their baby’s first steps) to last forever. While this service is currently offered to Premier account holders only, by offering this up-front to new users many people will choose Kodak Gallery Live as the home for their pictures to store.
Revenue Contribution The myKodak website enhancement would indirectly generate revenue through more relative product
15| P a g e
offerings for each customer and increased opportunity for cross-selling. In addition, it could help anticipate future customer needs.
Supporting Data Research findings suggest that there is a major awareness issue amongst users regarding the availability of certain products and services currently offered on Kodak Gallery. Focus group participants indicated that current photo services websites (including Kodak Gallery) are too overwhelming and complicated. In comparable implementations of analytical CRM systems, benchmark firms were able to increase profits by over 100% after implementation.31
V. Integrated Marketing Communications Plan
In addition, the firms increased customer retention rates as well as overall customer loyalty.
Partially-Supported Website Recommendations
Two website recommendations were partially supported by primary and secondary research. Further analysis of these items may prove valuable for Kodak. (For more information, see Appendix J: Partially-Supported Website Recommendations)
Promotional Goals The goal of the promotional plan is to engage target markets with the new features offered by Kodak Gallery Live, allowing them to creatively edit and manage their photos and video clips. Promotional tactics will utilize targeted online advertising in order to reach specific markets in social settings where the word-of-mouth (WOM) about Kodak Gallery Live may be fostered and encouraged. In this way, the promotional budget would be spent efficiently through highly targeted communications that make each individual reached a facilitator of future conversations about the website.
One-year Measureable Objectives • Revenue: Generate approximately $160 million in revenue from new customers • Membership: Increase member base by approximately 5.5 million • Content: Increase photos/videos uploaded to site; 2 billion photos and 125,000 videos
Promotional Campaign Description
Momfluencial Campaign The “make your baby a star” contest seeks out Momfluencials, especially those with newborn babies. Mothers of newborn babies were selected as the niche target of this contest because a mother takes more pictures in the first year of their first child’s life than in all of the other years in her life combined.32 The campaign will be co-branded with a leader in the baby product category such as Gerber, Enfamil, or Huggies. The contest allows Momfluencials to showcase their baby on the actual packaging of the product for a month. In order to enter the contest, contestants must use a free KodApp that will allow them to easily crop their baby’s face out of a picture and place it on mock packaging. For instance, if Gerber were the partner, contestants would use the “Gerber KodApp” which would allow the mother to view a photo of the Gerber bottle packaging with their baby’s picture on it. In order to win, the Momfluencials will be encouraged to share their creations with their friends and family using the mediums they are already on such as social networks, email, blogs, and cell phones. The number of views will be tracked and the mother with the most unique views wins a $25,000 college scholarship for their child. Additionally, 25,000 runner-ups will receive a $5 KodApps card that can be redeemed on
16| P a g e
Kodak Gallery Live. Youthfluencial Campaign Kodak Gallery Live will reach Youthfluencials through a 12-week cell phone scavenger hunt called “The Da Vinci Kodak”. This contest allows users to log into the Kodak Gallery Live website each week to view the current clues of the contest. The clues come in the form of a riddle which prompts them to use their cell phone to capture a picture or short video clip of the object they think is referenced in the riddle. The user then uploads their picture to the contest website. Riddles will be released each Friday, and users will receive a corresponding e-mail and text message. Users starting the contest late (e.g. after the first clue is released) can solve and submit pictures for all previous clues until they are caught up. Additionally, contestants are encouraged to discuss the riddle online or offline with friends and family before submitting their picture. However, once a picture is submitted and the next riddle is released, the user cannot change their previous submissions. At the end of the 12-week period, the answers to the riddles will be released and a user’s uploaded content will be automatically embedded into a personalized video that the user can publish to his social networking and blog websites. Winners will be chosen based on the accuracy of solving riddles, the creativity of content capture, and the judge’s overall ratings. One grand prizewinner receives $25,000 and 25,000 runner-ups receive a free $5 KodApps card. Promotional Campaign Viral Reach Both the the Momfluencial and Youthfluencial “reLive the moment” campaigns will initially be advertised on targeted websites as well as during internet TV shows. The purpose of the ads is to target these influential and highly-connected moms and youths and present them with the contest in a way that makes it worth talking about. Word-of-mouth market research firms Keller Fay, Burson-Marsteller, and ChatThreads have recently documented research quantifying the reach of viral contest campaigns in the Harvard Business Review.33 Based on their findings, each is expected to tell about 16 people about their experience, with each of the people told telling three others, and each of these telling slightly over 1.5 people on average.34
According to the statistics-driven metrics these marketing firms propose, the Momfluencial campaign will ultimately reach about 11 million people when taking into account the viral reach of the campaign; new Kodak Gallery Live accounts is estimated to increased by approximately 2 million. Following the same assumptions in regards to reach, the Youthfluencial campaign is estimated to directly reach approximately 1,150,000 people, create campaign awareness among 17 million people, and ultimately result in 3.3 million new Kodak Gallery Live accounts.
17| P a g e
Momfluencial Campaign Reach
Youthfluencial Campaign Reach
Campaign Conversions and Costs In order to achieve a desirable reach, the Momfluencial campaign has been allocated $426,868. Just under $100,000 of this amount is designated for advertising on “mommy blog” websites, $215,000 on Internet TV advertising, and $112,500 in contest prizes. Contest prizes include a $25,000 college scholarship and 25,000 $5 KodApp cards. The KodApp cards incur a cost at 70% of their value or $87,500 cost; this money is used to pay third-party developers (the remaining 30% is retained by Kodak). The Youthfluencial campaign will use slightly more of the budget, at $572,000. Of that, $266,000 has been allocated for social network advertising integration, $193,500 for targeted Internet TV ads, and $112,500 in prizes and poromotional KodApps giftcards. In total, the combined cost of the campaigns will be $998,868.
Campaign Reach & Word of Mouth Youthfluencials
Reach # People reached Through WOM
% Creating Kodak Gallery Live Account
# Creating Kodak Gallery Live Account
Contest Participants 115,000
1,886,000
5,808,880
9,352,297
17,162,177
16 36% 40,825
448,868
1,382,513
1,496,367
3,368,574
1st Generation WOM 3 24%
2nd Generation WOM 1.5 24%
3rd Generation WOM 16%
Totals
(WOM)
Campaign Reach & Word of Mouth
( WOM ) Momfluencials
Reach # People reached
through WOM % Creating Kodak
Gallery Live Account # Creating Kodak
Gallery Live Account
Contest Participants 74,842
1,227,410
3,780,422
6,086,479
11,169,152
16 36% 26,569
292,123
899,740
973,837
2,192,269
1st Generation WOM 3 24%
2nd Generation WOM 1.5 24%
16%
3rd Generation WOM
Totals
18| P a g e
Cost Assumptions The cost of both the Momfluencial and Youthfluencial campaigns include direct advertising on social networking websites, blogging websites, and using targeted video ads during key internet TV shows. For all mediums, a cost-per-click (CPC) model is recommended so that the campaign can base its success from actual leads rather than impressions. The average conversion rate for views (impressions) into clicks for online blogs has been estimated to be .04%.35 With a more captive audience, Internet TV advertising generates a higher click-through rate, which is estimated by comScore to be .08%. Since Internet TV ads are similar to conventional Internet ads, they can be purchased at a pre-set CPC rate. The campaign should set its rate competitively. For Momfluencial and Youthfluencial targeted websites the estimated cost would be set at 38 cents based on suggested bidding prices.36
Youthfluencial Campaign Cost
Internet TV advertising is slightly more expensive and has been allocated 42 cents per click.
Momfluencial Campaign Cost
Youthfluencials Campaign
Online Views Per Month
Total Clicks (.04 - .08% / view)
Contest Participants Promotional
Cost
Facebook 2,916,667 350,000 35,000 $133,000
MySpace 2,916,667 350,000 35,000 $133,000
(Online) TV Ads 622,000 450,000 45,000 $193,500
Totals 6,455,333 1,150,000 150,000 $459,500
$ 572,000 Total Campaign Cost (Including Prizes):
(10% of Clicks)
Momfluencials Campaign
Online Views Per Month
Total Clicks (.04 - .08% / view)
Contest Participants
(10% of Clicks) Promotional Cost
Cafemom.com 1,113,619 133,634 13,363 $53,454
Parentsconnect.com 956,552 114,786 11,479 $45,914
(Online) TV Ads 622,000 500,000 50,000 $215,000
Totals 2,692,171 748,420 74,842 $314,368
Total Campaign Cost (Including Prizes): $ 426,868
19| P a g e
Campaign Customer Lifetime Value The value created by those reached through the “reLive the moment” campaign, has been projected over five years with an annual attrition rate of 7% based on internal customer loyalty data; 93% of current Kodak Customers are considered “loyal”.37
KodApps Revenue Kodak Gallery Live’s marketplace for photo and video editing KodApps will help indirectly increase the sale of prints and customizable merchandise. While many KodApps are free, others will generate revenue through a one-time fee or subscription. Using Facebook as well as Apple’s iPhone applications as a benchmark, the customers reached through this campaign have been projected to use 10 to 15 KodApps per-user, earning on average $0.50 per application downloaded.
38 In the first year, KodApps are expected to generate over $26 million in revenue.
Digital Prints Revenue Currently, 85% of new customers at Kodak Gallery print photos within the first year.39 While this data can be used for the Momfluencials who represent Kodak Gallery’s current customer base, the Youthfluencials prefer to post and share their pictures online rather than order and make prints. The primary research collected indicated that only 30% of youths surveyed print their photos. Thus, assuming the survey population is representative of the Youthfluencial market, 30% of Youthfluencials who are new customers will be receptive to printing pictures. Using this information, 85% of the picture-printing Youthfluencials will also print photos on Kodak Gallery Live; 13% of digital camera pictures taken are printed or approximately 300 per-year.40
Customer Lifetime Year 1 Year 2 Year 3
Year 4 Year 5
Customers from
Campaign 5,560,843
5,560,843
5,171,584 4,793,067 4,441,047
Customer Exit 389,259 378,517 352,021 326,517 Remaining Customers 5,560,843
5,171,584 4,793,067 4,441,047 4,114,823
In this way, at a price of $0.15 per-print, the revenue contribution in the first year of the Youthfluencials who print their photos will be just over $38 million while Momfluencials will contribute another $83 million.
Merchandise Revenue Following Kodak Gallery’s customer usage data, 30% of new customers purchase merchandise within the first year. Based on this finding, it has been estimated that Momfluencials will generate $6 million in merchandise sales; assuming an average annual purchase of $10 in merchandise. In addition, primary research collected through depth interviews and focus groups revealed that when Youthfluencials printed photos, they often used the pictures creatively to make a gift. In projecting Youthfluencial revenue contribution, it was assumed that the 30% who currently print photos (1.1 million) might also decide to purchase merchandise; projected revenue contribution in the first year is approximately $3 million.
20| P a g e
Momfluencial Projected Revenue
Youthfluencial Projected Revenue
Momfluencial Projected Revenue
Revenue Growth Assumptions Loyal, returning customers are more valuable to any company because they cost less to maintain and often purchase a larger share of goods/services.41
Youthfluencial
Revenue Projection
Year 1 Year 2 Year 3 Year 4 Year 5
Prints $38,654,306 $41,940,009 $44,332,696 $46,089,557 $47,332,295
Applications $16,000,726 $22,321,013 $27,521,249 $25,437,954 $23,511,467
Merchandise $3,031,717 $4,229,245 $6,952,737 $8,033,038 $8,909,467
Total Revenue $57,686,829 $68,490,226 $79,797,681 $79,560,550 $79,753,371
For this reason, beyond the first year sales projections, a list of assumptions was created in order to increase the accuracy of the long-term value of the new customers. Print: It is assumed that in the first five years Momfluencials will print 50 more pictures per year due to increased demand caused by photo editing using KodApps as well as the fact that Kodak Gallery Live will provide easier access to print pictures from users’ increasingly sophisticated camera phones. However, only 30% of Youthfluencials reported printing photos during the quantitative survey. Therefore, when calculating the projected sales, the number of those printing pictures was discounted by 70% for Youthfluentials.
Momfluencial
Revenue Projection
Year 1 Year 2 Year 3 Year 4 Year 5
Prints $83,854,306 $90,981,922 $96,700,786 $101,173,197 $104,545,637
Applications $10,413,280 $14,526,526 $18,012,891 $16,751,989 $15,579,350
Merchandise $6,576,808 $9,174,648 $15,168,751 $24,687,142 $19,679,179
Total Revenue $100,884,394 $108,260,842 $129,882,428 $142,612,328 $139,804,165
21| P a g e
Kodapps: Applications sales on a per-customer basis are also assumed to grow by five applications each year due to the infancy of the industry and projected growth of demand, and eventually maturing at 20 per-person/per-year in year 3.42 Merchandise: According to internal Kodak Gallery data, 30% of new Momfluencial accounts purchase merchandise the first year and by the third year 40% of new accounts will have made a purchase.43
VI. Conclusion
However, it is assumed that Youthfluencials who do not print photos as often would also not create merchandise initially, thus the number of accounts purchasing merchandise was discounted 70% for Youthfluencials. Also assumed is the average amount spent at $10 and an increase after the first year by $5, which matures in year 3 where the average amount spent stabilizes at $20. The increase in the average amount spent is to account for increased demand generated by Kodapps.
The recommendations provided represent an action plan for Kodak to leverage core competencies, enabling the Company to attract new customers and expand into new markets. The execution of these recommendations have been projected to create over $200 million in new revenue contribution in the first year; including more than $25 million from revenue sources that previously did not exist. Additionally, in recognition of the threats presented by competitors and the rapidly changing environment in the online photo and merchandise industry, the recommendations effectively position Kodak Gallery Live to not only stay relevant but become an integral part of customer’s lives by empowering users with dynamic and innovative applications which allow them to create stunning compilations of their Kodak Moments to be shared and cared for forever.
22| P a g e
VII. Appendix Appendices Contents:
A. Kodak Gallery Extensive SWOT Analysis B. Focus Group Moderator’s Guide C. Quantitative Survey Questionnaire D. Extended Survey Methodology E. Features Most Frequently Desired F. Website Recommendations Old Versus New Comparison G. Extended Information of Website Recommendation: KodApps H. Extended Information of Website Recommendation: Kodak LockBox I. Extended Information of Website Recommendation: myKodak J. Partially-supported Website Recommendations
Appendix A: Kodak Gallery Extensive SWOT Analysis
Strengths: The Kodak brand has been in the lives and homes of Americans for over 100 years. They have built the brand into one of the most valuable brands in the world, and they have positioned their brand to be known for quality, trust, and reliability. Being such a deep-rooted company has allowed Kodak to have many pre-existing distribution and communication channels. Kodak has been able to leverage its brand position to form partnerships with other leading brands. Their existing partnerships with Apple, Microsoft, Amazon, Best Buy, CVS, and Target has allowed Kodak to rapidly infiltrate the digital picture service industry and allows Kodak to quickly distribute their future service and product offerings. For example, visitors to any CVS around the nation can sign up for Kodak Gallery directly in store. Since Kodak products and the Kodak Gallery are being combined with brands and placed where consumers are already at, they have been able to amass over 70 million customers since their acquisition of the service in 2005.
• Kodak brand image portrays quality, trust, and reliability. • Customers get real Kodak prints of their digital pictures • Digital products are now Kodak’s best sellers. • Large international employee network • Kodak Gallery already has established 70MM customers • Kodak has existing distribution and production channels • Wealthy target audience • Customers are tech-savvy and loaded with communication technologies • Target audience lacks time, so they are willing to pay premium for convenience • Very high customer satisfaction • Customers often do repeat business • Loyalty of customers is increasing • Kodak leads competitors in net revenue dollar share • Large financial backing • Large company has a lot of pre-existing resources
23| P a g e
• Kodak Gallery is partnered and co-branded with leading brands; such as Adobe, Apple, Microsoft, Amazon, Best Buy, Target
• Existing partnership with leading/exclusive content providers such as famed children’s author Eric Carle
• Free tools for sharing pictures on social networking sites like MySpace • Distributorships with CVS and Rite-Aid for same-day pickup • Innovative mobile technologies such as customized postcards sent in the mail from your cell
phone • Kodak Gallery has a large product line • Lots of photo editing features • Explore use of single use digital cameras and single use camcorders • Target market takes a lot of pictures, especially during first year of first child’s life
Weaknesses: Kodak is competing in a fast-paced new environment where the technology is changing just as fast as consumer trends. When Kodak just eight years ago vowed to start focusing on digital cameras, they didn’t anticipate the shrinking margins on digital camera profits. Kodak is an established brand and recently has undergone yet again another massive business model adaptation to new technological and consumer trends in an effort to ditch the digital camera market and become a digital solution provider. Kodak CEO, Antonio M. Perez, describes the digital camera industry is a “crappy business” due to the razor-thin profit margins. As such, they have been thrown into a transformation from being a hard products manufacturer to digital services provider. While initial revenue dollars show that they appear to be on the right track with getting away from digital cameras, they are still a very traditional company who is not used to the fast-paced industry they are now competing in. In order to generate profits, they have begun using “annoying” revenue tactics such as threatening to delete all of their customers’ pictures if they don’t make a purchase every 12 months. Additionally, they do not offer free web galleries to share pictures with friends and family unless the user signs up for the $25 per year premium service plan, a feature other top digital picture service websites offer for free. While Kodak does offer some of the best free photo editing software for desktop download, the tools available as integrated into their website are too simplistic.
• Very traditional company • Uses annoying tactics to increase revenues (in the short term), such as deleting accounts
and pictures of people who don’t make a purchase within a year • Old revenue model wont sustain company • Highly competitive market • Sharing backend with Snapfish may make it hard to differentiate offerings • Difficult to view / share pictures on Kodak Gallery (account signup required) • Photo editing features are limited on site, and expanded tools require a download • Competitors’ customers are loyal, and may be difficult to switch over • Among one of the top leading companies in industry to not provide free web site gallery
with free account (available for $25 / yr) • Target audience lacks time, so they might not want to take the time to learn how to do
more with their pictures Opportunities The quickly-changing internet environment allows for many opportunities. Through market research Kodak Gallery can prioritize the launch of new features that benefit the existing and proposed new target markets. Through the integration of 3rd party development and profit-sharing, Kodak Gallery can
24| P a g e
position itself as an innovative leader in the digital picture editing, storage, printing, and sharing industry.
• Leverage existing brand through content and utility partnerships • Target secondary market extensively • Innovative convergence hardware (MOTOZINE) • Increased ability to share pictures from device-to-device • Allow users to sell merchandise to their friends and families • Allow 3rd party developers to interface with users’ content • Increase bi-directional integration with social networking sites • Offer personalized website service experience, tailored to the abilities and needs of the
target consumer • Continue to develop highly-connected integrated cameras (like a camera phone, but without
the phone, such as the Kodak One Camera). • Work with merging photo-sharing/depository websites to offer their prints printed and
mailed • Allow for streamlining of picture-sending and printing directly from phone or camera, which
allows direct ordering without having to put pictures online first • Allow for sharing of additional information with pictures, such as text, sounds, and video. • Leverage (and expand) existing Kodak Kiosks with connectivity and editing features • Partner with more exclusive content providers, as was done with famed author Eric Carle
and Martha Stewart • Provide information and/or free accounts to pregnant women or those with newborn babies • “One-click switch” from competitors
Threats As technology adapts to consumers needs, and consumers build off of the available technology, the industry is growing and changing at a pace that is difficult to keep up. Kodak’s greatest threat is falling behind the curve again, as almost happened when consumers switched from analog to digital. Along with this threat is the technological advancement of personal picture printing devices. Such as that as the printing-quality gets better at home, consumers will have less need to have a 3rd party print the photos. Kodak will need to assess the profitability of being in that hardware business segment, and they may need to more closely define the niche that Kodak Gallery operates in, which they may decide to focus on printing on premium products, as more consumers shift to printing the basic photo prints at home.
• Inability to accurately anticipate the constantly changing internet environment • Offline retailers like Walmart, Walgreens, and Costco increasing market share • Photography market undergoing drastic changes over the past 5 years switching from
analog to digital, may continue at this pace • Many emerging “tech-savvy” firms are popping up that act as a photo depository • Faster cell phone speeds may make sharing pictures direct, bypassing the need for a photo
depository website • Higher-quality printers are emerging with lower prices, which may cause people to store and
print photos in-house
25| P a g e
Appendix B: Focus Group Moderator’s Guide
1) Introduction: Hello, thanks for coming today. We are doing some research about how you use photography. Whatever you have to say will be very valuable, so please feel free to share with us whatever you are thinking. Sometimes the best info we get is something that just rolls off your tongue, so don’t hold back!
2) Ice Breaker: Name, hometown, something interesting about yourself
3) Lead Question: Tell me about how you use photography.
Probe: How do you record photos (use digital camera, film, cell phone camera) Probe: Ask about each one specifically.
4) What is the life-cycle of your pictures? Probe: Do they stay on your camera/phone? Do you print? Why do you print? Where do you print? Where do you keep your photos? Who sees your photos? How do the see your photos? What do you do with your photos? How do you look at your photos (slideshow, photo album)
5) What experience do you have with online picture galleries?
Probe: Which do you use? How often do you use them? How do you use them? What problems do you have?
What online galleries have you heard of? Do friends send them links
6) Do they have experience with Kodak Gallery?
Probe: What do they like / dislike?
What do they like / dislike about other online galleries? If no experience with online galleries: Why not? What makes them like or dislike a website? What do they think about Kodak as a brand? What comes to mind when you think of Kodak?
26| P a g e
Appendix C: Quantitative Survey Questionnaire
The quantitative questionnaire was administered through a website on a special domain-name: DigitalPictureSurvey.com. Participants were asked to visit this website and fill out the questions, as seen below:
27| P a g e
28| P a g e
29| P a g e
30| P a g e
31| P a g e
32| P a g e
Thank you for your time. We sincerely appreciate your time and responses.
-Will Shutter
33| P a g e
Appendix D: Extended Research Methodology
Depth Interviews In order to begin to gather data relative to areas of further exploration, depth interviews were conducted with members of Kodak Gallery’s current target market. In addition, having found secondary data supporting the youth segment as a potential target market, the research team also interviewed members of this segment. In total, sixteen depth interviews were conducted with an equal representation of each segment. Focus Groups After conducting depth interviews, the research team believed it would be valuable to collect additional information through a focus group of each target market. In homogenous focus groups, the collaborative atmosphere is conducive to generating deeper insight that may not have been revealed in depth interviews. Thus, the team were able to gather eight participants for a focus group of Momfluencials and twelve for a separate focus group of the youth segment.
Survey Having developed further insights from the focus groups, the team began to form hypotheses regarding the next generation of Kodak Gallery; however, in order to objectively analyze the strategic opportunities presented through prior research, the team went on to design a survey. In the creation of a sampling frame, the team was limited by resources which would have allowed for the purchase of a comprehensive population list. Thus, the team utilized convenience sampling, a form of non-probability sampling, to create a sampling frame consisting of personal contacts, university e-mail lists and social networks. The survey was then web-delivered to over 2,400 people from which it received 338 responses at the time of data collection. The web delivery method allowed a sampling from different regions throughout the country, providing more confidence in the ability to extrapolate the results to the general population. In fact, twenty-one states were represented in the sample and 40% of survey participants lived outside of the team’s home state. Comparing the mean between out-of-state and in-state responses later confirmed that there was no systematic difference in the responses.
Appendix E: Features Most Frequently Desired
The following tables show the features that survey respondents indicated that they would most likely want offered from a digital picture services website. The users were presented with a force-rank question where they selected and ranked 5 features from the available 11.
This table is sorted based on overall selection counts (first data column), regardless of how the user ranked the item. The second data column displays the features that survey respondents indicated were there most wanted feature. They selected it as their first choice amongst their 5 selections.
Proposed Feature Selected in Top 5 Selected as 1st rank Free Unlimited Storage 80.1% 21.4%
Photo Manipulation Capabilities 74.1% 30.5%
Sharing Photos With Family and Friends 63.9% 19.5%
Learn How to Better Edit Photo's 53.0% 6.0%
Purchasing Prints 49.6% 5.3%
34| P a g e
Online Scrapbooking 41.0% 7.1%
Notification of New Content from Friends or Family 38.7% 1.1%
Socializing/Talking with Friends 35.0% 5.3%
Purchasing Specialty Items (eg. Mugs or Shirts) 20.3% 1.9%
Framing Photos 16.9% 0.8%
Sell Your Photos for Advertising Purposes 16.2% 0.8%
Appendix F: Website Recommendations Old Versus New Comparisons
Kodak Gallery Limited picture editing platform does not support video editing.
Users easily mix together pictures and video clips so they can relive their moments by sharing stunning compilations
Kodak Gallery Users can access a limited amount of features; all extended functionality is produced by Kodak; 3rd party developers cannot interface with the site;
Users browse library of free and paid plug-ins that will bring their content to life in useful, fun, creative, and time-saving ways
Kodak Gallery When logging in all users see the same page; cluttered with many different products/promotions, many irrelevant to each user
Personalized website experiences for every user increases customer retention and maximizes profits for Kodak
Kodak Gallery Pictures deleted after 12 months without purchase; video files deleted after 30 days
Free, unlimited, life-long, secure storage of pictures and 5 hours of free video storage. Secure memories that never have to be deleted.
Appendix G: Extended Information of Website Recommendation: KodApps Implementation By re-working the existing Kodak Picture Enhancements editor to be scalable and by developing a web-based video-editing framework which allows users to store and edit video, Kodak can keep up with industry trends and consumer needs. The foundation of this framework is to develop it with support for an Application Programming Interface (API). This API would allow third parties to create modular “plug-ins” (aka KodApps) for Kodak Gallery users to use. These KodApps interface with the users stored pictures and videos in fun, useful, creative, entertaining, and time-saving ways. While 3rd parties can
35| P a g e
develop KodApps, Kodak developers also will create KodApps. Initially, current editing features such as “Remove Red-Eye” and “Add Text”, etc will be converted to KodApps, and offered for free. More advanced KodApps may require one-time or recurring usage-fees, depending on the KodApp and the developer’s discretion. When designing the KodApp API system, it is recommended that it be based in Java so that it interfaces with Android (the new Google open-source cell phone operating system). This allows KodApps to be loaded on users phones that use the Android operating system. By utilizing Kodak’s existing Image Pac compression instead of JPEG or MPEG use for image and video compression, Kodak mobile users can edit their high-resolution images and videos right on their phone in a compressed yet near-lossless environment. By working with Android coders to implement Image Pac compression as a standard on Android, Kodak can position itself to have a strong foothold in the mobile content-editing field. Value for Primary Market: Momfluencials: Mothers can take advantage of KodApps to add time-saving value for organizing pictures, easily editing content, and other uses. One proposed example of a KodApp tailored for Momfluencials is “Automatic Facial Organizing” which is a new way to organize and sort pictures and videos based on who is in them. Modeled after government security/authentication conceptions, the KodApp would allow a user to identify the members of the family by clicking their face on a series of a few photos, and entering their name. After this is done, the user can upload an unlimited amount of pictures and the pre-identified people in the album can be automatically recognized. The Kodak Gallery user can then sort through the pictures based on who is in them. For instance, the user could sort by photos containing her husband and her daughter: “Show pictures of husband Jim AND daughter Amy” or “Show video clips of Amy WITHOUT Jim”. Since the current Momfluencial market is time-sensitive and requires speed and convenience, the offering of this KodApp functionality would be valuable. Competitors offering similar applications are Fujifilm, which utilizes face recognition through its Image Intelligence system, and Riya, a recently established company with “contextual recognition” which allows other characteristics other than the face to be registered, such as clothing or buildings. However, with the exception of Fujifilm, all other face recognition software searches through personal hard drives rather than online galleries for matching pictures. By implementing this “Automatic Facial Organizing” KodApp into Kodak’s offerings, they can provide expanded and innovative tools to directly address this target market’s needs of being time-pressed and wanting a better way to organize content. By providing such time-saving value, Kodak can charge a monthly fee for the use of this KodApp and begin receiving recurring, passive revenue. Value For Secondary Market: Youthfluencials Youthfluencials share their pictures and videos on social-networking and blog websites and like sharing their content in fun ways on these sites. However, there currently is a lack of easy and fun ways to do this. A recent successful promotion that Kodak ran was the Make Me Super campaign, which took a picture from a Kodak Gallery users library, and turned the person into a fictional superhero and made a video of the person doing silly things. Under the new Kodak framework, this Make Me Super integration would simply be the Make Me Super KodApp. By creating more campaigns like this one, and by allowing 3rd parties to create similar fun integration sequences, this highly-connected youthfluencial market will use these items to share their experiences and pictures in new ways using the existing social networking and blogging websites they are already using. Value for Kodak The API framework which allows for the creation of KodApps turns Kodak into the “iTunes of digital imaging”. This provides a viable way to sell items and digital services to provide a valuable revenue
36| P a g e
stream other than just printing of pictures on paper and premium products. The ability for 3rd parties to develop applications allows for communal creativity, where the Kodak Gallery community can start shaping the specific features the Gallery offers. Through an open platform, developers have access to interface with users’ pictures and videos in creative and useful ways. By allowing the developer to have access to interface directly with existing Kodak Product Printing, a developer can offer functionality which has the ability to place Kodak Prints and Premium Printed Items directly in the users Kodak Gallery shopping cart to be purchased and shipped. For instance, Martha Stewart Living (a 3rd party developer) may create a “Martha’s Easy Cook Book Maker KodApp”. Directly on the Kodak Gallery website, the user could design a cook book of her own recipes mixed in with recipes from Martha Stewart’s online recipe collection. After the user picks Martha’s recipes, she can input pages of her own recipes and add her own pictures of her own recipes. The KodApp interfaces directly in with Kodak Gallery, so that once created, the users customized “Cook Book” can be purchased from Kodak Gallery like they purchase other Kodak Gallery items. On the backend, the “Martha’s Easy Cook Book Maker KodApp” just simply helped the user design a highly-customized Kodak photo book product. In the case of this KodApp, Martha Stewart could design the profit-sharing to be based on a cut of all photobooks sold using the KodApp. Appendix H: Extended Information of Website Recommendation: Kodak LockBox Implementation By offering highly-secure, multiple-redundant-backup storage, Kodak can provide reassurance that users’ pictures are safe and will always be available. Kodak LockBox is a free service which reaffirms to the user that their pictures will always be safe, never deleted, and will be available for ever. Through the use of Amazon’s Simple Storage Service called S3, high-resolution versions of users pictures could be stored on this server, while Kodak Gallery would then serve thumbnail duplicate low-res ones as workable on the site. Since S3 charges for bandwidth in and out, the files would remain untouched until a user places an order. Then the S3 service would be tied into the production software when the item was ready to be printed. Value for Primary Market: Momfluencials Through primary research of depth-interviews of mothers with children under six years old, it was learned that mothers highly safeguard their pictures because they represent memories. They also expressed concern for the declining quality of printed copies over time. By providing mothers the ability to capture all of their memories in a digital form, not only can they safeguard them for future generations, but they can compile all of their pictures online for easy organizing and sorting. For mothers with one-of-a-kind pictures such as baby’s first step, she can insure the guaranteed security of her photos forever. Value for Secondary Market: Youthfluencials The Youthfluencial market takes an increasingly large amount of pictures, and they currently experience difficulties storing and organizing this content. While many youth have hundreds of pictures currently online on social networking websites like Facebook or MySpace; uploading pictures to these sites means that they are available to anyone who accesses the page. By allowing these youthfluencials to store all of their pictures on Kodak Gallery and give them to choice of which to show publicly on social networking sites like Facebook, they can keep all of their pictures together and organized without having to maintain separate albums on separate websites.
37| P a g e
Value for Kodak By positioning Kodak Gallery as the place for life-long picture and video storage, users make Kodak Gallery an irreplaceable part of their everyday life. Since they already have all of their pictures uploaded, tagged, and organized, when they are ready to buy prints they will simply order them from Kodak Gallery. Appendix I: Extended Information of Website Recommendation: myKodak Implementation Kodak Gallery can keep the sign-up page simple, but when the user first logs in, present them with a friendly and short ‘wizard’ which helps Kodak understand who they are when combined with site-usage trends, Kodak Gallery Live can tailor the services they see to be the ones they statistically will most likely use. For instance, a mother with a new born baby and an EasyShare camera will use different Kodak Gallery Live features than a college student with an iPhone. The site enhancement deals with reducing clutter and providing services that the specific person is most likely to use and products that are likely to buy. Current Customer Relationship Management systems offered by SAP, SalesForce.com, and Microsoft Dynamics offer Analytical CRM which help tailor company services (especially on-demand web-services) directly to the customers most likely to purchase them. Value for Primary Market: Momfluencials Since Momfluencials are time pressed, they don’t have the time to sift through all of the features that Kodak Gallery offers. By offering just the tools and services the user is most likely to use, she saves valuable time. Further targeting can be done, to tailor content-partnerships as well. For instance, a young mother with a child under 6 years old, might see a promotion for a photobook template by Eric Carle, while the mother with a child over 18 years old might see a promotion for a photobook template by Martha Stewart. The targeting will be metrics-based and analytical, providing true, measurable results. Value for Secondary Market: Youthfluencials The youthfluencials are more interested with sharing pictures and video content on 3rd party social networking communities, and having access to simple-to-use yet advanced picture and video editing tools. This targeting can provide these tools directly to this market. Value for Kodak: The benefits for Kodak to implement analytical CRM is primarily two-fold. Firstly, to increase website usability and to continue to provide an easy way for users to use the available services. Secondly, the analytical CRM can be used to increase the bottom line by promoting the most profitable products and services directly to the users most likely to use them.
38| P a g e
Appendix J: Partially-supported Website Recommendations
Kodak Gallery Users must edit pictures themselves using own editing software or by downloading EasyShare software and learning how to use it
Users hire creative design experts to help time-pressed users professionally develop their content, from picture slideshows to Christmas cards and beyond.
Launch Kodak ExpertTouch – Creative Professionals for Hire Description Creative expert designers are only a click away with Kodak ExpertTouch. By providing users with an easy way to find and hire graphic designers and video editors, they can have a real person make expert touches to pictures, design products, and create video clip compilations. Momfluencials in particular can benefit from this new time-saving service, for instance, by having this year’s Christmas card designed by a certified Kodak-expert. Description of Fee Structure The fee structure for this service would vary on a per-project basis. For example, organizing and designing a picture book may cost $50 while holiday cards would only cost $15. Supporting Data Nearly 80% of respondents surveyed said that they wanted “photo manipulation capabilities” as the top feature they want from an online gallery. However, only 49% identified “learn how to better edit photos” as their first choice. This indicates that nearly 25% of users want these editing capabilities, but don’t want to personally learn how to achieve them. As the case stated, and the team’s qualitative research confirmed: Momfluencials are time-pressed and are looking for ways to save time.
Kodak Gallery
Kodak Marketplace allows users to showcase images and allow viewers to order the images on items, limited and lacks scalable revenue model
Repositioned ‘Marketplace’ increases promotional tools for users, and provides a new, profitable revenue model for Kodak.
39| P a g e
Reposition Kodak Marketplace as “ShareStore”– Users Easily Sell Customized Products Online Description Users of Premier accounts currently have the ability to share their product creations and allow their friends and family to purchase them. In its new position, the Kodak Marketplace is open to all Kodak Gallery Live users, and it has a special pricing method allowing the user to set their own prices (as long as they are equal to or over Kodak’s base prices). Since the user can set their own price above Kodak’s base price, when an item sells they can earn real cash or Kodak Gallery Live store credits. Users would also be able to distribute a special “Promo Code” to hand out to close family and friends which would charge the buyer only the base prices for items in the store. Allowing users to make a cut of the sale positions the user as free marketers for Kodak Gallery Live: the user promotes his store to others and this drives additional traffic to the Kodak Gallery Live website. Invited guests to the user’s ShareStore can optionally ‘subscribe’ to their store for notifications of when new products are added. These notifications would also be linked in with the current RSS (Really Simple Syndication) feed system, for real-time updating of store contents. Description of Fee Structure The Kodak Marketplace would generate increased revenue for Kodak Gallery Live by allowing the users to become indirect marketers for their Marketplace store. By providing our influential target markets with tools to help them market their store better, Kodak can realize a faster-growing referral rate. Supporting Data Nearly half of the people surveyed want the ability to share pictures with friends and family, and 30% of people chose it as their top choice. At the same time, 64% want notifications from their friends and family when new content is available. The Kodak Marketplace not only shares and notifies friends and family of new content, it allows them to purchase prints of the new content for themselves. Allowing this service to be available to all users (not just paid ones) opens Kodak Gallery to a wave of free marketing. Every store owner will spread the word so that they can sell more items, with every item sold resulting in a new customer for Kodak Gallery. This model has been used extensively with Zazzle, a company that prints onto premium products like t-shirts and Frisbees. They rely on users to spread the word, and this guerilla marketing technique launched Zazzle into the spotlight in the industry.
VIII. Citations 1 PMA. The Worldwide Community of Imaging Associations. Photo Marketing Association. 1 Jan. 2009 <http://www.pmai.org/>. 2 Kodak Gallery: The Next Generation. Case Materials 2008-09. American Marketing Association. 3 Murr, Andrew. “It’s Picture Perfect?” Newsweek. New York: Jun 2, 2008. Vol. 151, Iss. 22. 4 Shutterfly. Tell Your Story. Shutterfly. 1 Jan. 2009 <http://www.shutterfly.com/>. 5 Prints Overview. Kodak Gallery. <http://www.kodakgallery.com/PrintsOverview.jsp?>. 6 Murr, Andrew. “It’s Picture Perfect?” Newsweek. New York: Jun 2, 2008. Vol. 151, Iss. 22. 7 “Prints.” Product Pricing. Snapfish. <http://www.snapfish.com/helppricing>. 8 "Walgreens Selects HP's Snapfish to Host Photo Website ." Press Room. 11 12 2005 . Snapfish. <http://www.snapfish.com/release7112005>. 9 Kodak Gallery: The Next Generation. Case Materials 2008-09. American Marketing Association. 10 Kodak Gallery: The Next Generation. Case Materials 2008-09. American Marketing Association. 11 Murr, Andrew. “It’s Picture Perfect?” Newsweek. New York: Jun 2, 2008. Vol. 151, Iss. 22. 12 Kodak Gallery: The Next Generation. Case Materials 2008-09. American Marketing Association. 13 Business Solutions; Running Out of Room: As companies are forced to store more data, they're getting squeezed by both space and cost constraints. Christopher Lawton. Wall Street Journal. New York, N.Y.: Sep 29, 2008. pg. R.9.
40| P a g e
14 “Age Distribution - Statistics." Pipl - People Search. 2008. Pipl. 8 Nov. 2008 <http://pipl.com/statistics/social-networks/age/?l=&s=3&g=>. 15 Murr, Andrew. “It’s Picture Perfect?” Newsweek. New York: Jun 2, 2008. Vol. 151, Iss. 22. 16 Kodak Gallery: The Next Generation. Case Materials 2008-09. American Marketing Association. 17 The NPD Group: “iPhone 3G Leads U.S. Consumer Mobile Phone Purchases in the Third Quarter of 2008”. Nov 10 2008. http://www.npd.com/press/releases/press_081110.html 18 “Motorola ZN5 Press Kit”. Motorola Corporate Website. <http://www.motorola.com/content.jsp?globalObjectId=8865-11220>. 19 The NPD Group: “iPhone 3G Leads U.S. Consumer Mobile Phone Purchases in the Third Quarter of 2008”. Nov 10 2008. <http://www.npd.com/press/releases/press_081110.html>. 20 "ComScore, Inc. - comScore Reports that the U.S. Catches Up With Western Europe in Adoption of 3G Mobile Devices." ComScore.com. 4 Sept. 2008. ComScore.Inc. 30 Oct. 2008 <http://ir.comscore.com/releasedetail.cfm?ReleaseID=332170>. 21 "Statistics." Press Room. Facebook. <http://www.facebook.com/press/info.php?statistics>. 22 “Developer Connection”. iPhone Dev Center. 2008.< http://developer.apple.com/information/> 23 Markoff, John. “Apple’s Latest Opens a Developers’ Playground”. NY Times.7/10/08. < http://www.nytimes.com/2008/07/10/technology/personaltech/10apps.html> 24 Wu, Jen. "Teens' Mobile Activities." Amazon Web Services. 8/19/08. <s3.amazonaws.com/thearf-org-aux-assets/downloads/cnc/youth/2008-08-19_ARF_Youth_Wu.pdf>. 25 “Developer Connection”. iPhone Dev Center. 2008.< http://developer.apple.com/information/> 26 "Statistics." Press Room. Facebook. <http://www.facebook.com/press/info.php?statistics>. 27 “U.S. Internet Users Viewed 10 Billion Videos Online in Record-Breaking Month of December”. ComScore. 2/8/08. <http://www.comscore.com/press/release.asp?press=2051> 28 “Graphics Forums”. Photobucket.10/08.<http://forums.photobucket.com/> 29 Graham, Jefferson. "USATODAY.com - Photo marketers hope to inspire seller innovation." News, Travel, Weather, Entertainment, Sports, Technology, U.S. & World - USATODAY.com. 26 Feb. 2006. 10 Jan. 2009 <http://www.usatoday.com/tech/news/techinnovations/2006-02-26-photo-reporters-notebook_x.htm>. 30 "Kodakgallery.com - Terms of Service." KODAK Gallery: Print, Store & Share Digital Photos�Order KODAK Prints, Photo Books, Photo Cards & Gifts. 28 Mar. 2007. 10 Jan. 2009 <http://www.kodakgallery.com/TermsOfService.jsp>. 31 “Analytical CRM”. SAP White Papers. <http://www.sap.com/solutions/business-suite/crm/pdf/AnalyticalCRM_50046585.pdf> 32 Shutterfly. Tell Your Story. Shutterfly. 1 Jan. 2009 <http://www.shutterfly.com/>. 33 “The Power of Word of Mouth & the Role of Influencers in Igniting Conversations”. Keller Fay Group. 10/16/07 < http://docs.google.com/gview?attid=0.6&thid=11ec236e07f4475b&a=v&pli=1> 34 “Conversation Value™ Model”. ChatThreads. <https://www.chatthreads.com/corp/pdf/CV_Exec_Summary_Web.pdf> 35 “ComScore Releases Video Study”. ComScore. 10/07. <http://www.marketingcharts.com/interactive/comscore-debuts-worldwide-search-market-report-asian-engines-hot-1975/> 36 “Cost and Payment”. Google Adwords. 10/20/08. <adwords.google.com> 37 Kodak. 2008-2009. Kodak Gallery: The Next Generation. American Marketing Association. 1 Jan. 2009. 38 "Statistics." Press Room. Facebook. <http://www.facebook.com/press/info.php?statistics>. 39 Kodak Gallery: The Next Generation. Case Materials 2008-09. American Marketing Association. 40 Kodak Gallery: The Next Generation. Case Materials 2008-09. American Marketing Association. 41 “Conceptual Overview”. Customer Lifetime Value Tool. Harvard Business Online. 2007. <http://www.harvardbusinessonline.com/flatmm/flashtools/cltv/> 42 Markoff, John. “Apple’s Latest Opens a Developers’ Playground”. NY Times.7/10/08. <http://www.nytimes.com/2008/07/10/technology/personaltech/10apps.html> 43 Kodak Gallery: The Next Generation. Case Materials 2008-09. American Marketing Association.