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Industry Insight

Kodak Brings Back the One Button Tactic: Insights from the GUA Conference

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By Noel Ward
Published: May 21, 2009

"This is not your father's Kodak," confirmed Jeff Hayzlett in his keynote presentation at GUA, Kodak's Graphic Users Association conference in Orlando earlier this week. And indeed it is not. Kodak has been making the unusual transition from a largely consumer-driven past as purveyor of affordable cameras and top-quality films to becoming an increasingly business-to-business company in which consumers play a smaller but still vital role.

"It's a challenging and difficult transition," admitted the CMO and frontman for Kodak. "And while it's taking longer than many would like, it's proceeding well." The company is simultaneously reaching out to consumers with a variety of easy-to-use digital cameras and associated Kodak-branded products such as memory cards and digital photo frames, while sustaining its long-term presence in the commercial graphic arts space with an array of equipment and software.

Hayzlett went on to quote company founder George Eastman: 'Press one button, we do the rest.' "We're trying to bring that original philosophy back into what we do," said Hayzlett.

At GUA it was apparent, from both presentations and conversations with GUA members that Kodak is working to make even its most sophisticated software as easy to use as possible. While the people running the prepress systems and digital print engines still need skills, knowledge and training, the impetus to simplify the steps and processes of print production echoes the original philosophy.

Software and sharing
It was in fact software that brought people to the GUA conference. Nearly 300 graphic arts pros, ranging from business owners to pre-press managers and digital press operators attended sessions on color management, workflow, packaging, proofing, variable content, direct marketing, and more. Kodak print engines, plates and CTP also shared space at GUA, with sessions on flexography, the NexPress and a look at what Kodak's Stream Concept Press will offer print providers.

Beneath it all was the networking and problem-solving that attendees claim is the most valuable aspect of GUA membership. While the economy kept most of GUA's 5,300 members away, those who weren't in Orlando still have access to the collective knowledge of attendees and the overall organization. Numerous member forums are accessible over the internet where knowledge is shared on a daily basis. "I've posted questions about various problems and have had answers back in 20 minutes," one member told me. "The GUA is a resource we use throughout our shop."

Such sharing reflects the tone of other user-oriented conferences I've attended over the past couple of years. GUA was neutral ground, where rivals and competitors could sit around a table or in a classroom and share the challenges they faced and discuss ways of wrestling their dragons. The emphasis is on learning how to work smarter, faster and more efficiently while delivering quality print for the end customers of every job.

The sharing also flows upstream to Kodak. GUA's focus on software focused has made it a forum through which Kodak learns how products such as Prinergy, InSite, and ColorFlow can be crafted and tweaked to better meet customers' needs. Many new features come directly out of conversations that began at a GUA conference or had their roots in a problem highlighted in an online forum. "The interaction we get through GUA has been invaluable in helping define and refine many of our software products," notes Dave Wigfield, Worldwide Director for Workflow Business Solutions.

Going after BIG INK
Back on the consumer side, Kodak is engaging an aggressive advertising and marketing campaign surrounding the cost of ink for inkjet printers. The enemy is Big Ink, the firms that make inexpensive desktop inkjet printers but charge $75 or more to replace a full set of inkjet cartridges. "The way Big Ink prices its inks make them the most costly liquids on the face of the earth," announced Hayzlett. "Think back to last summer when gas cost $4 a gallon. We all thought that was a lot of money. But if you paid as much for gasoline as you do for printer ink it would cost $400,000 to fill your gas tank."

He went on to show some new TV ads intended to educate consumers on just how much they are being overcharged for ink, and that Kodak offers a clear-cut alternative. Instead of offering up inexpensive or even free printers, then charging high prices for miniscule quantities of ink, Kodak charges a moderate price for its machines and makes the consumable inexpensive.

This is a very interesting and strategic move. Consumer research on branding has indicated that one of the attributes closely associated with Kodak is 'trust,' so Kodak is betting that the halo effect of this trust will extend to inkjet prints of people's photos just as it did when pictures were taken on Instamatics and printed on Kodak paper by local photo mini-labs. Will it work? It could, and probably even should. Still, competitors' reaction to date seems limited to pointing out the reliability and productivity of branded inks compared to those of the third-party inks sold at cut-rate prices. Based on my experience, this is an excellent point which shows there can be value behind the higher prices. Kodak, though, is attacking its competition at the core of their business model --shouting "your product is too expensive!"-- and that has to be causing some heartburn among product managers, CMOs and other execs at the "Big Ink" companies.

As he closed, Hayzlett pointed out a part of Kodak's mission which he termed M3 I-squared: Make, Manage and Move Images and Information. "Only Kodak does that in your personal life, when you're capturing images and sharing and printing photos. And with documents themselves, moving and managing information, whether it's through prepress to an offset press or to a digital production press."

From Hayzlett's presentation and throughout the demo area and the conference sessions, the message at GUA was that Kodak, the brand, the indelible logo, and the technology for print production is moving forward and looking to become the once and future Kodak.

 

Discussion

By Michael J on May 22, 2009

Noel,
It sounds great, but will Kodak have enough time to execute. Since February 17 the stock has lost 31% of their value while Oce's stock has increased over 120%, Ricoh up over 19% and even Xerox showing a gain. Kodak's market cap as of today is less than a billion dollars which puts them in the small cap category.

My sense is that it's a focus problem. Consumer facing and production facing business have different ways of doing business and very different cultures. While the syngergies are there, I question whether the present organization of company focus is best to leverage their awesome brand + Kodak Photo Gallery, and the overwhelming presence in offset production workflow.

Will they really be able to make headway against HP in toner? Maybe. But I think they are ignoring their core strengths as they go through the very difficult problems of going from film based image capture to digital image capture.

 

By John on May 22, 2009

Kodak claims saving some 50% in ink costs, however according to Popular Photography's tests they do so by comparing "apples to oranges." Here's the URL with the test results: http://www.popphoto.com/Reviews/Accessories/All-in-One-Printer-Shootout "According to Executive Technology Editor Michael J. McNamara, the Kodak EasyShare 5300 All-In-One printer ($199, street) turned out only 165 borderless color photos from an $18 package of paper and ink that is billed as producing 180 photos. "That's about 11.5 cents per print," said McNamara. "But more importantly, the quality of the prints was so low in color saturation that they could be deemed no better than 'draft' quality by professional or lab-print standards." "And while Kodak can actually claim dramatic saving in ink costs over the competition -- it does so by comparing apples and oranges -- or more accurately, draft quality prints to "lab quality" prints from other manufacturers."

 

By DJ Dunkerley on May 26, 2009

Like what Michael J. said.

I don't know, what new products has Kodak released in the last 4 years that are generating revenue?

The put and call options don't paint a rosy picture for Kodak either. You buy Kodak share todays, and sell your January 2011 puts and options and get 80% of your money back. That says the market is seeing bankruptcy within two years (or less).

 

By Michael J on May 26, 2009

Back to DJ,

I think they are smart enough to avoid bankruptcy. my bet is that someone will take the print piece - Creo is a jewel. Then someone will take the photo piece - Kodak Gallery with 30,000,000 users. And someone will use the brand to something....

There is too much big money floating around picking through the wreckage to let this go into receivership, unless Money thinks it can get a better deal. But the Market Cap is already so low and the yen is so strong, why wait?

 

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