The ‘Kodak moment’ was an iconic message backed by a formidable company that dominated the film industry throughout the 19th and 20th century. Capturing 90% of the US film market, Kodak was one of the most valuable brands globally. However, despite being embedded into the social fabric of America and much of the developed world, Kodak is now remembered as perhaps the most tragic example of a missed business opportunity and the fatal flaw of misunderstanding the essence of marketing.
What caused the epic downfall and 2012 bankruptcy of one of the world’s most profitable companies? Fundamentally,
Kodak failed to ask the right marketing question: What business are we in? Like most companies that fail to evolve over time, Kodak became fixated on selling product, instead of focusing on the business that generated consumer interest: storytelling. This prioritization of profit was the driver of Kodak’s insular business approach to digital photography, a missed opportunity that set it on the path for disaster. Despite the popular misconception, Kodak wasn’t slow to digital technology, it had in fact invented the digital camera in 1975. Rather it failed to appreciate the threat digital posed, and held off on marketing its digital products in an attempt to protect its lucrative film business.
This resistance to evolving consumer desires and short sightedness for competitive edge in an attempt to protect the profit margin generated from Kodak’s film products caused Kodak to become unsuited for a new marketplace and new consumer attitudes.
Kodak’s fear of its own digital and film products competing with each other prevented its adaptability and ultimately affected its product allure in the long run. If Kodak had appreciated it was in the
storytelling business it would perhaps have recognized that technology and product would need to adapt to the requirements of the market to continue to deliver on that desire, even if that means competing with themselves. The lesson here is that
marketing is not the art of
selling products, but rather effective
marketing satisfies its company’s customer base and keeps the company relevant to their customers’ evolving needs. All companies, even those who dominate a popular memory in the market need to be poised to evolve and react to changing desires in order to continue to generate revenue and remain relevant.
How do you ensure your business is asking the right questions?
1. Ensure your interests for the company respond to market interests and are open to change If the decision-making process becomes isolated from consumer needs or becomes resistant to evolution your business risks losing relevance for consumers.
2. Operate and analyze your business holistically Although separating functions may seem useful for optimization it often slows effectiveness of the whole. Ensure you take into account all research, development and performance with respect to each aspect of your company and use that information to work towards a unified goal.
3. Keep the business structure adaptable to changing market conditions Whether your business is positioned to
make-and-sell, sense-and-respond or anticipate-and-lead, you must be willing to adapt your business approach to developments and preferences in the market. While
make-and-sell may be efficient and profitable in a predictable market, innovation may require you to transition to an anticipate-and-lead scenario to maintain leadership in the market.
4. Do not make decisions in a vacuum Interactive decision making is the most effective way to ensure you are correctly perceiving market demands and responding appropriately. Business problems can be complex but incorporating a range of interactive decision support strategies like market research, direct consumer feedback or market statistics are integral in ensuring the decisions you make are evolving your business effectively.
