Quick, what are the biggest not-so-well-kept secrets about inkjet printers? C’mon, you know. Everyone knows!
Printers are economical. Ink is expensive.
On March 29, Kodak launched, “Print and Prosper,” a new integrated marketing campaign behind its newest All-in-One inkjet printers. The campaign stakes claim to a bold, value-oriented position that plays well in these economic times:
Switch to Kodak All-in-One inkjet printers and, “Stop overpaying for ink.”
Fully integrated campaign
Kodak reaches out to consumers on television, through a custom online application, social networking sites, bloggers and Twitter followers. In-store execution so far appears missing and, though a Kodak spokesperson declined to comment, it will be interesting to see if the campaign travels in-store.
This campaign is a bold departure from the warm-and-fuzzy Kodak Moments of the past.
TV advertising exclaims, "Drip by drip your wallet is being drained every time you hit "print" on your inkjet printer. Last year America paid the big printer companies $5 billion too much for ink. Feeling ripped off? Then stop overpaying for ink.... Switch to a Kodak printer that only uses fairly priced ink."
In print, Kodak suggests, “The world's most expensive liquid isn't found in the Middle East. It's found in your inkjet printer cartridges….Switch to Kodak and stop overpaying for ink.” Other ads lead with, “Last Year, America Paid $5 Billion Too Much for Inkjet Printer Ink.” And, “There is a $5 Billion Stain on the U.S. Economy and it’s Coming from Your Printer.”
Each of the executions directs consumers to an online application, “Find out how much you overpay for ink at Kodak printandprosper.com.”
Where does this disruptive new Kodak spirit come from?
A brand that needs to strategically reinvent itself
Kodak, a company still affectionately known for the warmth of its film-based legacy, needs to shake things up if it’s to succeed in a digital world.
“Resuscitating the Kodak brand won't be easy. In 2001, Kodak was ranked the 27th-most-valuable brand in the world, according to Omnicom’s Interbrand. Last year, it fell off Interbrand's closely followed list of the top 100 global brands.” according to a Wall Street Journal article by Suzanne Vranica March 30, 2009.
Worse, Kodak, once the world’s giant in film-based image making, is far behind the digital market share leaders. “HP (Hewlett-Packard) owns the printer ink and printer toner market. With greater than 45% market share, nearly every printer manufacturer is gunning for HP.” according to ConcordSupplies blog, March 13, 2008.
Disruption built on consumer insight
Printer ink is priced like razors and razor blades, where the handles are loss leaders and blades are the high-margin money makers. A Nov. 19, 2007 study, “Inkjet Prices, Printing Costs and Consumer Welfare” Larry F. Darby and Stephen B. Pociask, published by the non-profit American Consumer Institute Center for Citizen Research, states.
“Inkjet printers are priced with little or no margin and, according to some authorities, well below cost in many cases….In turn, inkjet printer ink cartridges are priced inordinately high in most cases, as a means to compensate for low or negative printer margins, consistent with the well-known razor/razor blade model, wherein the durable assets (razors or printers) are sold below cost and “consumables” (blades or ink) are marked up substantially.”
Kodak Public Relations Manager, Jacqueline Mangione states that, “According to Kodak’s research, the top consumer dissatisfier when it comes to printing has been the high cost of ink.”
Saving money on operating costs—namely high margin ink cartridges—plays off consumer insight that’s been as obvious as it’s been avoided, like a sacred cash cow, by the industry. That’s part of the wisdom behind Kodak’s boldness. Because everyone knows the “secret,” it instantly connects with the target, heavy printers.
The campaign addresses a real consumer issue—and aims to put Kodak All-in-Ones into consumers’ considered set where it lags behind competitors from Brother, Canon, Epson, HP and Lexmark.
Driven from the top
If you want to know a company’s strategic direction, look to see what the boss is saying.
Kodak Chairman and CEO, Antonio M. Perez, who joined the company 2003, is “leading the worldwide transformation of Kodak from a business based on film to one based primarily on digital technologies,” according to his Kodak bio. “In the past four years, Kodak introduced an array of disruptive new digital technologies [author’s emphasis].”
In a Bloomberg Press interview with Meg Tirrell, Perez, who spent 25 years at Hewlett-Packard helping develop its printers, “pegged the devices as one of Kodak’s three ‘core investments.’” They’re that important.
In that same Bloomberg Press reference, Jeffrey Hayzlett, Kodak Chief Marketing Officer and Vice President, connects the campaign with the company’s founder. “George Eastman wanted to make photography affordable for everyone….Now we’re trying to make printing affordable for everyone.”
“Paying too much for printer ink is a financial black hole that consumers can easily avoid.” adds Hayzlett in a March 30 Kodak press release.
Heavily supported by social media
Kodak incorporated social media as an integral part of its campaign, holding a live and virtual blogger event in New York city, March 29.
According to Kodak Chief Blogger, Jenny Cisney, “Using social media is about going where the people are, not making them come to you. If they are on blogs, Twitter or Facebook, then that is where we need to be. It’s all about being helpful, finding out what people need and providing value.”
The event, centered around household money saving tips from noted personal finance journalist and author of “Money & Happiness,” Laura Rowley. According to Cisney, Kodak, “directly reached the more than 20 participants, and 30 additional people via Twitter during the event.” Participants also learned from Rowley about how Kodak All-in-One printers can help consumers save on ink costs.
At the time this posting is being written, Social Mention counts nearly 60 blog mentions. And Twitter Search racks up 557 mentions over the days since the campaign broke. The Kodak “Dripping” commercial has been viewed over 500 times on YouTube. Strong social performance.
Certainly strong enough to put Kodak Print and Prosper on the radar screen of inkjet market leader HP.
Angela LoSasso, U.S. Social Media Manager, HP’s Imaging and Printing Group (http://twitter.com/AngelaAtHP) has been listening and writing for HP since Dec. 2006. She personally contacted this author (who tweets at http://twitter.com/BrandMarketer) and, “a few people who had expressed interest in learning more about Kodak’s cost of ink claims. Because we saw similar claims back in 2007 and because those claims were reviewed by independent, qualified and credible sources, I felt that information was contextual and valuable to bloggers, media and shoppers alike.”
LoSasso’s reactions are captured on the HP Communities Inkjet Printing Blog.
Will boldness deliver results
“This is a big, bold idea that doesn’t tiptoe around the issue and lets consumers know Kodak is on their side,” said Linda Sawyer, Chief Executive Officer, Deutsch Inc. “Kodak has a longstanding, deep and emotional relationship with consumers and, by exposing this issue, that relationship will only become stronger.” tells a Kodak press release.
Boldness has a dark side, and can sometimes create a backlash. It also has a time limit.
Print and Prosper will have to show results if it’s to portend a brighter future for Kodak. One thing is certain. Transforming a company with a film-based legacy into a digital realty does not call for baby steps. As a result, it appears strategically essential for Kodak to be bold.
AdWeek awarded the television commercial a creative Ad-of-the-Day mention. But not everyone at AdWeek agrees about the campaign. In “Kodak Goes Negative,” columnist, Barbara Lippert asks, “How can [Kodak] just drop all that equity by selling ink at half price?" Of course, once you’ve fallen off Interbrand’s Top 100 brand’s list, you have to wonder just how much equity is there—and start selling printers.
Ultimately, the number one success metric is sales
Hayzlett demonstrates Kodak’s sales-driven focus as he steps away from the warm-and-fuzzy approach that once typified the company. "We have to have ads that drive sales," he says in a March 30 WSJ article.
Kodak has to create a new brand. Holding tight to the past will not turn Kodak digital. I also believe over time, should Kodak succeed with its daring digital rebranding, it will be able to reconnect with its warm heart. Then, lookout. What do you think?
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Blog content: ©2009 Paul J. Hydzik. ALL RIGHTS RESERVED.
__________________Paul Hydzik grows brand value. As a brand marketer and award-winning creative leader, Paul has more than 15 years of experience driving business success from start-ups to blue chips. His strategic resume covers all aspects of B2B and B2C branding from go-to-market to consumer insight to identity development and all forms of marketing communication.