“A dark tent, a nitrate bath, and a water container.! You did not bring just a camera to take a picture; you brought the whole lab. All this was to change, thanks to George Eastman. Eastman founded a company that has had major worldwide influence almost since its inception. To initiate and maintain an organization with such clout, Eastman required a variety of resources, including the intelligence to develop new processes, a good business sense, and a willingness to take risks. But it is unlikely that Eastman’s success could have been achieved without his strong brand: Kodak.” – Building strong brands – David A. Aaker
Facebook bought Instagram for $1 billion in 2012, a shocking sum at that time for a company with 13 employees. The same year Eastman Kodak – the most storied company in imaging went bankrupt. It is a chapter of business history that marketers need to go back to again and again.
Kodak was an institution. Anyone of my generation or before will instantly understand the meaning of the phrase “A Kodak Moment.” Kodak became an iconic brand. It was the source of a flood of innovations. It single handedly created a market and category. George Eastman had a simple vision: to make photography as simple as using a pencil.
In the late 1800’s photography, a newborn process and technology was complicated. The sheer logistics of capturing images was hassle prone and mechanical. Cameras were big, heavy and hard to use. Besides the bulky cameras and their set up, you had to move with a lab to develop the plates. In 1888, Eastman began marketing a camera that made photography accessible to all, not just to the committed artist. The camera sold for twenty-five dollars. The beginner had only to pull the cord, turn the key and press the button.
For ten dollars, the pictures would be developed and new film would be reloaded. One of Kodak’s first ads in 1888 served to position the firm for the next century. It showed a picture of a hand holding a camera, with a headline written by Eastman: “You press the button, we do the rest.” That is a compelling brand promise. It is evident of clarity and purpose. George Eastman made photography simple and portable. He democratised it, made it accessible, cheap and universal.
In 1892, he created the roll film and a camera capable of taking advantage of the roll. Kodak was a fountain of first ever innovations. The folding Kodak, introduced in 1890, was easier to carry. The Kodak Brownie, launched at the turn of the century, remained the company’s staple product for almost eighty years. The Instamatic, an easy-to-load camera with flash cubes was introduced in 1963. A disposable Kodak FunSaver arrived in 1988 wherein the entire unit camera and roll were to be handed to developing studios for processing the film and recycling the camera.
The brand was seen as iconic, but the brand’s purpose wasn’t seen as legitimately empowered to create shared value throughout the ecosystem of product developers, service providers, software developers, social media channels, and influential customers that comprised the new digital world. Consumers gravitated toward others who executed better than Kodak.
For over a century, Kodak remained synonymous with capturing life’s moments. Promotions, advertising and an omnipresent logo also did their part to build awareness for Kodak. As early as 1897, twenty-five thousand people participated in an amateur photographic competition which Kodak sponsored. In 1904, it brought to life a ‘Traveling Grand Kodak Exhibition’ of forty-one photographs.
As America built motorways, it erected “Picture Ahead!” road signs cementing its association with imaging. Its advertising was always about fun times, family and the product was presented bang centre. During the Kodak hour which was heard on radios in the 1930s, listeners heard family photo albums being described. Photo albums became the record of lives lived.
A 1967 award-winning Kodak commercial featured a couple in their sixties cleaning the attic. They chance upon a carton of old photos showing their entire life journey starting in their twenties and across the years that followed – getting married, enjoying their honeymoon, having their first child and attending the graduation of their son. The commercial ended with the woman, now a grandmother, grabbing an Instamatic to take a picture of her new-born grandchild.
Kodak made an early decision to go global. Only five years after the Kodak camera was introduced in the United States, a sales office was opened in London. In 1930, Kodak had 75 percent of the world market for photographic equipment and about 90 percent of the profit.
In 1996, Kodak was ranked as one of the four most valuable brands in the world behind Disney, Coca-Cola and McDonald’s. The brand’s themes resonated in every heart as ‘America’s storyteller’. On billions of occasions, it gave consumers ‘Kodak moments’ to cherish. In doing so, it entered the mainstream of social life and culture. Owning good times and fond memories was as powerful a platform as any brand could claim and own.
But, by the time it went bankrupt in 2012, Kodak had vapourised $30 billion in market value between a peak in 1999 and its eventual demise in 2012.
What happened ?
What lessons may we all learn ?
The shorthand answer given is that Kodak missed the digital photography epochal change and that its digital-age products were simply sub-par. Indeed there is a case to be made for poor strategic planning, lack of foresight and inept product development. But a deeper, brand inspired evaluation will shoehorn most, if not all of Kodak’s failings. This is in the face of this challenge to its brand being divorced from its essential strategy.
Kodak made an early decision to go global. Only five years after the Kodak camera was introduced in the United States, a sales office was opened in London. In 1930, Kodak had 75 percent of the world market for photographic equipment and about 90 percent of the profit.
Kodak was a great brand even on its deathbed, but it was dying because it ceased to do what great brands ought to. It began to take its appeal and clout as a given.
The fact is that Kodak’s management didn’t lack foresight. Way back in 1975, it had invented the world’s first digital camera. Through the 1980s, the management identified digital imaging at its number one strategic priority. Almost $5 billion was funnelled into digital image research. In house research teams filed almost a thousand digital imaging patents. This hardly suggests a lack of awareness or foresight.
Why then did it miss the next era having dominated the one before?
From a ‘brand-as-business’ standpoint, Kodak failed to continue to pivot its brand away from short-term business priorities and its brand ethos neglected the ‘in laboratory’ opportunities of the new digital age. The brand was reflecting the company’s “core business” in a myopic way. If only they had reaffirmed the brand’s essential reason to be, they would have made the switch without ‘Ifs and Buts’ and at all costs. No cost is higher than to end up as a bankrupt business.
As the panic set in, Kodak started market activities indiscriminately and pitched new products instead of thinking of new ways. It lapsed into imitator introductions that drew sustenance from the brand but never gave back to it. An example is the Kodak Easyshare camera which was launched when Canon and others had already taken away the early mover advantage. Kodak lost the ability to direct consumer behaviour and create a market. Instead, it allowed fickle and trend riding consumer behaviours to direct its efforts.
Even when digital products were launched, it lurched from one mediocre product to an unrelated other such as photo printers with poor quality and slow output speed. The Kodak Instant Camera introduced in 1976 to compete with Polaroid had captured one-third of the instant camera market after one year. However, the company was forced to discontinue the product after a successful patent encroachment suit by Polaroid.
When in doubt, brands should go back to what made them great in the first place. In Kodak’s case, it should have been market creation through game changing innovations. In its slog overs, it lost nerve and missed the opportunity to present a seamless end-to-end digital imaging experience.
The brand was seen as iconic, but the brand’s purpose wasn’t seen as legitimately empowered to create shared value throughout the ecosystem of product developers, service providers, software developers, social media channels, and influential customers that comprised the new digital world. Consumers gravitated toward others who executed better than Kodak.
This story -by varying degrees – applies to Blackberry, Xerox, Jet Airways, Axe, Nokia, Segway, GE, Blockbuster, JC Penny, Binaca and many other iconic brands whether global or Indian.
Kodak’s story is the greatest and most recent example of self-ruination through breaking away from your brand, ignoring your culture, following trends, neglecting the details that matter.
When the brand becomes a logo and not a living spirit, things that matter start to slip away. Soon hungry competitors copy designs, features, and technology and undercut on price. By the time it is understood that brand strength cannot be taken for granted, business pressures make it difficult to think differently and make changes. When times get difficult, people double down on ingrained ways of doing things that have produced success in the past.
When Kodak’s profits peaked in 1999, it was well after the revolution in digital cameras had begun. Kodak executives at the time continued to invest billions in research and product development, assuming those massive investments would pay off. They never reckoned that they were later than the last viable date.
Your brand may be doing well, but is your company really thriving? A great brand never kills a business but a sick business kills a great brand.
In 1996, Kodak was ranked as one of the four most valuable brands in the world behind Disney, Coca-Cola and McDonald’s. The brand’s themes resonated in every heart as ‘America’s storyteller’.
Is your brand helping lay the foundation for tomorrow’s continued growth? And what about the day after tomorrow? What is the second horizon?
The brand and what it stands for is like a compass. It must point to the true north and determine the company’s direction. The test is what you do when the market changes without warning? What happens when a crisis emerges?
Anyone who believes that a great brand can be undone by mere changes in technology doesn’t fully understand what makes great brands great. Let us all learn from Kodak.
Shubhranshu Singh is vice president, marketing – domestic & IB, CVBU, Tata Motors. He writes Simply Speaking, a weekly column on Storyboard18. Views expressed are personal.