Of the photo industry heavyweights that pooled their technological strengths a decade ago to develop a new standardized photography system-Eastman Kodak Co., Fuji Photo Co., Minolta Corp., Canon Inc. and Nikon Corp.-only Kodak has used a multinational marketing strategy to launch its APS films and cameras.
Further, despite its promise to revolutionize photography, the system's introduction, which began mid-April and racked up $115 million in advertising worldwide during 1996, has been extraordinary mainly in its missteps. The launch has been marred by consumer confusion, ill-conceived product names and production shortfalls so severe that advertising was pulled for several months while retailers' shelves were stocked with supplies for the holiday shopping rush.
Some marketers blame Kodak's $80 million global ad campaign in 1996-the biggest in Kodak history, including some $22 million in Olympic Games advertising over 17 days-for hyping consumer expectations and leading to unexpectedly high demand. "I think Kodak overpromised the system," said Bill Giordano, marketing manager at Nikon's U.S. headquarters in Melville, N.Y.
But the good news for the industry partners is that even with the marketing snafus, sales are strong for the new digital photography system, which enhances picture-taking with features like simple loading, flexibility of print size, improved product quality and the ability to download images onto a computer screen. The small and lightweight APS cameras cost an average $125, or about 15% to 30% more than comparable 35mm models. APS film cartridges also run an extra 15% to 30% higher than a 35mm roll.
"We're confident the APS will eventually replace the compact [camera] market the way CDs replaced vinyl records," said Keith Bowyer, Eastman Kodak's European director of marketing for APS.
Last year, the Advanced Photo System helped the film and point-and-shoot markets to jump an estimated 10%. APS was projected in 1996 to capture 20% to 30% of the worldwide camera market and 2% of worldwide film sales, which the Photo Marketing Association estimates at an annual 50 million and 2.8 billion units, respectively. By the year 2000, the group predicts that half of the cameras sold will be APS models.
For the launch, APS marketers concentrated on the major photo centers of the world-Japan, the U.S. and Europe-which are roughly the same in market size, according to industry sources. This year, more APS markets will be opened gradually in the less developed photography centers of Latin America and Asia.
Any success the photo system logs seems even more impressive when weighed against the fact that its marketers didn't do a very good job of explaining even basics like how the system works. For instance, when Fuji unveiled APS cameras and film in Japan last April, ads emphasized Japanese innovation and Fuji leadership. It wasn't until September that ad agency Dentsu produced ads explaining the photo system. "The truth is that these should have been the first ads we released," said Fuji advertising manager Masahiko Kojima in Tokyo.
What has added to the confusion are a multitude of brand names for the same model in different markets. Only Kodak uses the same brand name, Advantix, for both cameras and film in each of its markets in the U.S., Europe and Japan.
In contrast, Japanese competitor Fuji, which splits the worldwide film market evenly with Kodak, launched its APS cameras under several brand names: Endeavor in the U.S., Fotonex in Europe and Epion in Japan. Further, Fuji APS film is labeled Nexia in Japan and Smart in the U.S.-an oversight considering that Fuji markets a 35mm camera called Smart, which isn't compatible with Smart film. "With everybody doing their own thing, it leads to confusion," admitted Fuji marketing manager Tony Sorice in Elmsford, N.Y.
Minolta, Canon and Nikon, which sell APS cameras but not film, added more murkiness to the muddle by opting for a multibranding strategy (see box) in their combined ad budgets.
Advertising strategies have been equally inconsistent among the players. Every manufacturer except for Kodak adopted a new campaign for each market. Fuji relied on four ad agencies to create campaigns for Japan, the U.S. and European countries.
Of the five APS marketers, Kodak and Fuji have the most vested interest in seeing the new system succeed because they produce both APS cameras and film. In the much larger film market, the two brands are evenly matched, each claiming an estimated 40% share of the $5 billion in film sales worldwide. Kodak's strength lies in the U.S., where it commands 60% to 70% of film sales compared with Fuji's 10% to 20%, according to Kodak. In Japan, the percentages for each brand are switched, according to industry sources.
"In Japan, Kodak is the challenger brand while Fuji is the generic brand, and the reverse is true in the U.S.," pointed out James Vincent, worldwide account director for the Advantix at J. Walter Thompson. The demarcations are not as clear in Europe, where Kodak film leads with a share of 40% to 50% compared with Fuji's 20% to 30%, according to Kodak and Fuji marketing sources.
Of the estimated ad spending of $115 million worldwide to launch the Advanced Photo System, Kodak and Fuji have spent more than two-thirds that amount. Moreover, each has directed at least half of their ad budgets to their single strongest market, dwarfing competitors' ad budgets.
Kodak, for example, spent $40 million on Advantix brand advertising in the U.S., or half its worldwide ad budget, according to William Smith, director of worldwide marketing for the Advanced Photo System at Kodak in Rochester, N.Y. He estimated that Kodak would sell 4 million Advantix cameras at an average price of $125 in 1996 and projected that Advantix film would boost Kodak U.S. film sales by 10% in 1996.
Kodak used a consistent ad theme, "Take Pictures. Further," in each of its launch markets: the U.S., Canada, France, Germany, Italy and Japan. Commercials showed universal images of beauty such as scenes from Hawaii, the Canadian Rockies and European cathedrals. In each country, however, the spots were localized with segments featuring local personalities speaking in their native language about what they think is beautiful.
In Japan, Kodak substituted a pop star, Kyoko Koizumi, as a spokewoman. In the commercials, she raves about the product's benefits and takes pictures of the images she likes most. "In Japan, commercials are often associated with pop stars," said Mr. Vincent, explaining Kodak's celebrity endorsement approach.
For its Japanese effort, competitor Fuji invested $15 million in advertising its APS film and cameras-or about half its worldwide spending for the new photo system, according to the company. Fuji's ad budget for Japan accounted for 75% of the total Japanese spending of $20 million.
By mid-December, Fuji had sold 30 million cartridges of Nexia film while its APS cameras accounted for 30% of its camera sales, according to Fuji.
The company also acknowledged criticism of its early ads by following up with ones that show a young clerk explaining the new system to a popular comedian and demonstrating the failproof loading method and other features. Fuji's Mr. Kojima acknowledges that the informative ads from Dentsu are not as amusing as earlier spots that showed a man making funny faces while being pressed up against a train window, but notes that the change was necessary.
Meanwhile, for its European marketing strategy, Fuji opted for a country-by-country effort. A major pan-European approach would be inappropriate because European consumers are more reserved than the Japanese and Americans are about taking photos, explained Kazuo Minegishi, consumer products marketing manager at Fuji in Dusseldorf, Germany.
For the U.K., Germany and Spain, Fuji adapted TV spots created by Dentsu to feature soccer superstar Ryan Giggs in an estimated $10 million ad effort. While the European ads share a common catchphrase, "Simply more advanced," and "show what Fuji is capable of doing," to highlight the APS technology, efforts were customized for each country. For example, ad agency Simons, Palmer, Denton, Clemmow & Johnson created a supplemental print campaign in the U.K. to explain the system. Italy got only print advertising, and France got a different TV ad campaign by Saatchi & Saatchi Advertising.
In the U.S., Fuji ad agency Angotti, Thomas, Hedge in New York took a cuddly approach. With an estimated $5 million budget, Fuji ads asked, "Isn't it about time taking pictures made everyone smile?"