Sony, Kodak lead U.S. battle for share in digital cameras

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It's a classic marketing snapshot, the moment when the novelty has worn off and marketers rally their forces to stave off commiditization.

Last year, digital-camera unit sales passed film cameras for the first time, signaling a beginning of a mature market. With digital cameras in more than 30% of households, the almost $6 billion industry is turning to marketing to hook consumers no longer sold exclusively on the "digital" photography itself.

The marketing is well under way, with several players grabbing significant market share. Leading off in the U.S. are Sony and Kodak. And their marketing strategies and advertising styles couldn't be more different.

technology, heritage

Sony's latest commercial features Aerosmith's Steven Tyler being shot by a gaggle of hip chicks, one smart enough to have brought her sleek Sony Cyber-shot T1. Kodak TV ads, out last week, feature the theme "The best part of photography is the prints" with two versions, one showing people using Kodak kiosks, another at an EasyShare printer dock at home. Sony's work was created by Y&R Advertising, and Kodak's by Ogilvy & Mather Worldwide, New York, both WPP Group agencies.

Both strategies make perfect sense. Sony's position is based on its legacy of quality technology and cutting-edge design, while Kodak taps its heritage to focus on ease of use and getting to the picture.

Both are clear about whom they're selling to. Kodak research shows that women take 70% of the pictures in the family and are by far the keepers of those memories and albums, said Nancy Carr, Kodak director-worldwide advertising. Its EasyShare system made its debut in 2001 with those women in mind. Kodak began with a camera and computer dock for easy downloading, but has evolved to include an EasyShare printer dock that Kodak said women take with them as a party printer.

And it tends to live in the kitchen: Women come home with the digital camera, plop it on the dock, and out come the prints, Ms. Carr said.

Chris Chute, senior analyst at IDC, said, "They're just cashing in on what they've always done, looking at photography in a holistic way."

Unlike Kodak, Sony has no film-camera legacy. Its strategy was born as digital technology at one of the leading consumer technology companies in the world. Sony's target? Men and women aged 25-55.

While their most recent ad features Aerosmith's Mr. Tyler, the hero is really the product, a small, sleek, Cyber-shot T1 camera that shoots quickly and has a huge LCD screen. It's one of the first commercials to use the new Sony Electronics tagline "Like No Other."

Still, Sony is aware of the many newbies in the digital-camera market. It's created a whole marketing substrategy to address concerns and questions of mostly first-time buyers. Rolling out in June is Sony's Worry Free Digital campaign for its digital imaging products, in conjunction with its partner retailers. Sony imaging products will be branded Worry Free Digital Products (or WFDP). The effort stems from the idea that consumers have questions about things like battery life and shutter quickness, so why not be ready with the answers?

no $99 sonys

"More than 20 million people will buy digital cameras this year, some repeat buyers, but the majority are first-time buyers. The Sony brand is an assurance to them that the product is simple, reliable, easy to use and has a great design," said Greg Young, Sony Electronics' general marketing manager for digital cameras. "Now we'll take on questions and concerns head on with Worry Free Digital."

IDC's Mr. Chute said Sony's strategy also helps avoid price wars. "Sony is about cutting-edge technology and design, and they will use that to continue to sell their products for a premium or fair price. You'll never see Sony offer a $99 camera," Mr. Chute said.

So who wins? Kodak, with its long photography heritage, or Sony, with its cool style and technology heritage?

Actually, there's room in the market for both, although smaller competitors still at the lower end of the market are expected to eventually fade.

"We'll probably reach a point where things should have shaken out but won't. You'll see companies staying longer than they should by buying market share with advertising and low-priced products," Mr. Chute said. "The winners will be the companies with an edge, like in the film days. Those who continue to develop new technologies, offer quality products and give value."

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