Photography and Low-Income Classes in Brazil: A Case Study of Kodak

John Paul — Wed, 07 Dec 2005 15:52:20 -0500

Session Title:
Innovative Solutions

Date of talk or publication:
2005

Speaker Name / Title:
Melchior Dikkers & Paulo Cesar Motta

Organization:
IAG Business School, PUC-Rio, Catholic University of Rio de Janeiro

Description:
In 2004, Kodak Brazil began targeting the low-income classes that account for 60% of Brazil's population and 38% of its consumption. Brazil's low-income classes have an average daily income of $8.7 on a purchasing power parity basis and most possess televisions, radios, and refrigerators and want to buy mobile phones and washing machines. But Kodak research had revealed that only 35% of Brazilian households owned a camera. Why had Kodak largely ignored the low-income segment of the market until 2004? First, many Brazilian marketing professionals within the company did not understand the low-income classes, the business opportunity they offer, and the importance of formulating a distinct marketing strategy to tap that opportunity. Second, Kodak Brazil had little autonomy with respect to doing things differently; all advertising campaigns, for example, were produced in the United States and translated. Kodak Brazil would have had a difficult time convincing headquarters that it needed a different a strategy to market to the low-income classes. Third, Brazil's general manager had little incentive to target the low-income classes; financial results were good despite focusing exclusively on the upper and middle classes. Moreover, Kodak headquarters did not measure whether Kodak Brazil was taking advantage of all opportunities.

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Photography and Low-Income Classes in Brazil: A Case Study of Kodak