Fujifilm Product Portfolio Analysis Marketing Essay

Photocentre is a one stop imaging shop in The Sultanate of Oman. It is a subsidiary division under The Zubair Holding Company. The Zubair Holding Company is a family business based in Oman established by the Omani entrepreneur Mohammad Al Zubair in 1967, back then it was called Muscat Trading Company.

The Zubair Holding Company consists of sixty wholly owned groups of companies, subsidiaries and associates in Oman, the Middle East, India, the Far East, Europe and the USA. The diverse portfolio of The Zubair Holding Company includes automotive, real estates, home and business solutions, furnishing, heritage and culture, marketing communications and publishing among others.

History

Mohammad Al Zubair’s passion towards photography led him to establish Photocentre which started as a small shop offering basic photography services to the customers in 1972 (which was his first source of income). Today, Photocentre has become one of the leading and trusted names in photography and imaging across the country. Photocentre is a distributor of some of the world’s leading brands such as: Fujifilm, Fujinon, Broncolor, Fujitsu, Epson, Hama, Hasselblad, Manfrotto, Mitsubishi Pelican, and Praktica. The brands extend to offer a wide range of services which include: photography, developing and printing, photo enlargement prints, customized framing, digital photo editing among many others.

Client Portfolio

Photocentre’s client portfolio consists of a range of reputable governmental bodies and private companies in Oman which includes but not limited to: Royal Court Affairs, Ministry of Defence, Supreme committee of Town Planning, Palace Department of Photography, Shangrila bar Al Jissah Resort and Spa, Bahwan Engineering Company, Intercontinental Muscat.

Location

Photocentre showrooms are located in two major areas in Muscat, the capital city of Sultanate of Oman. The electronic consumer products are also available in 13 major hypermarket and consumer electronics chains: Carrefour, Lulu hypermarkets, Sharaf DG, Extra and E-MAX.(www.photocent.com)

Fujifilm

The marketing strategy will focus on one of the main leading brands offered by Photocentre which is Fujifilm.

Fujifilm was founded in 1934. It offers a wide range of consumer products such as: Digital cameras, 3D image products, Binoculars and other supplies. In the business sector it offers medical systems, graphic system, and recording media among many. (www.fujifilm.com)

Fujifilm milestones:

Fujifilm introduced the first digital camera in the world with removable media in 1988.

Fujifilm made the first single use recyclable camera in the world in 1986.

Fujifilm ranked number eight globally in 2007 on the volume of cameras manufactured.

Vision and Objectives

The vision:

To offer happy memorable experience to our customer

Photocentre’s long term objectives For Fujifilm brand are:

Continue to diversify our offerings in the imagining and photographic services.

Increase the market share of the brand by 30% by 2017

Currently Fujifilm digital cameras ranked number three with nearly 14% market share.

Expand our network across the country to reach 80% coverage by 2017

Currently Fujifilm covers 40% of Oman and it is available throughout 13 different hypermarkets and nearly 20 partner shops across the country. .

Achievability of the objectives in current market conditions:

To measure the achievability of the objectives under the current market conditions PESTEL analysis is conducted. The following analysis will focus on the main three factors that affect the brand:

Technological Factors:

The consumer electronic industry is an unstable industry. Companies that offer technology solutions to consumers are in fierce competition to provide the latest trends in technology; this led to a shorter life cycle for products belonging to this category including digital cameras. A well-known example for a failure to adapt to new technology is Kodak example, after being rated one of the world’s five most valuable brands. (The Economist, 2012) Kodak recently reported a third-quarter loss of $222m, the ninth quarterly loss in three years (The Economist, 2012) due to their reluctant attitude to accept moving from film cameras to digital cameras. While Fujifilm the long term direct competitor acted fast, diversified and sought new outlets for expertise, that revenue of film went from 60% of its profits in 2000 to simply nothing, (The Economist, 2012).

The digital camera market faces a major threat from the smart phones market as well, as consumers are rapidly relying on their smart phones’ attached cameras to click pictures. Although, the threat is increasing, some companies such as Canon believe that smart phones cameras would not pull the rag from under the digital camera, (Hiyama, H. 2012). Canon sees good potential in the Oman market for its new range of products especially from universities, print shops and other institutions, (Times of Oman, 2009). Despite the Smartphone’s threat the digital camera market is rapidly increasing which is evident by the number of new models with new and richer features releasing day after day. (Seymour, 2010)

Economical Factors

The Research and Markets Offers Report: Global Digital Camera Market 2011-2015″, 2012, explains that the increase in the spending capacity and the perspective of a digital camera as a primary or secondary household accessory has increased the purchasing of digital cameras in the emerging markets. “As a result of the increasing purchase of digital cameras in the emerging markets, the global vendors are expected to have a higher percentage of their sales from the emerging markets during the period 2011-2015.” On the other hand, price is considered the top decision factor across most cameras segments. But when consumers consider the cameras with prices above $300, price then becomes the least important factor, as features; brand name, performance, and latest technology become priority (Tarr, G. 2010).

According to “Oman Consumer Electronics Report Q4 2010” Oman’s consumer electronics devices market is a very promising market. The consumer electronic market is forecast at $480.0 million in 2010, this is expected to increase to $593.2 million by 2014, driven by new technologies and the growing popularity of digital lifestyle products. Also, the government strategy to move towards the digital world has shifted the mindset of Omani consumers and increased their digital product purchasing.

The report addresses that “Spending is expected to pick up again after 2010, as new technologies and features such as higher capability and feature-rich products and the rollout of 3G and 4G services play as demand drivers. On the other hand, growth is forecast to remain below pre-credit crunch levels in 2010-2014, as consumers feel the effect of the regional property slump and credit tightening”.

Sociological Factors

Consumer technology products are proving to be a key component of a higher quality of life for many consumers in the GCC region. They are gaining a huge popularity in the region simply because they are status symbols and consumers are willing to purchase the latest trends with little consideration to the price especially when it comes to smart phones and tablets.

In Oman culture and art are highly regarded by people and photography is a very popular hobby. Omani talented photographers are being recognized internationally and regionally, and due to increasing number of demand on photography, The Sultan Qaboos has issued a decision to establish an association under the name of “Photography Association” at the level of a Directorate to be affiliated to the Minister of The of Royal Court. (Royal Orders to Establish Photography Association, 2012).

Fujifilm product portfolio analysis

Globally, Fujifilm is well known for its digital cameras and copiers; however the company has altered its product portfolio over the past 10 years to the business side in an attempt to survive the decline of traditional photographic film by diversifying their product offerings into areas such as medical equipment and materials used in flat-panel displays. Now, the medical product line accounts for 12% of Fujifilm revenue and the flat-panel display generates 10% of its revenue (Osawa, J. & Inagaki, K, 2012).

The business to consumer segment competes in consumer electronics industry , the product portfolio consist of digital cameras with eight product lines ( X, S, F, Z,XP, T, J , A and 3 D cameras) , film photography, instant cameras with one line that consist of four models ( Instax Mini 7s, Instax Mini 8, Instax Mini 50s ), Binoculars and camera accessories.

This report focuses on the (input) product offering of Fujifilm brand which are the digital cameras as they are the most profitable products in the consumer segment. The focused market is Oman’s market as Photocentre is based and operates in Oman only.

BCG Matrix tool is used to analyze Fujifilm (camera) products portfolio, the focus here is on the Fujifilm product portfolio distributed by Photocentre:

Stars

F series, S series and the instant cameras are the stars of Fujifilm, as they have a high market growth and a high market share.

Question Marks

X series and the Z series have a high market growth but a low market share.

Cash Cows

J series has a low market growth but a high market share.

J series is at the mature stage of the product life cycle and it is considered the most profitable category.

Dog

A series has a low market growth and a low market share.

Due to the introduction of new models in other series the A series is considered outdated and customers are hesitant to buy cameras with basic features. Photocentre is trying to get rid of the remained stock of this series and does not plan to promote it in the future.

Further analysis:

Stars:

The S series is doing will not only in Oman’s market but in America and other parts of the world, Ron Gazzola, marketing and operations VP, Fujifilm North America stated that “they had great success and saw a lot of market share growth with the long-zoom S-series cameras, like S2700 and S1800”. (Tarr. Greg ,2010).

Although instant cameras are not using any of the digital cameras technology, they are doing very well as many consumers need to get a printed version of their clicks instantly, something that digital cameras don’t provide. Also , the low cost of the cameras is another attractive factor for its huge popularity, prices start from AED 280 , the profit is made from selling the film which costs AED 30 for 10 photos.

Question marks:

The Z series was designed keeping in mind female shoppers, to increase the market share from this product line promotional efforts must be targeting a niche market, such as causal young female photographers as the models of this series are very fashion oriented as it comes in fashionable feminine colors. This series also offer the ease of uploading the images to Facebook and Youtube.

New Products:

The X series has introduced two new models recently: FUJIFILM X100S The FUJIFILM X100S these models come with the new technologically advanced APS-C X-Trans CMOS II Sensor and improved EXR Processor II, the X100S is mow one of the world’s fastest autofocus speeds of up to 0.08 seconds (Ottawa, 2013) Therefore, the X series have a potential in becoming a star because of the launch of these new models

Fujifilm product portfolio caters to different needs and come in different price ranges, making the objective of offering diversified products and services to the consumer an achievable long term objective if the purpose was on strengthening the offerings not just extending them.

Customer perceived value

Fujifilm promises their digital cameras customers’ a value that exceeds their expectation “More than you imagined” is Fujifilm’s brand promise which it communicates to its customers.

Fujifilm works to create a balance between innovative technology and at the same time offer value for money. One of Fujifilm methods to achieve this objective is mass produce. Fujifilm has developed ways to mass-produce highly advanced new products so that they are affordable for users and profitable for manufacturers. (Daly, T, 2002) an example of that is Fujifilm’s (NANO CUBIC ) technology, Fujifilm successfully applied this technology to the available mass production lines, which led to a lower cost to convert existing manufacturing facilities and, ultimately, a lower price for the end user.

Customer value from market trends perspective:

Award winning products: Fujifilm products are known for their good technology, many of their cameras have won awards the recent one was for the X-Pro1 which has won the award “European Professional Compact System Camera 2012-2013” along with many other awards. (www.fujifilm.com)

Fujifilm provides a wide range of technical features in its cameras such as :

a wide range of memory storage capacity, high resolution photos even in the most affordable ranges, a wide range of zooming capacity, image stabilization features: ensuring blur free and sharp images, a wide range of battery life capacity, High speed continuous shooting , Video recording as a standard feature , among many others.

The cameras come in various colors to satisfy different tastes such as pink, blue, orange, red, purple along with black, sliver and white.

Sleek designs to satisfy fashion-conscious camera shoppers.

Protective features for adventures camera shoppers or those who love outdoor shooting: the protective features are: water proof, freeze proof, heat proof and dust proof.

High quality lenses. All Fujifilm Finepix cameras use the world renowned Fujinon Lens that is used popularly in numerous situations including satellites in outer space, TV/film, security and compact cameras. ( Daily News, 2011 )

Price ranges: Fujifilm cameras come in different price ranges that starts from below 300 AED to 10, 00 AED.

Organizational Value:

Solid, trusted and long term relationship: Photocentre has been the exclusive dealer of Fujifilm in Oman since 1984. Moreover, Photocentre has been in the market since 1974 this offers customers the assurance of dealing with an experienced and trusted dealer.

Photocentre network is extended to two dedicated showrooms in prime locations in Muscat and 13 selling points in hypermarkets and consumer electronic chains: Carrefour, Lulu hypermarkets, Sharaf DG, Extra and E-MAX.

Photocentre have more than 11 customer services employees to assist and answer consumers inquires.

Efficient stock management: Fujifilm warehouse is located in Dubai, this insures that Photocentre updates and replaces stock in less than a week time.

Photocentre offers its customers a range of added value services such as :

An extended warranty, Fujifilm as a manufacturer offers a one year warranty while Photocentre offers two years warranty for Fujifilm products.

Trade- in offer, Photocentre offers their customers the opportunity to exchange their old camera from any brand with a new Fujifilm camera (or any other brand from the available range).

Product testing: as per the commercial rules in Oman, returning products that can be tested in store is not permitted. However, Photocentre offers their customers a free rental on certain Fujifilm ranges, to allow customers to test the cameras outside the store.

Theses values will ensure the achievability of the objective of extending the Fujifilm network across the country and for increasing Fujifilm market share.

Competitors

Key Direct Competitors:

Given the wide range of products offered by Fujifilm they compete with different brands in different categories:

On the compact and low-end category:

Fujifilm competes with Nikon, Yashika, Samsung, Olympus, Sony and Panasonic.

On the semi-professional category:

The brand competes with Olympus, Canon, Nikon and Samsung.

On the mirror-less category:

The brand competes with Olympus, Samsung, Canon and Nikon.

The following table illustrates Fujifilm top two competitors in the compact low end category:

Marketing Mix

Fujifilm

Sony

Nikon

Product

Finepix JX550

Cyber-shot DSC-S3000

Coolpix L25

Price

AED 240,9

AED 299

AED 207

Place

Photocentre showrooms and all major hypermarkets

Three retailing shops in

Muscat and two in Salalah

Kimji Ramdas showrooms and all major hypermarkets

Promotion

In-store and print promotions and online , dedicated website for Photocentre and a page for Fujifilm

In-store and print promotions, no dedicated website for the dealer, browsers directed to Sony global website.

In-store , print and online promotions, dedicated website for the dealer with a dedicated page for Nikon

Indirect competitors:

Smart phones:

The Research and Markets Offers Report: Global Digital Camera Market 2011-2015″, 2012, suggests that the rapid penetration of smart phones in the global electronics market has been restricting the growth of the digital cameras markets, and as the quality of the Smartphone’s camera improves, the need to purchase a digital camera decreases. President Hiroyuki Sasa of Olympus had mentioned that “the market for compact digital cameras shrank at a faster speed and scale than they had imagined as smart phones with a camera spread around the world.” (Hiyama, 2012). On the other hand, smart phones cameras cannot compete directly or fiercely with digital cameras as they still lack some of the digital camera’s basic features: zoom, exposure flexibility and sharper images. (Graham, J. 2011)

Instagram

With more than 11 million active users, Instagram the social photography application is considered an indirect competitor to digital cameras. (www.practicalecommerce.com) this application enables users to click pictures through their smart phones and with high-tech editing features make them look like professional photos. The application is also popular because it allows users to share these photos instantly with their friends through Facebook and Twitter.

Migrating needs that may affect the industry

Fujifilm has been looking at different industries to find new applications for its existing technologies as well as borrowing their technologies for their own innovations through mergers and acquisitions, as well as business alliances. (Osawa, J. & Inagaki, K, 2012). Fujifilm has also been innovative in adopting new ideas for its digital cameras, one example of that is when Fujifilm launched the (finepix 40i), (appendix 1) camera with MP3 player, and it was considered one of the hottest products of the year 2000.

As the cameras attached to smart phones depend on wireless instant photo sharing, digital cameras consumers are increasingly demanding similar features on their digital cameras. According to the market Insight Corporation: consumers who hold a strong preference for the Fujifilm brand expressed the largest increase in Wi-Fi interest compared to other consumers preferring other brands , therefore the need to connect via Wifi network is one of the major needs for the digital cameras industry.

Another migrating need is to connect the camera with a GPS system to enable including the location of the picture taken when printing the photos.

Strategic benchmark companies

Quality and Performance : BMW

BMW, the ultimate driving machine offers cars in different designs, sizes and prices however it maintains the performance at the ultimate level in all the series. Also BMW is known for introducing technological features ahead of its competitors. As Fujifilm offers wide ranges of products that differ in their functions, prices and styles quality and performance must be at the ultimate level.

Customer Service : Virgin America

Virgin America is well-known for providing an engaging and extraordinary customer service experience. In order for Fujifilm to succeed in this regard it has to listen to the customers and engage them to not only exceed their expectation but to satisfy the unmet needs.

Responsiveness to market needs : Procter & Gamble

Procter and Gamble hold a strong product portfolio and continuously impress consumers with innovative products that help make their life easier without compromising on quality and added values making it difficult for consumers to consider a competitive brand. Being proactive in the consumer electronic ever-changing industry is vital for a brand like Fujifilm.

Superiority : Harvard

The name Fuji in the Japanese language refers to: an extinct volcano in Honshu that is the highest peak in Japan, the name indicates that the brand seeks to be on the top. When speaking of top ranked universities in the world, Harvard comes at the top of the mind. For Fujifilm to stay ahead of its competitors and dominate its market, the brand should be inspiring and sought -after.

Target Market

Fujifilm consumers can be divided in two major segments:

Demographics:

Fujifilm digital cameras consumers are both male and female; however the more colourful options of the cameras are aimed to the female market. Fujifilm targets middle class consumers while some of its cameras are also affordable for the lower middle class. In terms of age, Fujifilm offers cameras for all age groups, starting from Fujifilm INSTAX mini film (appendices 2) which designed to be children friendly which is a ” a star” product , to other ranges for adults up to age 70.

Psychographics:

Those who love adventures and travel can chose the range that comes with the protective features, while fashion conscious consumers may go with the sleek designs and bold colours. Those who want the camera for just capturing special family moments may chose the low end category. And those who are passionate about photography will chose the semi-professional and mirror less category.