Kodak, Wal-Mart ink new distribution deal
During back-to-school season, Wal-Mart disrupted the marketplace with aggressive price cuts on roughly 16,000 items. Now, along with Kodak, the company is creating turmoil in the marketplace for all-in-one machines that fax, scan, print and copy.
Earlier this month, Kodak announced it had secured distribution for its new line of printers at Wal-Mart and launched the product by providing customers a tremendous value proposition. Kodak began selling its entry level EasyShare 5100 model three-in-one machine that copies, prints and scans in roughly 2,600 Wal-Mart stores, according to Steve Marzio, business manager for Kodak’s inkjet systems.
The 5100 model retails for $129 and includes an ink cartridge, but what makes the deal with Wal-Mart special is that Kodak is throwing in three additional color cartridges as a one-time bonus offer. Those cartridges would normally cost $45.
“The reason we are doing it is to accentuate our core proposition that ink should be affordable,” Marzio said. “We feel that current printer companies are charging a fortune for a thimble full of ink.”
In addition to calling attention to the price of ink, Kodak’s strategy with its machines is different from other companies because the printer head that applies ink to the paper is integrated into the machine rather than the cartridge as it is with other major brands.
“We thought it made sense to have the print head reside in the machine so [that] customers wouldn’t have to pay for it every time they buy a new cartridge,” Marzio said.
The other benefit of that strategy is that Kodak has designed a print head to higher engineering standards because it isn’t considered disposable. That makes Kodak’s machines a little more expensive than competitors’ models, which can be had for less than $100. For example, Kodak’s higher end 5300 model retails for $199 while a top of the line 5500 model with fax capabilities sells for $299.
Kodak’s strategy is to sell the machines at a fair price and be the undisputed leader on consumables such as ink and paper.
For example, black ink cartridges cost $9.99 and a five-ink-color cartridge is $14.99. A combo pack retails for $22.99. When it comes to paper, where Kodak has a more established brand reputation, the company offers a 180-sheet value pack that retails for $17.99 and a 135-sheet pack of premium paper that comes with a color cartridge for $19.99.
Despite Kodak’s strong brand recognition, it wasn’t until earlier this year that the company entered the all-in-one market with an exclusive product launch in Best Buy followed by distribution in Office Depot. The latest deal with Wal-Mart marks the third major retailer to offer the company’s machines and the company anticipates securing broader distribution going forward.