Vendors develop strategies for evolving photo category

Drug Store News, Sept 22, 1997 by Allene Symons

"The foundation of the drug channel's stable success in photo is photofinishing," said King, who oversees Fuji's recommended program intensive promotions, such as discounts on photofinishing with multipack film and QuickSnap purchases.

* Imation's strategy for drug store chains focuses on flexibility, according to marketing operations manager John Gregerson, who explained that Imation does not dictate the price points of film products it offers to consumers, and this allows the retailer to customize their offerings. "This is particularly advantageous to regional chains with photo category sales large enough to support private label," said Gregerson. An example is a chain-specific promotion for Imation's Garfield one-time-use cameras and a Halloween event at a local zoo.

Gregerson also noted that Imation's products with their colorful graphics draw customer attention, such as Garfield cameras and the Photo Memory Maker four-pack kits of one-time-use cameras.

Among the options for drug chains in Imation's 1998 program are marketing and merchandising support materials, including instantly redeemable coupons, bonus exposures and cash rebates, which Gregerson notes, are relatively easy for retailers to administer.

* Konica USA's two-segment strategy includes consumer products and customer service, according to Konica's advertising and marketing director Paul Gordon. He explained that in film and low-priced cameras, "our position has been to be a profit line for the retailer and a line that affords differentiation from competitors."

Gordon said compared to Kodak and Fuji, who are in all outlets and battle for market dominance, "inventory turns might increase, but bottom-line contribution suffers." Konica offers an alternative and "does not try to be all things to all retailers." Konica's promotions are aligned with highly visible partners, such as its fall promotion with the Dr. Seuss license. "This ensures solid turns of inventory, differentiation of product and a profit line for the retailer," said Gordon, who noted that Konica can also service an account with private-label film.

On the photofinishing side, in the consolidating chain drug industry, "with many of the retailers using the same photofinisher, they risk the opportunity once again to differentiate," said Gordon. Besides serving wholesale photofinishing customers, "we also see a great opportunity for on-site photofinishing," to complement overnight processing. "The emergence of digital imaging also offers a new revenue stream," with products and services, such as Konica's PC Picture show.

* Noritsu's marketing manager, Michael Lammers, pointed out that stores with on-site photo labs have seen increases not only in photo processing but in all photo-related items. Noritsu specializes in photo processing equipment, in contrast with vendors who also offer film, cameras and other products.

Noritsu's latest strategy for its on-site photo processing equipment is the Simple Management systems. These are lower priced than previous offerings, require as little at 7 square feet and are operated through a concept of shared labor using existing employees.