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More online exchanges with Kodak’s George Fisher

(Transcript of George Fisher’s Aug. 16 Internet chat session: continued)

Perry Ho: 4:41PM EDT
Mr. Fisher: Please tell me what is currently in progress regarding the reorganization of Eastman Kodak. As the only dealer of Kodak electronic imaging products and Photo CD service provider in the State of Hawaii, we have had a number of good and bad experiences with the company. We would like to know what to expect from the new Kodak because we still see confusion among Kodak’s divisions and personnels. It seems like a long time for some departments to figure out who they are and their relationship with other departments. I have yet to see some plan for change. Please let me know what Kodak is doing to become more like a single company than thousands of small departments. Thanks. Sincerely, Perry Ho DiscMaker Hawaii

George Fisher: 4:42PM EDT
Thanks for asking about our current progress in making our Kodak interface more effective with our customers. It is true that a large company like ours, which is also going through some significant technical transitions, sometimes creates confusion in our customer base. Much of this in our case has been the result of many new product introductions in the digital imaging area. Last year we restructured that area under Carl Gustin’s leadership and, I believe, we are beginning to see a much more coherent picture being presented to our customer base. We do still have some conflicting channel issues between our businesses, but I believe we are well on our way to working those out. I would be interested in getting your reaction at some point in the future to be sure we are making progress.

Sean Branagan: 4:42PM EDT
Is Kodak pursuing any opportunities in the area of electronic imaging (photo CD, etc.) for the medical and health care field? Any that involve Web technology?

George Fisher: 4:43PM EDT
Kodak, through our Kodak Health Imaging Systems subsidiary in Texas, is very aggressively pursuing opportunities in medical imaging, particularly as it relates to fields traditionally served by medical x-ray technology. We are able to effectively scan and communicate x-rays over communications networks and, in fact, now have a very good computed radiography capability which is appropriate in many applications.

Vaughn Broadcast Rental – Orlando: 4:44PM EDT
Hi, George–a question from the peanut gallery: Does Kodak have any plans to get into digital video for broadcast in the form of still-store systems?

George Fisher: 4:44PM EDT
We do not have any current plans to get into digital video broadcast, although increasingly the lines between video and still imaging are tending to blur and we have considerable capability as you know in both areas.

Robert Ridge (previous Guest Book question): 4:45PM EDT
I cannot understand why Kodak suddenly demands more sales in Japan and blames Fuji Film for unfair practices. Kodak products are freely available in Japan at competitive prices, as are Ilford films and European films such as Agfa. I have used Kodak film products for 35 years. First, why did you complain, and second, how are you going to become more competitive in Japan, which has an extremely competitive market for all goods and services?

George Fisher: 4:46PM EDT
I am happy to hear that you find Kodak products freely available in the Tokyo market where you live. Unfortunately, over all of Japan we are only able to serve about 30% of the market and appear in only about 15% of the retail outlets who sell film and camera products. We feel it is necessary for us to be able to participate in the entire market and compete effectively in order to assure the Japanese consumers they have the best choice and the most competitive prices. Once we have complete access to the Japanese market, we must earn consumer loyalty by providing leadership products in both film and other imaging product areas. It is our intention to do just that as we have in the past around the world.

John T. Walton: 4:47PM EDT
Reference the Fuji Film controversy, I feel that the American consumer will be aware of the fairness of trade and competition in the US. Our fair trade practices support Japanese competition in this country. We feel that it is only fair that this should be returned by Japan.

George Fisher: 4:47PM EDT
I absolutely concur with your feeling that the American consumer understands how open the US market is for products from all over the world. Unfortunately, I am not sure people generally understand just how restricted the Japanese market can be for US products since many of the barriers in Japan are very subtle and have been developed over many years. We too feel it is only fair that we have the same access to Japanese consumers that Japanese corporations, like Fuji, have to US consumers. In fact, that is all we are asking for.

Claude G. Diderich (previous Guest Book question): 4:51PM EDT
What is the future of Kodachrome slides and the associated process? Will Kodak eventually drop it?

George Fisher: 4:52PM EDT
Kodachrome remains the finest color film in the world in the eyes of many experienced photographers. Its superb sharpness, unique tone reproduction, and archival dye stability are the benchmarks against which all films are compared. Unfortunately, the complexity of the Kodachrome process and the general consolidation of the wholesale processing infrastructure has led to a decline in service time and, in some cases, processed quality of Kodachrome film. We believe a film like Kodachrome will always have a place in our professional portfolio and we’re constantly investigating ways to improve all of our products including Kodachrome.

Jay Okada: 4:52PM EDT
Dear Mr. Fisher: Could you give us comments on the article in Monday’s Wall Street Journal about Kodak’s past marketing strategy in the Japanese market?

George Fisher: 4:53PM EDT
The Monday Wall Street Journal op-ed on Kodak–suggesting that much of our limited success in Japan has to do with our marketing problems–unfortunately tells a very slanted story. In that op-ed, Mr. Latham cites the business consultants Abegglen and Stalk and their work of the early 80s. Not cited, however, are the subsequent conclusions reached by Abegglen as published in 1986 in Tokyo Business Today which essentially stated that as a result of our actions in Japan in a space of less than 2 years, Kodak, “a company that was under severe threat from Japan’s industry is now in a position to respond to that threat where it matters most in the Japanese market itself.” No one pretends that we didn’t make some mistakes in Japan, but we also became a success story even in the eyes of the Japanese. But we undeniably became confronted with a closed distribution system controlled by Fuji and condoned by the Japanese government. That system ultimately closed us out of about 70% of the Japanese market.

Fay Bryant: 4:53PM EDT
Why don’t you paint the top of the building on State St. gold?

George Fisher: 4:54PM EDT
As you know, we recently installed new lights and a new Kodak sign on one side of the Kodak building to symbolically demonstrate the new energy we see in Kodak and in our industry. I must admit I had not thought about painting the top of the building Kodak gold, but given that the roofing is copper and takes on the aged copper tones, I suspect we will leave that part as it is. But thanks for the thought.

J. Casares: 4:55PM EDT
What is Kodak doing to bring products to market faster? And how does Kodak focus on its customer needs from a market planning point of view?

George Fisher: 4:55PM EDT
We are reemphasizing our approach to obtaining customer input on our new product and service offerings through a program we call Voice of the Customer. You will increasingly see us listening better to our customers and, in fact, new products like our portable fun-saver camera and the new film system, APS, that we are bringing out next year, are both outstanding examples of implementations of this new process.

Tom Hess, CG Producer, Visual In-Seitz, Inc.: 4:57PM EDT
Is there a plan to upgrade the Portfolio CD format and associated authoring tools to keep pace with the demands for greater functionality?

George Fisher: 4:57PM EDT
We are continually working to define further refinements and upgrades to all of our offerings and, in particular, Portfolio CD. The associated authoring tools will no doubt have to be continually upgraded as well and as I know you do considerable work with Kodak you are probably even more familiar than I am with the current details on those tools.

Al LeBoeuf: 4:58PM EDT
I understand that Kodak used the Portfolio CD to publish its report to the stockholders. Is this true?

George Fisher: 4:58PM EDT
Yes, we did use Photo CD technology in the production of our annual report and obviously we were pleased with the result. I hope you were. Thanks

Question from the audience: 4:59PM EDT
We have found color images impractical for business reports and presentations because of the TIME it takes to print and duplicate them, as well as general document performance slowdown, even on very powerful PCs. Inevitable editing becomes a nightmare. Should we be expecting solutions like truly effective compression schemes?

George Fisher: 4:59PM EDT
Increasingly we as an industry will have to get much better at providing tools to enable the real-time editing of color images. I think a major step forward in this direction is enabled through the Live Picture activity, which we talked about on March 28 and which we are increasingly incorporating in all of our work on new image formats. The combination of these concepts along with new and improved image compression will increasingly make time less of a critical factor in the application of color images and reports.

Charles Eicher (previous Guest Book question): 5:00PM EDT
I very much appreciate this notice. Ironically, it appeared just after I watched your VP speaking on CSPAN. I recently watched George Fisher on CNN, showing his report on the US/Japan trade situation. I was wondering if there was any way to obtain a copy of your report?

George Fisher: 5:01PM EDT
Thanks for your interest in this very important issue. For your convenience the report can be found at http://www.kodak.com/aboutKodak/bu/cpa/JPMarketBarriers/P0menu.shtml

I had planned on being here for 1 hour and I wish I could stay longer. Frankly I’m overwhelmed by the response thus far. Thanks for all the great questions today. I truly enjoyed “talking” to you on-line and hearing your needs and concerns directly. As a matter of fact, since we received so many questions that we were not able to answer, we will be posting responses to all of them and will work towards getting them up in the next few weeks. In the future a variety of Kodak managers and experts will come on-line to meet with customers. If you have topics to suggest, please drop me a note in the Guest Book. I look forward to hearing from you! Good-bye for now and happy surfing! George

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