Kodak-Fuji Battle in U.S. Expected to Heat Up

Eastman Kodak Co. and Fuji Photo Film Co. will step up their battle this year to win business in the U.S. market for color film through aggressive promotions and other price-based tactics, photo dealers said.

Kodak’s average selling price for film probably will come down in an effort to narrow the gap with Fuji’s prices that opened last summer, dealers said. While the gap now is about half of what it was in the summer, it may narrow more as Kodak tries to take back the 3 percentage points of market share it lost last year, they said.

Fuji’s discount prices helped the company build its market share to 18%, and the company has said it can achieve a 25% share by the end of 2000. As Fuji wins share with lower prices, Kodak’s profit slips even as earnings come under attack from a stronger dollar, rising silver prices and digital imaging losses.

“It’s going to be a war,” said Barry Glick, president of Westside Camera, a New York photo dealer. “Fuji is smelling blood.”

Fuji’s film, which historically sells for 10% to 15% less than Kodak’s, was priced as much as 30% less last summer. The gap, which both companies say has now returned to the average, could shrink more.

“It has to get narrower,” said David Ritz, chief executive of Ritz Camera Centers, a chain of more than 800 camera stores. “Fuji probably won’t come down more, and maybe will go up, with Kodak coming down.” Ritz is a big customer of Fuji, which supplies photographic paper to the chain.

Kodak President Daniel Carp, speaking at a photo trade show in New Orleans, said the company plans to use promotions and other techniques during peak film-use seasons to take on Fuji. “It’ll be a pretty good fight,” Carp said.

Fuji’s Rod King, head of its consumer-photo business in the U.S., said last week at the trade show that the company doesn’t plan any “unilateral” action to cut prices. As with Kodak, it will use more marketing and advertising efforts to boost share, he said.

Westside’s Glick, who uses Kodak material to develop his customers’ film, said Tokyo-based Fuji will have a harder time winning share this year from its Rochester, N.Y.-based rival.