So how much is Kodak worth now?

January 27, 2012

(The views expressed in this column are the author’s own and do not represent those of Reuters)

Kodak, one of the world’s best-known brands, is disappearing. Its products are obsolete; the company didn’t manage to change quickly enough.

Everybody loves the brand but nobody buys the stuff anymore.  Business editors everywhere in the world are writing the same obituaries: how lovely and how sad.

Anybody over 35 has fond memories of Kodak — the film, the cameras, the festivals, the holidays, fun and mementos and memories: all recorded for generations to come.

So if the brand is so well-known and so well-loved, why doesn’t somebody buy it and bring it back to life? Surely all the so-called brand valuation experts with their complex econometric measuring data would be delighted — for a fee — to put some kind of a price on it. Maybe Kodak’s long-time competitor, Fuji — still, incidentally, thriving — might want it.

Well, we still don’t know whether Fuji or Apple or Microsoft or even Rupert Murdoch, with his tarnished News Corp brand, might snap it up. With all that tweeting and twittering and blogging and googling, kodaking would fit in just nicely.

“Didn’t you get it? I kodaked you.”

The problem though is that, when a great brand goes into decline, it’s usually pretty hard to get it back up again. It’s very difficult to revive — although not impossible.

Leyland was once the most admired truck and bus maker in the world. Now look at it. The only company that still uses the once-great name is its one-time Indian associate, Ashok Leyland — and they seem to be a bit half-hearted about it. So perhaps Kodak could come back if it had a totally different and currently competitive product — but it wouldn’t be easy. In fact, it would be a hard slog.

All this confirms something about brands that’s very simple but very easy to forget. You get a good brand and you keep your reputation only if you make a good product that people really want and you keep on promoting it. You simply can’t build or sustain a brand, however much you spend, if your product isn’t good enough — because people won’t buy it.

So, the lesson is — don’t build on sand and keep your eyes open for a changing world.

Incidentally, as I write this, I’m beginning to learn that RIM is in trouble. “Who is RIM? Never heard of them.” Well, you know BlackBerry, don’t you?

Oh, well, easy come, easy go.

One comment

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Trenchant commentary as always, Wally. I totally agree with your argument that a brand can only be as strong as the underlying business that it supports. That is why the whole “brand as a separate asset on the balance sheet” is such a misguided notion. Brands cannot exist in isolation from the products/services that give them meaning and value to customers. For that reasons, brands are better thought of as multipliers on the performance of the underlying business.
BTW The Economist ran a similar piece contrasting the divergent fates of Kodak and Fuji that contained the excellent observation of the fallacy of “competing through one’s marketing rather than taking the harder route of developing new products and businesses.”

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