Channel Strategy - Kodak clips its distribution portfolio

Kodak has revealed it has slimmed down its distribution channel and dramatically altered its business model to cope with the growing demand for its CD-R products.

Kodak has revealed it has slimmed down its distribution channel and dramatically altered its business model to cope with the growing demand for its CD-R products.

The vendor has reduced the number of its distributors from 170 to 80 and said it will encourage all its distributors to order through the Internet as part of its new market approach. On Monday partners were still being told details.

Gareth Jones, sales and marketing manager at Kodak Digital and Applied Imaging, said the company took the opportunity presented by year 2000 and internal changes to restructure all of its contracts.

He said Kodak then chose a select number of distributors that will add value through their ability to buy and sell.

"We have tried to minimise the big buyers and maximise the big sellers. We wanted to eliminate the companies with big chequebooks but poor sales. At the moment, five of our distributors use our Web site to order and we would like all our distributors to do the same," said Jones.

Jones said he believed selling on the Internet will become huge and the success of online sales in the US for its digital products has encouraged the vendor to look closely at the UK.

Jones also said Internet trading would need to adopt the advantage of improved feedback and good evaluation of products and services enjoyed by the traditional channel models.

Kodak joined forces with Panasonic to form Matsushita Media Manufacturing at the end of last year, a venture which will take responsibility for the manufacture of CD-R recordable discs, DVD-Roms and other storage solutions.

Jones said he believed DVD will become an important commodity in business in the next 12 months.