George Eastman founded Kodak in 1888 with a goal of making “the camera as convenient as the pencil.” One can argue that he succeeded with the introduction of the Brownie, an inexpensive camera, in 1900. With the Brownie, Kodak made cameras accessible to the masses: affordable, portable, and easy to use.
Kodak created the amateur photography market and held a dominant position through most of the twentieth century. Only the introduction of the digital camera in 1999 — which it helped invent — triggered the end of Kodak’s dominance over photography.
“Bait” and Lock In Customer with Base Product
In 1900, Kodak introduces the Brownie, the first mass market camera. It sells for only $1 (equivalent to $30 in 2019) and introduces amateur photography to the masses.
“Hook” Customers with a Consumable Product and Service
The Brownie comes preloaded with film. Once the film is used, amateur photographers send the film back to Kodak for processing. Photographers get hooked and need to come back if they want to continue their hobby.
In 1900 photography is very new. Kodak uses low pricing for the Brownie and extensive marketing campaigns targeted at amateur photographers, including women and children, to spur customer acquisition. It sells 250,000 cameras the first year.
Enjoy Recurring Revenues from Consumable
At the time, film costs 15¢ a roll. For an extra 10¢ a photo plus 40¢ for developing and postage, users can send their film to Kodak for development. Repeat purchases of film and processing generate significant recurring revenues for Kodak.