Nikon Corporation

views updated

Nikon Corporation

MASS MARKET INITIATIVE CAMPAIGN
THE NIKON SCHOOL CAMPAIGN

1300 Walt Whitman Road
Melville, New York 11747
USA
Telephone: (631) 547-4200
Fax: (631) 547-0299
Web site: www.nikonusa.com

MASS MARKET INITIATIVE CAMPAIGN

OVERVIEW

Nikon Corporation, well known for its high-end cameras embraced by professional photographers and advanced amateurs, faced an increasingly challenging marketplace in the final years of the twentieth century. The market for film cameras was saturated, and the emerging digital-camera market was crowded with competition. In addition to such old-line rivals as Canon, Minolta, and Olympus, Nikon had to contend with well-heeled newcomers, including Hewlett-Packard and Sony. Starting in 2000 Nikon and its ad agency, Minneapolis-based Fallon Worldwide, made a concerted effort to extend the Nikon brand to the mass market.

Nikon introduced a number of new products geared toward the general consumer, and the company scored a hit in 2001 with the Coolpix 775, a best-selling camera during that year's holiday season. The campaign reached a peak in 2002 with the airing of the first Nikon television spot in eight years. The spot, titled "The Search," supported the launch of the Coolpix 2500, the first camera to feature a swivel lens. Although there was no announced budget for the campaign, Nikon had steadily ratcheted up its advertising budget, which grew from $11.7 million in 2000 to $18.2 million in 2001 and to almost $20 million in 2002.

While Fallon made some progress in positioning Nikon in the mass market, the two parties experienced creative differences. In October 2002 Nikon severed its business with Fallon, and the mass-market campaign came to an end.

HISTORICAL CONTEXT

Founded as an optical glass company in 1917, Nikon did not make its first camera until 1946, following the lead of two other Japanese companies, Canon and Minolta. Japan at the time was occupied by U.S. forces, who bought the Japanese cameras in post exchanges and brought them home. The Nikon cameras were especially well regarded because of their high quality. During the Korean War, U.S. combat photographers asked Nikon to produce lenses that would fit their German Leica cameras, and soon professional photographers of all types were singing the praises of Nikon lenses and cameras. By the mid-1960s photographers for such major magazines as Life and National Geographic relied on Nikon cameras, which had become accepted as professional-grade while also attracting the interest of advanced amateurs. While Canon and Minolta branched off into making office equipment such as copiers and printers, Nikon remained focused on high-end cameras. In 1983 it gained a foothold in the low end of the market with the introduction of its successful One-Touch camera. But by then the camera business was mature and offered few opportunities for sustained growth.

In the 1980s Nikon placed more emphasis on other optical equipment—such as binoculars, eyeglass lenses, and sunglasses—and diversified into consumer electronics, developing scanners and printers. During the 1990s the camera industry underwent a major upheaval, as digital-camera technology came into its own and quickly surpassed traditional film cameras. The digital revolution also brought with it a new batch of competitors, including Hewlett-Packard, Nokia, and Samsung, electronics companies with no reputation in the photography field but with the advertising muscle to carve out shares in the digital-photography market. In 1997 Nikon introduced the Coolpix line of consumer-priced digital cameras. The first product, the Coolpix 300, was a disappointment. Despite a sleek design it produced poor pictures. Nikon made steady progress on the Coolpix line, albeit enjoying more success on the high end of the market.

As the 1990s came to a close, Nikon possessed a brand with an excellent reputation among professionals and camera enthusiasts, but it still faced a challenge in extending the brand to the mass market. Ever since Nikon hired Minneapolis-based ad agency Fallon McElligott in 1994, the mandate had been to extend the brand. In 2000 the agency (renamed Fallon Worldwide that year) at last launched an intense effort to establish Nikon in the mass market and to promote the company's new line of less-expensive digital cameras. To become more accessible Nikon also moved beyond its traditional channels of specialty photo stores and catalogs and added mass-market retailers such as Target to its distribution network.

TARGET MARKET

Most digital-camera makers concentrated on the huge family market, targeting women in particular. According to studies roughly three-quarters of all family pictures were taken by women. Wives and mothers were also the stewards of family memories and the maintainers of the photo albums. It was understandable that the likes of Kodak and Fuji Film would focus on this large slice of the market. Nikon opted instead to target a different demographic of the amateur-photography market: younger people—25 to 35 years of age, 45 at the outside—who were more technologically savvy and likely to be impressed by Nikon's innovations. The company further reasoned that these consumers would also be attracted to Nikon's reputation for quality.

COMPETITION

Nikon continued to compete on the high end of the photography market with longtime rivals Minolta, Canon, Olympus, and Kodak. It fought for market share on the lower end with these companies plus a range of newcomers who had arrived on the camera scene as a result of the switch from film to digital technology. These companies included Hewlett-Packard, Nokia, Samsung, and Sony. Because they all possessed other successful product lines in consumer electronics, they had already established the distribution channels needed to sell digital cameras at a mass-merchandising level. Moreover the digital entrants all had the kind of financial backing needed to launch aggressive advertising campaigns and to essentially buy credibility in the market. Their combined marketing heft was also instrumental in the rapid rise of digital technology, which supplanted film cameras at a faster-than-expected pace. Two traditional camera companies, Kodak and Fuji, were especially caught off guard because they had been reluctant to give up the highly profitable sale of film and fully embrace digital photography.

Cameras, which were not especially profitable, were actually of secondary importance to many of Nikon's competitors. Most of the companies instead jockeyed to control the output side of the business: the print market. While the competition was developing home printers and self-service kiosks, Nikon remained focused on cameras, but it was not certain that its cachet with professionals would carry over to the mass market, where price was a key factor. In 2000 about two-thirds of digital cameras sold for $69 or less, placing a heavy burden on Nikon's marketers to convince customers to spend the extra money on a Nikon camera, the least expensive of which, the One-Touch, cost $129.

CREATIVE DIFFERENCES

Nikon's "The Search" was the first U.S. television spot for its South African director, Kim Geldenhuys, who had to cut both 30- and 60-second versions. "I found it very frustrating to have to do a 30-second spot and put so much into it," he told Adam Remson of Shoot magazine. "It is a new discipline for me because we've always been able to do sixty-second spots [in South Africa]. And if not a sixty, we could do a fifty or a fifty-five or a forty-five. We have got these really strange lengths that we can make commercials over here."

MARKETING STRATEGY

In 2000 Nikon introduced a number of new 35-millimeter digital cameras geared toward the mass market, including the One-Touch Zoom 90QD and the Light-Touch Zoom 120ED/QD. In May of that year Nikon ran the first ads for these products in consumer magazines, making the point that Nikon cameras were not just for professionals. But Nikon also did not neglect the high-end digital market, introducing the $1,000 Coolpix 990, which was promoted in photo and computer magazines with ads aimed at the "discriminating digital camera user," according to a Fallon spokesperson.

All told Nikon spent $11.7 million on advertising in 2000, but as the company made a greater push to enter the mass market, its ad budget rose to $18.2 million in 2001. The primary digital camera it promoted was the Coolpix 775, listed at $399, a price at which consumers were willing to stretch to buy a Nikon product and one that afforded a profit in a low-margin field. Todd Wasserman of Brandweek quoted market research analyst Michelle Slaughter as saying the Coolpix "was a very strong product for [Nikon] at a very competitive price point." It was one of the best-selling digital cameras during the 2001 holiday season. The supporting advertising campaign featured actress Kim Cattrall (from Sex and the City) as a spokesperson. Her endorsements consisted of hosting promotional events and appearing with the Coolpix 775 during interviews. Nikon also conducted a guerilla-marketing van tour across the United States to offer consumers a chance to try out the Coolpix 775.

In 2002 Nikon launched another product in the Coolpix line, the Coolpix 2500, priced on store shelves at $379.99. It was in support of this product that Nikon's mass-market push reached its culmination and resulted in the production of Nikon's first television commercial in eight years. The spot, called "The Search," evolved from the experience of Fallon's creative team with the camera. "It's not like picking up a normal camera," Fallon's group creative director Bruce Bildsten told Aaron Baar of Adweek. "It has a quality to it. You just want to pick it up and play with it." The defining feature of the Coolpix 2500 was an inner swivel lens, which allowed the user to take a self-portrait or a picture of the sky, among other things, without tilting the camera. According to Baar, "as Bildsten and his team worked on ways to target young, digitally aware consumers, curious passersby took a fancy to a prototype of the camera…. That idea, coupled with Nikon's target of 25- to 35-year-olds, suggested a party where the camera gets passed around the crowd."

For the commercial "The Search," Fallon chose the award-winning South African director Kim Geldenhuys, who had directed spots for BMW in European markets. Fallon was BMW North America's ad agency, so it was already familiar with the director's work. Because it was much less expensive to work in South Africa, the spot was filmed there. It was done in 18-hour days, during which Geldenhuys attempted to create a nonstop party, hiring a DJ and urging the actors to mingle during their downtime. As a result several improvised moments made their way into the commercial.

In "The Search" a gawky 20-something man at a party took a picture of himself against a sunset, drawing the attention of two attractive women, who asked to look at the camera and then took it inside. The young man chased the camera throughout the crowded party. When he finally caught up to it, it was in the possession of two different women. To determine if the camera really was his, the women scrolled through the camera's memory of pictures, finally coming across an embarrassing one of him. Highly amused by what they saw, they handed over the camera and left him to offer the awkward defense, "It's just a hobby." The spot's concluding line was "The one that swivels." The nature of the embarrassing picture and the man's "hobby" were left to the audience's imagination. "For all we know, it could be him wearing an engineer's hat, just playing with model trains," Bildsten told Baar. "The Search" was aired for the first time in late April 2002 during The Late Show with David Letterman. Afterward it was shown on a variety of network shows and national cable channels. For 2002 Nikon increased its advertising budget to nearly $20 million, most of which supported the company's strategy of gaining a foothold in the mass market.

OUTCOME

While Fallon's mass-market initiative met with some success, especially with the Coolpix 775 in 2001, it was not enough to overcome the creative differences that had developed between the agency and client. Six months after the "The Search" premiered, Nikon and Fallon terminated their relationship, the client stating in a press release that "the time was right to explore new creative options in our advertising activities." For its part Fallon was tight-lipped, merely saying, "We've been proud to represent this highly revered brand, and we wish them every success in the future." According to Adweek's Baar, however, "Nikon's conservative, retail-oriented ad approach clashed with Fallon's desire to craft brand-image ads. The client wanted to use an actor in its ads; the agency didn't." Shortly after the split, in fact, Nokia turned to its retail-marketing agency, Source Communications, and created a spot that featured actor Val Kilmer.

THE NIKON SCHOOL CAMPAIGN

OVERVIEW

Nikon Corporation, one of the leading manufacturers of professional photography equipment, ran an advertising campaign in 1997 to invite photographers of all skill levels to participate in the Nikon School, a seminar that traveled to cities across the United States. The advertisements ran exclusively in print media, including numerous photography magazines. One spot, "Tip #5," featured a close-up photograph of a cat and a small dog looking at each other. Below them, a mouse crouched on a dinner plate and nibbled at a piece of food as if oblivious to the larger animals looming over it. The caption read, "Tip #5: Some photo opportunities only last a second." A block of smaller text continued, "For some reason, we feel compelled to open by mentioning the lunch that comes with our 8-hour class. But more importantly, our expert instructors will teach you everything from basic composition to advanced exposure techniques. You also get the 157-page Nikon School Handbook, all for a mere $95." Nikon's tracking studies revealed that inquiries about the school increased sharply after the ads ran, and in many cases attendance at the seminars was higher than the company had anticipated. The campaign was developed by Fallon McElligott, which had been named advertising agency of the year in 1995 by Advertising Age.

HISTORICAL CONTEXT

Nikon, a global company based in Japan, was established in 1917 when three optical manufacturers merged. By 1997 the company was making many types of optical equipment, including cameras and other photography products, microscopes, binoculars, electronic imaging equipment, eyeglasses, and surveying instruments. It was one of the few companies that handled all the steps in the manufacturing of optical equipment, from making glass to shaping, polishing, and assembling lenses. Optical technology by Nikon was used in the radiometer with an optical sensor that produced visible, near-infrared light for the Advanced Earth Observing Satellite called Midori, which had been launched in 1996. The company also produced a large objective mirror for astronomical telescopes, and its research into the properties of the spectrum was being applied to fields such as astronomy, biotechnology, and the making of semiconductors. In response to demand for high-quality equipment for professional photographers, the company began manufacturing camera lenses in 1932, selling more than 24 million by 1997. It made 35mm format cameras since the 1940s and was one of five companies that cooperated to develop the Advanced Photo System (APS), an alternative to 35mm cameras and film that was introduced in 1996. Nikon's share of the worldwide photographic products market had varied over a five-year period, with 6.8 percent of the market in 1997, 3.6 percent in 1996, 1.3 percent in 1995, 8.5 percent in 1994, and 4.1 percent in 1993.

Because Nikon photographic equipment was used extensively by professionals, the company's advertising had frequently used technical language to describe the quality and versatility of the products. One ad in a photography magazine in 1993 consisted of an impressive landscape photograph and a picture of a Nikon camera surrounded by fourteen paragraphs of text full of highly technical information such as: "By adding the Nikon SB-24 AF Speedlight, you can automatically balance the flash illumination with ambient background light without calculating fill-flash ratios." The ad featured the tag line Nikon had used for years, "We Take the World's Greatest Pictures." In 1994, at the suggestion of ad agency Fallon McElligott, the tag line was expanded to "We Take the World's Greatest Pictures. Yours." The addition of the one word made the company's products seem more relevant and accessible to the average consumer without alienating the professional photographers who had been Nikon's biggest customers.

The Nikon School was established in 1993 to help amateurs, semi-professionals, and professionals improve their skills in 35mm photography. Its intensive, one-day sessions replaced a similar program that had featured two-day sessions. Each year the courses were offered on weekends in cities across the United States. Using lectures and slide shows, the school's instructors covered topics such as composition, flash photography, and photographing natural phenomena such as rainbows and sunsets. Because students had a broad range of skill levels, the Nikon School had to be interesting enough for advanced students but not too difficult for novices.

TARGET MARKET

Many of Nikon's advertisements in 1997 targeted the general public. In that year the company ran the "Nikon School" campaign and also a series of simple, uncluttered spots for its photographic equipment. Ads from two or more of the company's campaigns frequently appeared in the same issue of magazines such as Popular Photography. One camera advertisement featured a snapshot of a young man swimming beneath the words, "You point it. You shoot it. You frame the sucker." Smaller text added, "When we say the N50 is easy to use, we don't mean 'easy for people who've won Pulitzers for Photography.' We mean seriously simple, as in, hand it to an average dad and say, 'push here.' In Simple Mode, you can literally point the N50, shoot it, and capture frame-worthy, SLR-quality images like this. The camera is positively foolproof. Or more to the point, dad-proof." The ad concluded with the new tag line "We Take the World's Greatest Pictures. Yours."

Although Nikon had broadened its marketing efforts to appeal to the average consumer, the company had not abandoned the professionals who had always been its core customers. One magazine advertisement in 1997 invited photographers to visit Montana with their cameras. Positioned next to spectacular pictures of mountains in Glacier National Park was text explaining why a professional photographer had used Nikon equipment to make the images, how he had composed them, the type of lenses he had chosen, the aperture settings, and the shutter speeds he used. The language was simple enough for an amateur to understand, but it provided details of interest to more advanced photographers.

By explaining the basics of photography along with advanced techniques, the Nikon School appealed to consumers with a broad range of skill levels, but most considered themselves amateurs or advanced amateurs. Some had recently purchased a sophisticated, single-lens-reflex camera, and they wanted to learn how to use it effectively. Some simply wanted a better understanding of photography in general. Others had studied photography in the past but needed a refresher course that would inform them about the latest equipment and techniques. Some had attended previous sessions of the school and knew how valuable the classes could be. "Repeat visitors to the school treat the experience as if it were a pilgrimage. They are seeking inspiration and renewal for their craft. And they know from prior experience that they will get it," said Tom McEnery, management supervisor with Fallon McElligott.

COMPETITION

In 1997 some of Nikon's competitors also ran magazine advertisements that featured photography tips for readers. A two-page spread for Fuji Photo Film U.S.A. (commonly known as Fujifilm) in the March issue of Popular Photography was timed to coincide with the airing of the magazine's cable television program Freeze Frame: Switzerland. A team of still photographers using Fujifilm products had traveled throughout Switzerland with cinematographers from the Travel Channel, taking pictures on assignment for Popular Photography and providing tips for viewers who wanted to improve their travel shots. The magazine advertisement featured a large background photograph of Europe's largest glacier filling a valley between jagged mountains. Smaller photographs of Swiss scenery and the television program's participants were superimposed over the large picture, along with explanatory text. The captions outlined the content of the program, listed the dates and times at which it could be seen on television, provided tips for taking photographs like those in the ad, and told which film and equipment made by Fujifilm had been used to make each image.

PROMOTIONAL VIDEOTAPES

The Nikon School was also publicized through the "Nikon Masters Series," a video collection of some of the world's best photographers working in their fields of expertise. The series featured interviews, documentary footage, and photography on location. Along with an inside perspective on professionals at work, the videos showed how accomplished photographers used Nikon equipment. The series covered photojournalism, wildlife photography, portraits, action shots, and the use of light to make exceptional pictures. Beginning in August 1997 the videotapes were available from Nikon dealers and directly from Nikon Corporation.

Another competitor, Sigma Corporation of America, ran a series of magazine advertisements that showed how professional photographers used the company's products to take spectacular pictures. One ad featured a large photograph that had been shot through the railing of a bridge on the Thames River in England. The caption read, "For this assignment, I went back to this familiar bridge on the Thames and made some fresh discoveries. The Sigma lens I chose is light, compact, and easy to operate." The text went on to explain some of the advantages of that lens, along with the aperture and shutter speed used to make the photograph. Another advertisement was dominated by a photograph of an unusual, rounded structure with a metallic exterior. The caption read, "Amid buildings and sites stamped in history, at the south bank of the Thames, you suddenly come upon futuristic scenes. The Sigma lens I chose to photograph this scene responded accurately to my design."

Another series of advertisements promoted the New York Institute of Photography's correspondence course. A two-page ad in Popular Photography called the institute the "world's oldest and largest photography school" and said, "We guarantee you'll be a better photographer! Send for free booklet to learn how NYI will bring out your hidden talent. For well over 80 years NYI has helped promising amateurs become successful photographers. Now our new 'Century 2000' Method makes learning at home easier and more enjoyable than ever." The ad explained that the course included lessons on videotape and audiotape, an illustrated textbook, and audiotaped critiques of each student's work. It included a coupon that the reader could fill out and mail for more information, along with the company's Internet address.

In contrast, much of the advertising by several of Nikon's other competitors in 1997 promoted the Advanced Photo System (APS), a new type of equipment and film that made photography easier for consumers. These ads typically focused on the products instead of featuring how-to tips. APS had been developed jointly by Nikon, Canon U.S.A., Minolta Corporation, Eastman Kodak Company, and Fujifilm. All five companies made their own brands of APS cameras, but only Kodak and Fujifilm made APS film. Although each company had advertised the launch of the new system in 1996, Kodak had spent by far the most—about $80 million world-wide—to publicize its Advantix brand. According to Advertising Age, the total spent by all advertisers to promote APS products in 1996 was $115 million. In 1997 Kodak's worldwide advertising budget for Advantix was about $100 million, with about $60 million allocated for advertising in the United States. Kodak's new advertisements for 1997 explained what APS was and familiarized the public with the Advantix brand name. Each spot featured Kodak's general corporate signature "Take Pictures. Further." Canon promoted its ELPH brand of APS products with the tag lines "It's So Advanced … It's Simple" and "ELPH: The Big Name in the Advanced Photo System." The tag line for Fujifilm's advertising was "Isn't It About Time Taking Pictures Made Everyone Smile?" Minolta marketed its Vectis brand with the catch phrase "Big Bang Technology." The five companies ran some co-op advertisements, including one that read, "The Nikon Pronea 6i Advanced Photo System camera takes many different lenses. And Kodak Advantix film." In addition to the Pronea brand, Nikon offered the Nuvis brand of APS compact cameras.

MARKETING STRATEGY

By featuring Nikon equipment at the seminars and offering expert instruction in the latest photographic techniques, the Nikon School helped the company convey an image of professionalism without blatantly promoting the brand. Likewise, the advertising campaign took a low-key approach to publicizing the company's products. Although the Nikon name was prominently displayed in the ads, the company's logo and general tag line, "We Take the World's Greatest Pictures. Yours," were not included. Each advertisement caught the reader's eye with a large photograph above two rectangles, one solid gold and one black. The gold block framed a caption, and the black one framed the words "The Nikon School" in reverse type.

In one advertisement a group of firefighters posed in front of a building with flames and smoke billowing out the windows. The caption said, "Tip #34: Remember to compensate for backlighting." The accompanying text added, "Before snapping a photo, it's a good idea to take a gander at what's happening in the background. Just one of the topics covered in our eight-hour class, where you'll learn everything from basic composition to advanced exposure techniques. You also get the 157-page Nikon School Handbook and a lovely lunch, all for $95." Another advertisement showed a tiny dog looking intimidated by the unusually tall fire hydrant towering over it. The caption read, "Tip #44: To get animals to hold still, give them something to focus on." The smaller text said, "We can all feel a tad overwhelmed now and then, and photographers are certainly no exception. Which is exactly why we recommend taking our eight-hour class, where you'll learn everything from basic composition to advanced exposure techniques." A third ad featured a photograph of two tombstones with the names "Knock" and "Knock." The caption said, "Tip #52: Try a slower film for motionless objects."

Because each ad focused on one aspect of photography, the campaign helped show that the school offered instruction in many subjects, such as how to choose the best lens for each picture; how to measure light; how to choose the best film speed, shutter speed, and aperture; how to use flash lighting; how to recognize and compose an effective photograph; and how to master close-up photography. The advertisements addressed problems that photographers of all skill levels commonly encountered, and they promised that students would find answers and access to knowledgeable professionals at the Nikon School. Each ad included a telephone number to call for more information, and some provided the company's Internet address and a list of cities where the school was scheduled to be offered that year. The advertisements ran only in print media, particularly photography magazines.

OUTCOME

One of the "Nikon School" campaign's primary objectives was to boost attendance by reaching out to creative amateur photographers who wanted to improve their craft. According to McEnery of Fallon McElligott, the advertisements succeeded in generating enthusiasm for the school and conveying the key message that the classes could help photographers who wanted to be better than "good enough." Another objective was to encourage consumers to call for more information. McEnery said the campaign clearly achieved those goals. "The 1997 Nikon School season has been one of the most successful ever. Anticipated ticket sales were exceeded on a regular basis. Given our limited schedule of insertions, Nikon was able to track the spike in mail and phone calls following each ad. And we had concrete proof of those conversations; approximately a third of attendees in several sites stated in their exit survey that they learned about the Nikon School through advertising," McEnery noted.