Reference no: EM132907283

Fuji Film Introduces APS In the early 2006s, Fuji Photo

Film, USA, joined forces with four of its rivals to create the Advanced Photo System (APS), which is hailed as the first major development in the film industry since 35millimeter technology was introduced. In February 2012, the new 24-millimeter system, promising clearer and sharper pictures, was launched. But by the end of the year, the lack of communications and a limited supply of products had made retailers angry and consumers baffled. Advertising was almost nonexistent. Because the product was developed by five industry rivals, the companies had enacted a secrecy agreement in which no one outside the company management, including the company's sales force, would know details about the product until each company introduced its APS products on the same day. When the product was actually introduced, there was little communication with retailers about the product, virtually no training of sales representatives on the product (so that they could demonstrate and explain the features), and a great underestimation of demand for the product. Fortunately, Fuji pressed on by taking an "honesty is the best policy" stance and explaining to retailers and other customers what had happened and asking for patience. In addition, Fuji increased its research to better ascertain market positioning and size. By 2013, Fuji had geared up production to meet the demand and was increasing customer promotion. APS products were on the road to success. By 2014, APS cameras owned 20% of the point-and-shoot camera market with the number expected to more than double by the year 2018. DISCUSSION Suppose you are a part of a Fuji team whose task it is to examine issues about market share, customer acceptance, complaints, and the reasons why new products are successful. 1. As stated, by 2014 APS cameras owned 20% of the point-and-shoot camera market with the number expected to more than double by the year 2018. Now it is the year 2018 and the market share might be nearer to 40%. Suppose 30 customers from the point-and-shoot camera market are randomly selected. If the market share is really 0.40, what is the expected number of point-andshoot camera customers who purchase an APS camera? What is the probability that six or fewer (S 20%) purchase an APS camera? Suppose you actually got six or fewer APS customers in the sample of 30. Based on the probability just calculated, is this enough evidence to convince you that the market share is not 40%? Why or why not?