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Kodak to cut ties with Olympics after over 100 year relationship

10/12/2007

ROCHESTER, N.Y. -- Photography icon Eastman Kodak Co. said
Friday it is ending its role as the official imaging sponsor of the
Olympics after next summer's games in Beijing.


The company, which is undergoing an arduous digital overhaul,
cited a shift in marketing tactics for halting a relationship that
dates back to the first modern games in Athens in 1896 when it ran
advertisements in the program.


"As we complete the transformation of Kodak, it makes sense for
us to take a new direction," said Elizabeth Noonan, Kodak's
director of brand management.


"Digital technology changes everything, including the way we
market our products and services. Our new business strategy
requires us to reassess our marketing tactics as well, and adapt
them to changing market conditions and evolving customer
behavior."


Kodak is one of 12 sponsors in "The Olympic Program," the top
tier of business corporations that each spend tens of millions of
dollars for rights to market the Olympic logo. Kodak has served as
the official photography sponsor for the games over the years.
Other global Olympic sponsors include Coca-Cola, McDonald's,
General Electric and Visa.


In Beijing, Kodak will provide an imaging center for
photojournalists, a diagnostic center to treat athlete injuries and
Olympic identification badges for thousands of athletes, officials,
journalists and volunteers.


Kodak signed an eight-year agreement valued at more than $100
million to continue as a global sponsor for the 2002 Winter Games
in Salt Lake City, the 2004 Summer Olympics in Athens, the 2006
Winter Games in Turin and the 2008 Summer Games.


While the Olympics are "a great way to build a global brand,"
Kodak spokesman David Lanzillo said, "they also lock us into
promotional activities within a finite time period. We fully plan
to reinvest those marketing dollars into other activities that more
directly connect us with our customers over a much broader time
period."


For example, a Kodak van equipped with photo scanners has been
traveling to U.S. cities since last April to encourage people to
digitize film prints currently stored in drawers or shoeboxes.


"I've actually seen consumers bring suitcases full of
pictures," Lanzillo said. "They have those digitized and
uploaded" to Kodak's online business.


The picture-taking pioneer, which remains the world's top maker
of photographic film, is applying the finishing touches to a
drastic, four-year digital makeover.


Kodak has piled up nearly $3.2 billion in restructuring charges
and accumulated $2.1 billion in net losses over the last 11
quarters. Its work force will slip to around 34,000 at year-end,
half what it was five years ago.