After a tumultuous few years under the ownership of Hoya, the Pentax camera division was sold off to Ricoh in 2011. The company's faithful fans (Pentaxians, as they're called) have no doubt been wary of another corporate buyout, and wondering what the future holds for their favorite brand.
One of the first major changes was the speedy exit of Ned Bunnell, President of Pentax Ricoh's US operations. Bunnell, who had been with the company since 2005, was replaced by new Executive Vice President Jim Malcolm. Formerly Director of Corporate Marketing at Sony, Malcolm had most recently worked as a consultant with Ricoh, facilitating Pentax's transition into the company. Bunnell had been a friendly if occasionally divisive figurehead for the old Pentax, and many were curious to see what the new boss would bring to the table.
Late last year, Malcolm reached out to customers via the company's Facebook page, looking for Pentaxians he could talk to over the phone; essentially, he was looking to set up a series of getting-to-know you chats. This was not a new tactic for Jim—he had used a similar approach during his earlier stint at Sony—but it was certainly an unusual step in the greater camera business. As a rule, vice presidents of major corporations simply don't call up end-users to shoot the breeze.
We recently had a chance to talk with Jim about what he's learned in his discussions with customers, what the demand for a full-frame Pentax camera is like, and whether Pentax has the ambition to be one of the major camera brands on the global stage.
You recently began reaching out to customers directly via the Pentax Facebook page. How did the customer outreach program get started?
This is a new piece to Pentax, but it’s not new to me. Over my career I’ve always tried to get outside of the Ivory Tower, if you will, and really listen to what is going on in the market. In the old days you used to do a lot of focus groups and sit behind the glass window and listen to what turns out to be a contrived conversation. So I just started picking up the phone and calling people. And whether it came from our call centers or just people you learned about that had a passion for photography, or for whatever product it is that they’re using, I just got in the habit of calling customers.
So when I took over Pentax in the US back in October, I tried to solicit people to talk to. Unlike my Sony days where there were a lot of Sony users, Pentax is a smaller company and we had to find a way to really get an outreach and find people that were interested in sharing their voice. So we decided to mix a little bit of the social media outreach effort with something that I wanted to do, which was to talk to people. And that’s how we got started here.
How does your relationship differ with Pentax's customers compared to when you were at Sony?
Sony was so massive and you always felt like you were at arm’s length with [the customers], even when you talk to them. There’s not a genuine believability or… maybe people didn’t have the passion that these Pentax customers have. The one thing that I’ve learned, at least talking to this community—and I don’t know if it’s because we reached out to them through the community or whether Pentaxians are by default that much more passionate—the level of knowledge and education and experience they have with our products, and really their personal outlook on and view on the future of Pentax, is so much stronger than anything I addressed back in my Sony days.
What kind of feedback have you gotten so far?
"It’s all over the map (laughs). I’ll tell you the most interesting piece to me, the most interesting finding, was almost everybody says, “I’m not going to beat you up on full frame, because I’m sure that horse has been beaten. In a way, I don’t really need full frame. I’m super happy with the product that I have. The weight of it, the weather sealing, just the overall size of the product. Maybe somebody needs full frame, but it’s not for me."
Right, so this is kind of consistent with a lot of the research that we’ve done internally and it’s a little bit rewarding, and I guess that’s my big surprise. If you follow what the Internet says and you read the forums, the only way that Pentax is going to survive is full frame. Well, the Pentaxians are saying, “Just keep doing what you’re doing." Let’s work on optics, let’s work on the size of the camera, or the weather resistance, and battery life and resolution and start paying attention to—continue paying attention to—the camera the way it is.
What feedback have you gotten from the Pentax community regarding the Ricoh buyout?
I spent a little more than a year on the Ricoh side of the fence working on the post-acquisition integration of Pentax into Ricoh. So I’ve had the opportunity to see Ricoh shooters around the world, and the least developed region is the US, to be very candid. I don’t think Ricoh cameras ever really got a hold in sales. [Ricoh] really didn’t get a foothold in distribution. So we’re kind of starting from scratch here, but the product itself—the Ricoh product—is absolutely amazing.
I had the opportunity to visit with a lot of Leica dealers in Europe and there’s a very tight correlation between Leica dealers and Leica users together with the Ricoh product. The level of image quality, the optical design, the ultimate output of product is so superior to a lot of stuff that’s in the market. For that niche, they get it, they absolutely get it. Then the GXR, which has the interchangeable lens, when we came out with the M mount for that product. Now you can take all your Leica lenses and M mount and put it onto a system without having to spend four grand, five grand.
So the relationship was really strong, and there was a lot of respect for the Ricoh products. We need to do a better job in the US introducing the Ricoh product. Right now we have a fantastic product in the GR Digital IV which is a fixed focal length point-and-shoot. But the image quality, the LCD quality, the control, manual control as well as RAW—the camera is absolutely phenomenal.
What do you feel the Pentax community's general reaction has been towards the Ricoh buyout?
The end users want to see the change. “What is the value that Ricoh is going to bring and when are we going to see it?” I’ve had the benefit of kind of “looking under the kimono” so I’ve got a different level of excitement. But it’s taken more time than anybody expected to really integrate two working teams, to develop leadership within each of those teams, and kind of set the direction and the tone and be able to share some of that core competency that Ricoh has in the imaging and the optics together with the Pentax engineers and turn it into one team and build roadmaps and be able to bring the products to market.
I think everything that we’ve looked at to-date has been an evolution, whether it’s the launch of the K-30...the MX-1 is probably one of the most recent that shows the mix between the two, the WG-3 is being refined with the combination of the two (teams), but we really haven’t had a full product launch based on a combined team effort yet.
So the Pentaxians that I’ve talked to, the end users are excited, like, "When are we really going to see the benefits of it?" And I think they’re generally appreciative that I’m calling, that I’m building their voice into the future and they’re optimistic that we’re going to have a really great company and culture that can compete with Canon and Nikon.
So do you see Pentax in the next couple of years being a viable competitor to Canon and Nikon?
No doubt about it. I have no hesitation, in my mind and in my business direction, that in the future—whether it’s three years or five years out—that there will be three dominant imaging companies on a global basis and it will be Canon, Nikon, and Pentax/Ricoh.
The reason I say that with such confidence is if you really look at Ricoh, which is our parent, Ricoh as a company is more than half the size of Canon and is twice the size of Nikon. And they’re already a dominant imaging company. They have a global footprint, they have office automation, and obviously the printer business and copier business is their heart. So if you had to compare Ricoh as a company we’re much more similar to that of Canon than we are of Nikon.
What do you see as the key to unlocking the US market? Is it an in-store presence or are there other strategies?
So this is another conversation I have with end users, because one of the end user complaints I hear quite often is, “Where do I buy the products? The only place that they have product is online, my local guy doesn’t carry it and, if he does, he doesn’t necessarily carry the breadth of line that I need.”
So step one for us, quite candidly, is to fix the retail distribution footprint. And this is how I tell it to end users when I talk to them, back about five years ago when Pentax was purchased by Hoya, Hoya purchased Pentax for the medical division. And not to oversimplify it, but they basically put the digital camera business out to pasture and just kind of let it do its thing.
Part of that strategy was to take the sales and put it through distribution and a lot of longstanding Pentax dealers were offended by it. “What do you mean I’m not important enough for you call on me anymore? You’re going to put me through to distribution? I’m going to drop you.” So the majority of Pentax distribution was dropped, so now our first step in this is to rebuild that distribution. So I always ask if theres a retailer in your area that’s selling our product, tell me about your experience in that store and what we need to be doing better. If there’s not, tell me the name of the company that you would go to. Who should be selling the product in your area?
I turn that information over to our sales department and I get our sales guys moving on refining what we’re doing in the stores or soliciting new business so we can expand it. I would say in fiscal year 2013 the majority of our effort is to focus on rebuilding our distribution channel primarily starting with those dealers who can sell an ecosystem of Pentax products. We are not interested simply in selling main models and competing on price.
That’s not going to help us, that’s not going to help the industry, and it’s not going to help the end user who has a passion for photography. So finding those dealers who are capable and willing to get into a profitable business model of selling the ecosystem—meaning the camera body, the lenses, the accessories—and building a long-term relationship with a passionate brand, this is our strategy.
Are you planning more exclusives like the WG-10 at Target?
Although it’s easy for us to imagine that 100% of our business can go through photo specialty, the truth is that consumers are buying at other places now. So companies like Target are becoming increasingly important and some would argue even more important than somebody like a Best Buy, who is struggling. So I wouldn’t call that a one-off part of our strategy, they give us a reach that is kind of unmatched and we’ll work to bring customers into the Pentax family on those channels. It then becomes our responsibility to make sure that we deliver the best customer service and give that customer the best product experience so they can quickly become brand loyal so we can sell them to new products and new opportunities as they become available.
I often have a great conversation when it comes to glass, when it comes to optics. It’s really interesting to start to hear what’re their shooting styles, and what really matters and what’s the trend in their shooting style. And one of the recurring themes that we’re having is many folks—as they become more engaged in the Pentax brand and more excited about photography—they see themselves shifting from the convenience of the zoom to really wanting to go shoot with primes. And that seems to be kind of this tipping point where, “You know what? When I move from a zoom to a prime, I feel like I’m more of a professional, or more in control of my photography, and I’m shooting my way.”
So as we’re sitting down with the business planners and we’re talking about our product perspective, how are we going to address the prime market and how are we going to give the prime shooters the best possible experience? And how does that tie back into video shooting with a prime on our cameras? And it really opens up an interesting space for product development and positioning of ourselves in the industry.
What feedback have you gotten about the Q—specifically the glass that's available in that category?
So unfortunately I have not had the opportunity to talk with anybody in our most exciting category, which is the Q. I have not actually found an end user that has reached out or I’ve been able to reach out to that is a heavy Q user or solely a Q user. And the reason I go to the Q when you start talking about mirrorless and glass and all these types of things is that the Q as a segment is such a great opportunity.
We now have six lenses that mount onto the Q and we have additionals coming. If you really think about how to move customers from that cell phone space, the convenience is always having a mobile phone with you. To offer a compact camera with interchangeable lenses, we’re now not only offering better image quality—and you know other things like RAW and post-capture opportunities in the camera that you would get from a compact—but all of the glass and the shooting options that go in front of it. And what we’re finding with those people that do shoot Q—and again this is outside of my discussions because I haven’t actually talked to an end-user—but what we do find online is the people who are using the effect lenses and the toy lenses, if you start to look at their profiles and go back and look at some of the other pictures they shot, they’re either on Instagram or some of these other photo manipulation sites. The Q becomes kind of an interesting tool.
Now I can manipulate my image coming in and it’s not the highest quality lens, but it’s an effect lens. And then I put all my filters and everything on the back end of that and it’s a great opportunity for us… So if you find any really heavy users of Q going on, I’d love to talk to them.
What’s the biggest thing you’ve learned having conducted this outreach project at Pentax as opposed to your previous posts?
Don’t assume that you have the answers in-house. So when I would walk through and look at the team and they have their whiteboards and their work schedules and all these things that they’re trying to accomplish, because they’re living inside this building and they have their own biases and their own assumptions. In most cases they don’t line up with what is happening in the market.
That’s not to say that what they’d been planning is necessarily wrong—you don’t necessarily want to just follow, you have to lead. But being able to lead our loyal customers and deliver to them on our kind of brand promise and setting a brand direction, which is not really set for Pentax right now... don’t assume that you have the answers until you talk to people.
It's an interesting time for Pentax. As a smaller brand looking to find a foothold in a rapidly changing camera market, they have the freedom to make bold gambles that bigger brands might not. If Jim is any indication, Pentax is certainly bullish about its future, but at the moment it's unclear how Ricoh will steer the company through rough economic seas.
When asked whether the Facebook outreach program would continue, Jim said that there is a certain saturation point where you inevitably begin to hear the same answers over and over again, so the current flavor of Q&A will probably be scaled back. The next phase, he says, is to "find people who have abandoned the brand" and figure out why that happened. He also hopes to talk to some shooters already loyal to other brands, to find out what could bring them into the Pentaxian fold.
We're not convinced that the demand for a full-frame Pentax DSLR is as tepid as Jim claims. Rumors have swirled for years about such a camera, creating increasing frustration and hope in equal parts. We also have our doubts that Pentax/Ricoh can realistically challenge such well-cemented market titans as Canon and Nikon, regardless of the raw resources at the company's disposal. As ever, it will be interesting to see what the future holds.
We thank Jim for taking the time to discuss the future of Pentax. To check out more about Pentax's social media outreach you can head over to the company's official Facebook page or shoot an e-mail to firstname.lastname@example.org. For some end-user reports about conversations with Jim, take a gander at this 24-page discussion thread at pentaxforums.com.