Marketing Myopia

by Levitt Theodore (1975)

By Abhinav kp

Theodore Levitt (1925-2006)

• PROFESSOR AT HARVARD BUSINESS SCHOOL AND EDITOR OF THE “HARVARD BUSINESS REVIEW”

• DEAN OF MARKETING, KNOWN FOR HIS CONTRIBUTION IN MARKETING. THE JOURNEY MAY HAVE STARTED WITH “MARKETING MYOPIA” IN HARVARD BUSINESS REVIEW IN 1960 WHEN HE WAS A LECTURER AT HARVARD

• POPULARIZED THE TERM OF GLOBALIZATION WITH HIS ARTICLE “GLOBALIZATION OF MARKETS” IN 1968

• AWARDS INCLUDE MCKINSEY AWARDS FOR BEST ANNUAL ARTICLE AND CHARLES COOLIDGE PARLIN AWARD AS MARKETING MAN OF THE YEAR IN 1970.

• ONE OF THE MOST IMPORTANT FIGURES IN MARKETING AND ECONOMICS

Essence of the Article

Written in 1960, the article revolutionized the thought processes of business managers who were narrowly focused on the products they sold—they were short-sighted or myopic, as Levitt calls it.

It is important to define an industry by asking a simple question—“what business are we in?

To ensure growth, companies must define their business properly based on customer needs and desires. Businesses are actually customer satisfying institutions/entities.

Myopia

my·o·pi·a lack of imagination, foresight, or intellectual insight

Fateful Purposes

Companies went into decline because they did not define their industries properly

Examples of some successful and unsuccessful companies that were product-oriented and not customer-oriented are: Railroad didn't stop growing because need for passenger and

freight transportation declined

Hollywood escaped being totally ravished by television

Shadow of Obsolescence

Threats to products within industries and remaining unprepared to the improvements cripple the presence of companies Dry cleaning: synthetic fibers and chemical were appearing, we no

longer need dry cleaning.

Electric utilities: solar energy, fuel cells, and other power source are threat to electric utilities.

Grocery store: supermarket are doing a better job of understanding customers need than grocery stores.

Self-Deceiving Cycle

Self-Deceiving Cycle Self-deceiving cycle occurs when companies lack the vision. Inappropriate self-

assessment system leads to failure in the long run. Four conditions that guarantee the self-deceiving cycle:

Belief that growth is assured by an expanding and more affluent population

Belief that there is no competitive substitute for the industry’s major product.

Too much faith in mass production and in the advantages of rapidly declining unit costs as output rises

Preoccupation with a product that lends itself to carefully controlled scientific experimentation, improvement and manufacturing cost reduction

Population Myth

Assured profits based on expanding population Increasing purchases? Market growth based on this assumption Limits imagination

absence of problem absence of thinking

Production Pressure Mass Production

Drive to PRODUCE!!! Spectacular profit possibilities Marketing neglected

Lag in Detroit Failed to reveal customer’s wants Product-oriented

Ford Production genius Marketing genius

Product provincialism “Creative Destruction”

Dangers of R&D

Top-heavy engineers and scientist management Bias in favor of Research and Product Development Marketing Treated as residual activity

Biased towards controllable variables Consumers are:

Unpredictable Varied Fickle Stupid Shortsighted Stubborn Bothersome

Step Child Treatment

No one interested in basic human needs Questions about customers and Markets not asked More excitement in more product then the

customers Articles detailed towards production and none for

marketing

The Beginning and End?

Customer-Satisfying process viewpoint is vital

Violating rules of Scientific Method Define the problem Develop hypothesizes to solve the

problem Customer satisfaction not being

considered as the problem Selling and Marketing are different

Visceral Feel of Greatness

Leaders need to have vision that can produce eager followersFollowers are the customers

Management must not produce products but provide customer-creating value satisfactionsFirm must think of “buying customers”

Leader must know where they are goingIf a leader goes down any road, they might

as well stay at home.

A Few Terms

Product Provincialism Step-Child Treatment Creative Destruction The Beginning and End

Thank You