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Marketing Myopia
LEVITT, THEODORE (1975), “MARKETING MYOPIA,” HARVARD BUSINESS REVIEW, SEPTEMBER-
OCTOBER, 26-44,173-183.
ORIGINALLY THIS ARTICLE WAS WRITTEN IN 1960, HBR REPRINTED IT IN 1975 WITH UPDATED COMMENTS OF LEVITT,
USED THE UPDATED ARTICLE.
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 /mīˈōpēə/nounnoun: myopianearsightednesslack 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 (goods moving vs. transportation) Hollywood (movies vs. entertainment) Petroleum (oil vs. energy business)
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 ProductionDrive to PRODUCE!!!Spectacular profit possibilitiesMarketing neglected
Lag in DetroitFailed to reveal customer’s wantsProduct-oriented
FordProduction genius Marketing genius
Product provincialism “Creative Destruction”
Dangers of R&D
Top-heavy engineers and scientist managementBias in favor of Research and Product DevelopmentMarketing Treated as residual activity
Biased towards controllable variablesConsumers are:
UnpredictableVariedFickleStupidShortsightedStubbornBothersome
Step Child Treatment
No one interested in basic human needsQuestions about customers and Markets not
askedMore excitement in more product then the
customersArticles detailed towards production and
none for marketing
The Beginning and End?
Customer-Satisfying process viewpoint is vitalViolating rules of Scientific Method
Define the problemDevelop hypothesizes to solve the problemCustomer 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 ProvincialismStep-Child TreatmentCreative DestructionThe Beginning and End
Discussion Questions
1. “There is no such thing as growth industry, what we have is growth opportunities”--- explain.
2. What is “creative destruction?” How does it relate to the Strategy of a company?
3. Ford created a car with no custom options that was only available in black, but sold for $500. Levitt calls him as “both the most brilliant and the most senseless marketer” in American History. Why? Explain.