Marketing Myopia

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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.

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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

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Essence of the Article

• Written in 1960, the article revolutionized the
  thought processes of business managers who were
  narrowly focused on the products they soldthey
  were short-sighted or myopic, as Levitt calls it.
• It is important to define an industry by asking a
  simple questionwhat 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.

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Myopia

• myopia
• /mi'ope?/
• noun
• noun myopia
• nearsightedness
• lack of imagination, foresight, or intellectual
  insight

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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)

6
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.

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Self-Deceiving Cycle
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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 industrys 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

9
Population Myth

• Assured profits based on expanding population
• Increasing purchases?
• Market growth based on this assumption
• Limits imagination
• absence of problem
• absence of thinking

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Production Pressure

• Mass Production
• Drive to PRODUCE!!!
• Spectacular profit possibilities
• Marketing neglected
• Lag in Detroit
• Failed to reveal customers wants
• Product-oriented
• Ford
• Production genius
• Marketing genius
• Product provincialism
• Creative Destruction

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Dangers of RD

• 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

12
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

13
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

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Visceral Feel of Greatness

• Leaders need to have vision that can produce
  eager followers
• Followers are the customers
• Management must not produce products but provide
  customer-creating value satisfactions
• Firm must think of buying customers
• Leader must know where they are going
• If a leader goes down any road, they might as
  well stay at home.

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A Few Terms

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

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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.