Marketing myopia

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Marketing myopia is a term used in marketing as well as the title of an important marketing paper written by Theodore Levitt.[1] This paper was first published in 1960 in the Harvard Business Review, a journal of which he was an editor. Marketing Myopia suggests that businesses will do better in the end if they concentrate on meeting customers’ needs rather than on selling products.

The Myopic culture, Levitt postulated, would pave the way for a business to fail, due to the short-sighted mindset and illusion that a firm is in a so-called 'growth industry'. This belief leads to complacency and a loss of sight of what customers want.

Some commentators have suggested that its publication marked the beginning of the modern marketing movement. Its theme is that the vision of most organizations is too constricted by a narrow understanding of what business they are in. It exhorted CEOs to re-examine their corporate vision; and redefine their markets in terms of wider perspectives. It was successful in its impact because it was, as with all of Levitt's work, essentially practical and pragmatic. Organizations found that they had been missing opportunities which were plain to see once they adopted the wider view. The paper was influential. The oil companies (which represented one of his main examples in the paper) redefined their business as energy rather than just petroleum. By contrast, when the Royal Dutch Shell embarked upon an investment program in nuclear power, it failed to demonstrate a more circumspect regard for their industry.

One reason that short sightedness is so common is that people feel that they cannot accurately predict the future. While this is a legitimate concern, it is also possible to use a whole range of business prediction techniques currently available to estimate future circumstances as best as possible.

There is a greater scope of opportunities as the industry changes. It trains managers to look beyond their current business activities and think "outside the box". George Steiner (1979) is one of many in a long line of admirers who cite Levitt's famous example on transportation. If a buggy whip manufacturer in 1910 defined its business as the "transportation starter business," they might have been able to make the creative leap necessary to move into the automobile business when technological change demanded it.[2]

People who focus on marketing strategy, various predictive techniques, and the customer's lifetime value can rise above myopia to a certain extent. This can entail the use of long-term profit objectives (sometimes at the risk of sacrificing short term objectives).

Similar terms[edit]

However, in case after case, industries have fallen under the shadow of mismanagement. What usually gets emphasized is selling, not marketing. Rather, the industry is failing because those behind it assumed they were in the railroad business rather than the transportation business. They were railroad oriented instead of transportation oriented, product oriented instead of customer oriented. For companies to ensure continued evolution, they must define their industries broadly to take advantage of growth opportunities. They must ascertain and act on their customers' needs and desires, not bank on the presumed longevity of their products. In short, the best way for a firm to be lucky is to make its own luck. An organization must learn to think of itself not as producing goods or services but as doing the things that will make people want to do business with it. And in every case, the chief executive is responsible for creating an environment that reflects this mission. Kotler and Singh (1981) coined the term marketing hyperopia, by which they mean a better vision of distant issues than of near ones.[3] Baughman (1974) uses the term marketing macropia meaning an overly broad view of your industry.[4]

References[edit]

  1. ^ Levitt, T. (1960). "Marketing Myopia". Harvard Business Review. 
  2. ^ Steiner, G. (1979). Strategic Planning: What Every Manager Must Know. New York: The Free Press. ISBN 0-02-931110-1. 
  3. ^ Kotler, Philip; Singh, Ravi (1981). "Marketing Warfare in the 1980s". Journal of Business Strategy 1 (3): 30–41. ISSN 0275-6668. 
  4. ^ Baughman, J. (1974). "Problems and performance of the role of the chief executive". Graduate School of Business Administration, Harvard University.