Little more than fifty-year ago, Theodore Levitt exhorted marketers to correct their “marketing myopia’. The shortsightedness that distorted their strategic vision caused them to define their businesses narrowly in terms of products rather than broadly in terms of customer needs. The term “marketing myopia” entered the vernacular of corporate managers and the pages of textbooks, when the Harvard Business Review (HBR) reprinted the article. It identified marketing myopia as the most influential marketing idea or concept of the past half-century.
“Marketing Myopia” is the quintessential big hit HBR piece. In it, Levitt, who was then a lecturer in business administration at the Harvard Business School, introduced the famous question, “What business are you really in?” With it came the claim that, had railroad executives seen themselves as being in the transportation business rather than the railroad business, they would have continued to grow. The article is as much about strategy as it is about marketing, but it also introduced, the most influential marketing idea of the past half-century: that businesses will do better in the end if they concentrate on meeting customer’s needs rather than on selling products or services. “Marketing Myopia” won the McKinsey Award in 1960.
A short-sighted and inward-looking approach to marketing that focuses on the needs of the company instead of defining the company and its products in terms of the customer’s needs and wants. This results in the failure to see and adjust to the rapid changes in their markets, which obviously results in business failure in the long run.
Rail-road or Transportation: Which is Your Business?
In his paper, Levitt cited a famous example of railroad business by advocating the view that railroad business did not stop growing because the need for passenger and freight transportation declined. In fact, the need for these services grew by many folds. He emphasized and said the railroads are in trouble today not because that need was filled by others like cars, trucks, airplanes, and even telephones for that matter but because it was not filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business. The reason they defined their industry incorrectly was that they were railroad-oriented instead of transportation-oriented. In other words, they were product-oriented instead of customer-oriented.
Indeed, there must be very few business students who have not read this article which is about how a company can ensure its continued growth. To summarize, we can say that marketing myopia is a new challenge that urges organizations to redefine their industries broadly and to take advantage of the growth opportunities in that broad vision. Using this archetype of the railroads, Levitt showed how they declined inevitably as technology advanced, and because they defined themselves too narrowly. To continue growing, companies must ascertain and act on their customer’s needs and desires, and not bank on the presumptive longevity of their products.
Marketing myopia is true for all companies who define their markets too narrowly. Many examples from the past show that when businesses have redefined their markets from product-focus to consumer-focus they have continued to grow. This is so because new targets were defined. Perhaps the best example is the recent one, where categories such as television, cable television service providers, Internet, DTH, telephones, wireless communication, and film producers have all converged into a single category known as ICE, which is a combination of Information, Communication and Entertainment domains.
Brand Vision Myopia
The same is true of brands. Companies that segment a market using their own yardsticks or price as a parameter, instead of defining markets from the consumer’s point of view, often suffer from similar myopia. This results in the brand not being able to exploit its full opportunity. It often even prevents the brand from cracking open a whole new market.
However, there is a whole new context to the argument advocated by Levitt fifty years back where it is being argued that few companies have learned the lesson of customer orientation so well that they have fallen prey to the new form of marketing myopia that, in today’s business environment. It can also cause serious distortions of strategic vision and the possibility of business failure, or at least exacerbate the marginalization of the marketing function.
New Marketing Myopia
The New marketing myopia occurs when marketers fail to see the broader societal context of business decision-making, sometimes with disastrous results for their organization and society. It stems from three related phenomena discussed below:
- A single-minded focus on the customer to the exclusion of other stakeholders.
- An overly narrow definition of the customer and his/her needs.
- A failure to recognize the changed societal context of a business that necessitates addressing multiple stakeholders.
About the Book
Ujaya Shakya’s Brandsutra is a collection of inclusive & incisive thoughts on Nepal’s marketing & advertising field. This book tries to introduce all of the 360-degree communication touch-points, elucidating the Integrated Marketing Communication model, or convergent branding.
Published by FinePrint
Ujaya Shakya is the founder and managing director of Outreach Nepal based in Kathmandu and the author of ‘Brandsutra’.