The Myopia of Marketing (Levitt)
A concept coined by Theodore Levitt in 1960 * in relation to the need to focus the resources of the companies to cover the needs of the customers instead of the own products or services that the entities produce with the last purpose of not having to retire to Medium term market.
Note*. The article was “Marketing Myopia” and was published in the Harvard Business Review, of which he was later director between 1985 and 1990. As noted Theodore Levitt was responsible for the concept of “economic globalization” that I use in a study in 1983 titled “The globalization of markets”.
The myopia of marketing defends that many companies go into decline and are replaced as a consequence of not placing in the center of their business the needs of their customers with greater relevance in the design and operation of the products and services offered. Organizations focus their resources on the product or service they offer to the market (production, distribution, improvement, cost reduction, advertising, etc.) instead of focusing on studying and meeting the real needs of their customers . This situation means the failure of the management and the strategy of an organization in the recognition of the scope of its business as a consequence of not putting the focus on the benefit that the client seeks when acquiring our product or service.
Targeting organizations to the customer is a “relatively recent” concept and it is now virtually impossible to think of an entity that is not client-centric (at least verbally). However, this “paradigm” was not so clear in the early 1960s where companies, and especially large corporations, took for granted four misconceptions:
– The growth of existing enterprises was assured by a growing and prosperous population.
– The non existence of a competitive substitute for our product or service.
– The possibility of overcoming any competitor by increasing our production and lowering unit costs.
– Our ongoing research and progressive technical development will ensure our growth as a company.
Levitt considered the four previous assumptions as “myths” and argued that expanding markets mean that the managers of the organizations do not take into account different opportunities: a product or service with a certain market expands automatically and avoids the leaders of the Company to “think” how to expand the company itself.
At this point I consider relevant two of the examples that Theodore Levitt referred to:
– The first was the “descent” of the so-called railroad industry, whose main reason was the consideration of the decrease in the needs of passengers and goods when these needs had really risen being covered by competition (vehicles, planes, etc.) As a consequence of the fact that the railway industry itself “abandoned” the transport business and focused solely on the railway.
– The second example corresponds to the Hollywood studios that with the advent of television focused on the movie business instead of considering a broader approach towards the client and thinking to themselves that they were in the show business.
The Myopia of Marketing (Levitt) -II-
In both cases the entities considered that the “threats” would be overcome by focusing and improving their product or service instead of considering the new “opportunities” offered by newcomers and new customer needs. Business leaders had forgotten the big question “what business are we in?”.
Note 2 *. Let’s cite a few more recent examples: Kodak focused on its analogue reels and cameras discarding the potential of digital cameras (and the subsequent “crisis” of all camera and video manufacturers in the face of the emergence of new mobile phones), the music industry and The evolution of the internet with the change of consumer preferences.
Marketing Myopia believes that focusing business efforts solely on production (trying to cut costs) or on incremental innovation (pursuing an endless improvement of the article or service) leaves the marketing itself “abandoned”. Any business must have its beginning in the customer and its needs not with a product or service: the need to start with the needs of customers and develop the business “upside down” with the distribution or provision of service, its manufacture and / or Design and the final search for purchase items and suppliers and collaborators *.
Observation*. Beware! Just as dangerous can be to have a very small business vision as opening the focus excessively and setting up a mission