Martinez, Richard Ron Z.
Based on my understanding marketing myopia is a term used in marketing as well as the title of an important marketing paper written by Theodore Levitt. This paper was published in the Harvard Business Review a journal of which he was an editor. 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; although Shell, which embarked upon an investment program in nuclear power, subsequently regretted this course of action. 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) claims that 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.
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. Others have developed similar terms. Kotler and Singh (1981) coined the term marketing hyperopia, by which they mean a better vision of distant issues than of near ones. Baughman (1974) uses the term “marketing macropia” meaning an overly broad view of your industry.
Marketing Myopia is the failure to define an organization’s purpose in terms of its function from the consumers’ point of view. For example, railway companies that define their markets in terms of trains, rather than transportation, fail to recognize the challenge of competition from cars, airlines, and buses. It is therefore necessary to define the needs of the consumer in more general terms rather than product-specific terms.
Marketing Myopia was a seminal, epoch-making article written by Theodore Levitt; originally printed in the Harvard Business Review (HBR). At the time of the publication of this article, Theodore Levitt was a lecturer in Business Administration at the Harvard Business School; now, he is a full-fledged professor. The Harvard Business Review has sold more than half a million reprints of this article and each reprint has no doubt been copied several times over.
Indeed, there must be very few students in Philippines who have not read this article which is about how a company can ensure its continued growth. To quote from the summary of this article, (as published, in the HBR) Marketing Myopia answered that question in a new challenging way by urging organizations to define their industries broadly to take advantage of growth opportunities. Using the archetype of the railroads, Levitt showed how they declined inevitably as technology advanced because they defined themselves too narrowly. To continue growing, companies must ascertain and act on their customers’ needs and desires, and not bank on the presumptive longevity of their products.
Even more dramatic is the first paragraph of this seminal article which reads: Every major industry was once a growth industry. But some that are now riding a wave of growth enthusiasm are very much in the shadow of decline. Others which are thought of as seasoned growth industries have actually stopped growing. In every case the reason for growth is threatened, slowed, or stopped is not because the market is saturated; it is because there has been a failure of management.”
Marketing myopia is true for all companies who define their markets too narrowly, including companies in India, who have defined markets in the ’60s and ’70s on the basis of licensing production. Experience shows that when a business has redefined its market, it has continued to grow as new targets are set. Perhaps the best example is the recent one, where categories such as telephones, television, wireless communication, cable television service providers, Internet, DTH and film producers have all converged into a single category known as ICE, which is a combination of information, communication and entertainment categories.
The same is true of brands. Companies which segment a market using their own yardsticks or price as a parameter, instead of defining markets from the consumers’ point of view, often suffer from a similar myopia. This results in the brand not being able to exploit its full opportunity; and even prevents the brand from cracking open a whole new market.
Take the detergents market, for example. It was myopia which prevented some of the largest companies in the country such as Hindustan Lever and Tata from developing a detergent powder which could convert the laundry soap user. The preferred route, instead, was a detergent bar. While this was indeed a good strategy. Time and again, one finds that the manufacturer tends to segment the market when the consumers perceives the market to be much larger.
Let us return to Theodore Levitt and his seminal article. When writing a retrospective commentary of his article, he mentions that his original concept was often misunderstood. It is worth quoting Theodore Levitt in full. Not everything has been rosy. A lot of bizarre things have happened as a result of the article:
Some companies have developed, what I call marketing mania, they’ve become obsessively responsive to every fleeting whim of the customer. Mass production operations have been converted to approximations of job shops, with cost and price consequences far exceeding the willingness of customers to buy the product.
Management has expanded product lines and added new lines of business without first establishing adequate control systems to run more complex operations.
Marketing staffs have suddenly and rapidly expanded themselves and their research budgets without either getting sufficient prior organizational support or, thereafter, producing sufficient results.
Companies that are functionally organized have converted to product, brand or market-based organizations with the expectation of instant and miraculous results. The outcome has been ambiguity, frustration, confusion, corporate infighting, losses, and finally a reversion to functional arrangements that only worsened the situation.
Companies have attempted to serve customers by creating complex and beautiful efficient products or services, that buyers are either too risk-averse to adopt, or incapable of learning how to employ. In effect, there are now stream shovels for people who haven’t yet learnt to use spades. This problem has happened repeatedly in the so-called service industries (financial services, insurance, computer-based services) and with American companies selling in less developed economies.
Marketing Myopia was not intended as analysis or even prescription; it was intended as manifesto. It did not pretend to take a balanced position. This means that too much of a good thing can be a bad thing. Marketing myopia does not prescribe being myopic about marketing.