Marketing myopia
Encyclopedia
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 first published in 1960 in the Harvard Business Review
; a journal of which he was an editor. Simply Marketing myopia refers " focusing products rather than customer ".
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 your 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
; although Royal Dutch 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 (sometimes at the risk of sacrificing short term objectives).
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
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
as well as the title of an important marketing paper written by Theodore Levitt
Theodore Levitt
Theodore Levitt was an American economist and professor at Harvard Business School. He was also editor of the Harvard Business Review and an editor who was especially noted for increasing the Review's circulation and for popularizing the term globalization...
. This paper was first published in 1960 in the Harvard Business Review
Harvard Business Review
Harvard Business Review is a general management magazine published since 1922 by Harvard Business School Publishing, owned by the Harvard Business School. A monthly research-based magazine written for business practitioners, it claims a high ranking business readership among academics, executives,...
; a journal of which he was an editor. Simply Marketing myopia refers " focusing products rather than customer ".
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 your 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
Energy industry
The energy industry is the totality of all of the industries involved in the production and sale of energy, including fuel extraction, manufacturing, refining and distribution...
rather than just petroleum
Petroleum industry
The petroleum industry includes the global processes of exploration, extraction, refining, transporting , and marketing petroleum products. The largest volume products of the industry are fuel oil and gasoline...
; although Royal Dutch Shell
Royal Dutch Shell
Royal Dutch Shell plc , commonly known as Shell, is a global oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the fifth-largest company in the world according to a composite measure by Forbes magazine and one of the six...
, which embarked upon an investment program in nuclear power
Nuclear power
Nuclear power is the use of sustained nuclear fission to generate heat and electricity. Nuclear power plants provide about 6% of the world's energy and 13–14% of the world's electricity, with the U.S., France, and Japan together accounting for about 50% of nuclear generated electricity...
, 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"
Thinking outside the box
Thinking outside the box is to think differently, unconventionally, or from a new perspective. This phrase often refers to novel or creative thinking....
. 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
Customer lifetime value
-Definition of Customer Lifetime Value:In marketing, customer lifetime value , lifetime customer value , or lifetime value is the net present value of the cash flows attributed to the relationship with a customer...
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
At some point in its development, every industry can be considered a growth industry, based on the apparent superiority of its product. But in case after case, industries have fallen under the shadow of mismanagement. What usually gets emphasized is selling, not marketing. This is a mistake, because selling focuses on the needs of the seller, whereas marketing concentrates on the needs of the buyer. In this widely quoted and anthologized article, first published in 1960, Theodore Levitt argues that "the history of every dead and dying 'growth' industry shows a self-deceiving cycle of bountiful expansion and undetected decay." But, as he illustrates, memories are short. The railroads serve as an example of an industry whose failure to grow is due to a limited market view. Those behind the railroads are in trouble not because the need for passenger transportation has declined or even because cars, airplanes, and other modes of transport have filled that need. 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. Baughman (1974) uses the term marketing macropia meaning an overly broad view of your industry.