Presentation on theme: "Marketing Myopia Levitt, Theodore (1975), “Marketing Myopia,” Harvard Business Review, September- October, 26-44,173-183. Originally this article was written."— Presentation transcript:
1 Marketing MyopiaLevitt, Theodore (1975), “Marketing Myopia,” Harvard Business Review, September-October, 26-44,Originally this article was written in 1960, HBR reprinted it in 1975 with updated comments of Levitt, useD the updated article.
2 Theodore Levitt ( )PROFESSOR AT HARVARD BUSINESS SCHOOL AND EDITOR OF THE “HARVARD BUSINESS REVIEW”DEAN OF MARKETING, KNOWN FOR HIS CONTRIBUTION IN MARKETING. THE JOURNEY MAY HAVE STARTED WITH “MARKETING MYOPIA” IN HARVARD BUSINESS REVIEW IN 1960 WHEN HE WAS A LECTURER AT HARVARDPOPULARIZED THE TERM OF GLOBALIZATION WITH HIS ARTICLE “GLOBALIZATION OF MARKETS” IN 1968AWARDS INCLUDE MCKINSEY AWARDS FOR BEST ANNUAL ARTICLE AND CHARLES COOLIDGE PARLIN AWARD AS MARKETING MAN OF THE YEAR IN 1970.ONE OF THE MOST IMPORTANT FIGURES IN MARKETING AND ECONOMICS
3 Essence of the ArticleWritten in 1960, the article revolutionized the thought processes of business managers who were narrowly focused on the products they sold—they were short-sighted or myopic, as Levitt calls it.It is important to define an industry by asking a simple question—“what business are we in?To ensure growth, companies must define their business properly based on customer needs and desires. Businesses are actually customer satisfying institutions/entities.
4 Myopia my·o·pi·a /mīˈōpēə/ noun noun: myopia nearsightedness lack of imagination, foresight, or intellectual insight
5 Fateful PurposesCompanies went into decline because they did not define their industries properlyExamples of some successful and unsuccessful companies that were product-oriented and not customer-oriented are:Railroad (goods moving vs. transportation)Hollywood (movies vs. entertainment)Petroleum (oil vs. energy business)
6 Shadow of Obsolescence Threats to products within industries and remaining unprepared to the improvements cripple the presence of companiesDry cleaning: synthetic fibers and chemical were appearing, we no longer need dry cleaning.Electric utilities: solar energy, fuel cells, and other power source are threat to electric utilities.Grocery store: supermarket are doing a better job of understanding customers need than grocery stores.
8 Self-Deceiving CycleSelf-deceiving cycle occurs when companies lack the vision. Inappropriate self-assessment system leads to failure in the long run.Four conditions that guarantee the self-deceiving cycle:Belief that growth is assured by an expanding and more affluent populationBelief that there is no competitive substitute for the industry’s major product.Too much faith in mass production and in the advantages of rapidly declining unit costs as output risesPreoccupation with a product that lends itself to carefully controlled scientific experimentation, improvement and manufacturing cost reduction
9 Population Myth Assured profits based on expanding population Increasing purchases?Market growth based on this assumptionLimits imaginationabsence of problemabsence of thinking
10 Production Pressure Mass Production Drive to PRODUCE!!! Spectacular profit possibilitiesMarketing neglectedLag in DetroitFailed to reveal customer’s wantsProduct-orientedFordProduction geniusMarketing geniusProduct provincialism“Creative Destruction”
11 Dangers of R&D Top-heavy engineers and scientist management Bias in favor of Research and Product DevelopmentMarketing Treated as residual activityBiased towards controllable variablesConsumers are:UnpredictableVariedFickleStupidShortsightedStubbornBothersome
12 Step Child Treatment No one interested in basic human needs Questions about customers and Markets not askedMore excitement in more product then the customersArticles detailed towards production and none for marketing
13 The Beginning and End? Customer-Satisfying process viewpoint is vital Violating rules of Scientific MethodDefine the problemDevelop hypothesizes to solve the problemCustomer satisfaction not being considered as the problemSelling and Marketing are different
14 Visceral Feel of Greatness Leaders need to have vision that can produce eager followersFollowers are the customersManagement must not produce products but provide customer-creating value satisfactionsFirm must think of “buying customers”Leader must know where they are goingIf a leader goes down any road, they might as well stay at home.
15 A Few Terms Product Provincialism Step-Child Treatment Creative DestructionThe Beginning and End
16 Discussion Questions“There is no such thing as growth industry, what we have is growth opportunities”--- explain.What is “creative destruction?” How does it relate to the Strategy of a company?Ford created a car with no custom options that was only available in black, but sold for $500. Levitt calls him as “both the most brilliant and the most senseless marketer” in American History. Why? Explain.