“Marketing Myopia” is a popular Harvard Business Review article by Theodore Levitt in 1960. It is one of the most effective articles that has contributed to an entire paradigm shift in the business world by inviting them to look at their industries from a broader, external angle. This article presents my review of this great piece of management literature.
Why Do Businesses Exist?
Every year there are thousands of new businesses, consumer products, and services are launched. While most of them fail, some succeed. Is there a specific reason for this failure experienced by the majority?
While there can be multiple contextual reasons, one common is the shortsighted focus which, according to Levitt, is ‘myopia’ suffered by many business industries. Business leaders falsely believe that their goal is to sell and generate profits. However, Levitt argues that businesses should see beyond that to capture real customer needs, which then should be satisfied through their products or services. This is a new shift in thought process to look at a business as a structured, organized operation that fulfils customer needs than a traditional operation that tries to sell and generate profit.
The Real-Life Examples
Levitt uses a few industrial examples to elaborate his argument. The railroad industry, which suffered from this myopic leadership, failed to see beyond being in the ‘railroad business.’ As a result, they let external parties steal their customers. More importantly, they were in a delusional mindset that they were in a growth industry, although the industry was dying due to a lack of focus to recognize and capitalize on new opportunities. Another example is Hollywood’s failure to see TV as an opportunity because of their misbelief in being in the movie business rather than the entertainment business.
Levitt also focused on the oil industry, which narrowly defined its product as ‘gasoline’ and kept improving its superiority. Too much trust in the product, misbelief that it is not replaceable, and failure to recognize and innovatively capitalize on opportunities led the industry to decline its growth. It is fascinating how Levitt has pointed out the need for business leaders to have ‘managerial imaginativeness’ to create their own luck as a growth industry.
He also points out the importance of R&D for the success of a business. However, most companies do research for the wrong reason. Levitt emphasizes that the research should be done to identify market patterns and upcoming opportunities to utilize core competencies as customer-satisfying products or services.
The Present Situation and The Cure
Levitt had defined a timeless theory. Even in the modern day, after four decades, many businesses suffer from marketing myopia. Blockbuster failed to understand that the customers were buying entertainment experiences, not just movies. They let Netflix steal their customers. On the positive side, Uber, as a taxi service, also captured the opportunity to become a food delivery service. This was clearly the leadership seeing beyond selling and capitalizing on new opportunities. Avoiding myopia.
It is fascinating to predict what Sri Lanka railway could do if they start believing to be in the transportation business. That will drastically transform the experience of a tourist who travels from Colombo to Ella by train. If certain state-owned enterprises start to believe in being in the service business, they will do wonders for the country. The services will become efficient, digitalize, and faster. If our tourism industry could be more customer-oriented than trying to sell our ‘product’ (the natural beauty of the country), Sri Lanka would have been able to come up with various innovative ideas like educational tourism, health tourism, and various other customer satisfying opportunities.
A Final Word
It is important to understand that a business’s goal is to satisfy customer needs, and its existing product will someday be replaced with a competitive alternative. This realization is the cure for marketing myopia and those who find solutions by acting according to this realization will become real growth industries.