Marketing myopia

The term "marketing myopia" was first used by Theodore C. Levitt, a professor emeritus of marketing at the Harvard Business School, in a 1960 article for the Harvard Business Review. Levitt described marketing myopia as a shortsighted approach to marketing in which businesses become complacent due to the fact that they are in a growth industry and focus solely on marketing their existing products instead of catering to their customers’ wants and needs. Levitt felt that the slowing of a company’s growth, particularly one that relies on a flagship product or line of products, is caused not by stagnation of the industry but by the complacency of the company’s management.

It is widely thought that Levitt’s article revolutionized the modern approach to marketing. Rather than using marketing as a tool to simply sell their products, Levitt exhorted companies to instead use it as an opportunity to view their products from a consumer’s point of view—that is, to first determine what the consumer needs and then focus on creating a product that will fulfill that need, rather than first creating a product and then attempting to convince the consumer that the product is what they need. This prompted many companies and CEOs to evaluate their marketing strategies and broaden the scope of how they sell and brand themselves to consumers.

Background

After the publication of Levitt’s article, the concept of marketing myopia began to take on a life of its own. It had particular impact on the oil industry, which Levitt used as a prominent example in his article. Many oil companies followed his advice to rebrand themselves as energy companies rather than just petroleum distributors, enabling them to connect with consumers’ wants and needs much better once they broadened their focus and stopped trying to define themselves purely in terms of petroleum sales.

Fundamentally, marketing myopia is the failure of a business to recognize and respond to changing conditions within its industry, such as technological innovations and market saturation. This makes overcoming marketing myopia as much about strategic business planning as it is about marketing itself. To make this point, Levitt used the example of the buggy-whip industry. When horse-drawn buggies were the preeminent mode of transportation, the buggy-whip industry thrived, with many manufactures and sellers existing solely to produce and distribute buggy whips. However, the invention of the automobile made the eventual demise of the buggy-whip industry inevitable. Levitt argued that had the industry defined itself more broadly—as part of the transportation industry, for example, or even, as he wrote, "as providing a stimulant or catalyst to an energy source"—it need not have vanished in the face of technological innovation, but could have instead adapted to produce some component just as necessary to the operation of an automobile as a buggy whip was to a horse-drawn buggy. In other words, if companies that made up the buggy-whip industry had adjusted their focus in response to changes in the market, they might have been able to survive.

Overview

One key tenet of Levitt’s theory of marketing myopia was his belief that there is no such thing as a growth industry per se. Instead, Levitt argued, there are growth opportunities, and marketing myopia is a fundamental failure to capitalize on those opportunities. He attributed the decline of former so-called growth industries to what he called a "self-deceiving cycle" and set out four conditions that typically result in businesses falling into this cycle: (1) the belief that growth is assured by an expanding and more affluent population; (2) the belief that there is no competitive substitute for the industry’s major product; (3) too much faith in mass production and the advantages of rapidly declining unit costs as output rises; and (4) preoccupation with a product that lends itself to carefully controlled scientific experimentation, improvement, and manufacturing cost reduction. According to Levitt, a company that meets these conditions is willfully failing to innovate and will ultimately be unable to adjust its marketing and business strategies to meet changes in the market, such as saturation, technological innovation, or evolution of customer wants and needs.

Some academics in the field of marketing have argued that in the modern day, the idea of marketing myopia has permeated the culture a bit too well, leading to what scholars N. Craig Smith, Minette E. Drumwright, and Mary C. Gentile have called "the new marketing myopia." In a 2010 article in the Journal of Public Policy & Marketing, they set out the three conditions that lead to this new marketing myopia: (1) a single-minded focus on the customer to the exclusion of other stakeholders; (2) an overly narrow definition of the customer and their needs; and (3) a failure to recognize the changed societal context of business that necessitates addressing multiple stakeholders. "Stakeholders" here refers to individuals who are, in some way, affected by the actions of a company, whether directly or indirectly—not just employees, investors, and customers, but also the larger community of which a company is a part. In other words, the new marketing myopia arises when a company views customers solely as consumers, with no needs or motivations beyond the material, and fails to recognize that a customer’s buying habits may be as much affected by the company’s actions with respect to the rest of society as by the product the company offers. According to Smith and colleagues, while customers should "remain a central consideration," companies must learn to take other stakeholders into account as well.

That being said, the concept of marketing myopia has irrevocably changed both marketers’ and managers’ conceptions of marketing, as well as the ways in which companies connect with their customer base. By focusing on marketing strategy and the lifetime value of customers, companies have been able to innovate and adapt the types of goods and services they offer with relative ease.

Bibliography

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