Sunday, April 22, 2012

Marketing Myopia

Marketing Myopia is a short-sighted and inward looking approach to marketing that focuses on the needs of the company instead of defining the company and its products in terms of the customers' needs and wants. It results in the failure to see and adjust to the rapid changes in their markets. The concept of marketing myopia was discussed in an article titled 'Marketing Myopia' by Havard Business School emeritus professor of Marketing Theodore C. Levitt, who suggests that companies get trapped in this situation because they omit to ask the vital question, "What business are we in?"


1) Fateful purposes - The failure of an organization is due to the failure of management. Some industries have been and are endangering their futures by improperly defining their purposes. Customer-oriented management keep a growth industry growing, even after the obvious opportunities have been exhausted.

An example is railroads. Railroads are failing because they assumed themselves in the railroad business instead of the transportation business. They defined their industry incorrectly with railroad oriented instead of transportation oriented; and product oriented instead of customer oriented. They should be constantly watchful for opportunities to the creation of customer-satisfying needs that accounts for their prodigious output of successful services. Marketing myopia defines an industry or a product or a cluster senescence. When we mention railroads, we mean transportation. As transporters, the railroads still have a good chance for very considerable growth. They are not limited to the railroads business. The railroads is lack of managerial imaginativeness and audacity that made them successful.

2) Shadow of Obsolescence - The myopia culture 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 customers want. In many cases, industry's assumed strength lay in the apparently unchallenged superiority of its product. There appeared to be no effective substitute for it. Yet one after another of these celebrated industries has come under a shadow.

An example is grocery stores. Corner stores were substituted by supermarkets. The big food chains were narrowly escaped being completely wiped out by the aggressive expansion of independent supermarkets. In truth, there is no such thing as a growth industry. There are only companies organized and operated to create and capitalize on growth opportunities. Industries that assumed themselves to be riding some automatic growth excalator invariably descend into stagnation. The history of every dead and dying 'growth' industry shows a self-deceiving cycle of bountiful expansion and undetected decay.

3) Population Myth - The belief that profits are assured by an expanding and more affluent population is dear to the heart of every industry. An expanding market keeps the manufacturer from having to think very hard or imaginatively. If thinking is an intellectual response to a problem, then the absence of a problem leads to the absence of thinking.

Industries have believed very strongly in the beneficial consequences of an expanding population. One assumes that sales are tied to the country's population strings, because the customer can compare products only on a feature-by-feature basis. The oil companies redefined their business as energy rather than just petroleum. By constrast, when the Royal Dutch Shell embarked upon an investment program in nuclear power, it failed to demonstrate a more circumspect regard for their industry.

4) Production Pressures - Mass production industries are impelled by a great drive to produce all they can. The prospect of steeply declining unit costs as output rises is more than most companies can usually resist. A truly marketing-minded firm tries to create value-satisfying goods and services that consumers will want to buy. What it offers for sale is determined not by the seller but by the buyer.

The tantalizing profit possibilities of low unit production costs are self-deceiving attitude that can afflict a company and undermine a proper concern for the importance of marketing and the customer. The product fails to adapt to the constantly changing patterns of consumer needs and tastes, to new and modified marketing institutions and practices, or to product developments in competing or complementary industries.

5) Dangers of Research & Development - Another danger to a company's continued growth arises when top management is transfixed by the profit possibilities of technical research and development. Companies tend to pay too much attention to research and development. They are growing under conditions that come dangerously close to create illusion that the superior product itself will sell. Management continues to be oriented towards the product rather than the consumers.

Own examples:

Successful example: Coca Cola is a good example of which marketing and management myopia is absent. Coca Cola's diversification into the bottled water market helped the company to survive.

Coca Cola was once suffering on marketing myopia as the company was too internally focused and not focused enough on the changes taking place with their consumers and customers. They were too busy looking at the dashboard and were not sufficiently paying attention to the world outside. They then became customer-oriented instead of product-oriented.

Failure example: Kodak film company is a great example in which marketing myopia was present. Kodak did not view Sony, an electronics company, as a potential competitor. Instead of marketing the new technology, the company kept it under wraps for fear of hurting its lucrative film business.

Kodak had the myopic view that the company was in the film business rather than the story telling business. We aren’t buying cameras and film as much as we are buying a record of our memories. We want to be able to tell our stories for years and want the quickest, easiest tool to do so. Kodak fell prey to Marketing Myopia by not understanding what their customers were really buying and not knowing what business the company was actually in.


The consequences of marketing myopia is a diminished customer relationship resulting in poorer results in advertising messages and sales processes. It is resulted due to lack of proper management. A marketing myopia leads a company to diminish from this competitive corporate world. Companies affliated with marketing myopia lack vision and impose strategic limitations on themselves. Most companies concentrated on benefits and not customers. There are and always will have substitutes in every industry. Sometime high volume, low costs, may not always mean long term profits.

Big Idea:

The concept of marketing myopia is based on the fact that, since a specific product or service does not meet a consumer's specific need, there would be no reason for the consumer to buy it. Many businesses fail to understand that they do not sell products or services that consumers would buy entirely arbitrarily without any previous reasoning, as the latter always seek to satisfy their needs and wants. For those businesses to return to the path of successful and profitable operation, they need to realise that in order to avoid marketing myopia, they have to adopt a demand and consumer-driven marketing approach. In the fast paced and continuously evolving environment, consumers seek instant gratification. The companies have to evolve and accomodate consumer needs in order to survive.

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