fall 2010 group 8 marketing myopia

Marketing Myopiaby Theodore LevittGroup No.8:Alex ElwoodNikolas FosterBlake OverallShaelee PittengerLorelei Wilson

What is Myopia

•Nearsightedness--not inherited. It can be prevented.

•Short sighted and inward looking approach to marketing that focuses on the needs of the firm instead of defining the firm and its products in terms of the customers' needs and wants.

• Read more: http://www.businessdictionary.com/definition/marketing-myopia.html#ixzz0yyuoieyC

Theodore Levitt

• Started a newspaper with Erma Bombeck in elementary school

• Served in World War II• After the war, Ted was a reporter and

sportswriter for the Dayton Journal Herald• Received his masters in economics from Ohio

State• Worked briefly as a consultant in the oil

industry• Began teaching at Harvard in 1959• Wrote Marketing Myopia in 1960, most

reprints of any Harvard Business Review article, 900,000

Levitt cont.• Wrote 25 articles for the Harvard Business

Review• Authored 8 books on Marketing• 1983 wrote “Globalization of Markets” – coined

the word globalization• In 1985 became the editor of the Harvard

Business Review, expanded it’s readership beyond an academic journal into a mass market management magazine

• Won many awards• “What business are you really in?” – Marketing

Myopia• Approach was not to get approval in research,

but to have “important people in important companies” (his phrase) to take his ideas and go with them

“There is no such thing as a growth industry, what we have is growth opportunities.”-Theodore Levitt

Guarantee a Self-Deceiving Cycle•Believe growth is guaranteed by an

expanding population

•Believe there is no competitive substitutes

•Have too much faith in mass production

•Preoccupation with a product: focus on product instead of customer

Assured Growth by Expansion

•Belief that increases in population and affluence ensure growth

•Lack of innovation – A common characteristic▫Companies focus on efficiency, not

innovation•Petroleum industry

▫A prime example of this fallacy▫Reinforces Levitt’s caution of myopically

defining one’s industry

No Threat of Obsolescence•The fallacy of believing competitive

substitutes don’t exist•Petroleum industry

▫A history of obsolete products due to competitive substitutes Kerosene Lamp Kerosene Space Heater

Mass Production

•Lower product’s unit costs as output increases

•Focus on production, neglect marketing

•Selling is not marketing

•Focus on company’s needs, not customer’s needs

Henry FordBrilliant Marketer Senseless Marketer

• Created a product customer’s needed

• Created a product customer’s could afford

• Created production system to fit market needs

• Refused to make cars in any other color but black

Preoccupation with Product

•Industry declines instead of growing

•Example – Oil Companies

•Survival entails change

Creative Destruction•When something new eliminates

something old•Must become innovative – reinvent

business•Must change business strategy to

survive

Marketing Myopia Today

•Airline Industry- Southwest Airlines vs. American Airlines▫- Customer satisfaction low in this industry▫- Airlines vs. Cable T.V : Tie▫- IRS ranked higher than airlines in

customer satisfaction

Marketing Myopia Today

•Technology Industry▫More focused on the customer today than

in 1960▫Apple▫E-commerce and E-Business ranked high in

customer satisfaction report

http://www.theacsi.org/images/stories/ACSI_TREE_08_10.pdf

The Pros

•Provided for new thought process

•Customer Centric

•The concept stands the test of time

•Marketing is not selling

The Cons

•Can a company realistically restructure•Can go outside the scope of bounded

rationality (lose reality)•Static not dynamic

▫Does not factor for globalization▫Ecommerce

Conclusion

•“Organizations must learn to think of itself not as producing goods or services but as buying customers, as doing the things that will make people want to do business with it.”

Theodore Levitt

Reference• Levitt, T. (1960). Marketing myopia. Harvard Business

Review, 38(4), 45-56. • Lavelle Louise (2006). Theodore Levitt Dead at 81. Business

Week. Retrieved September 10, 2010 from www.businessweek.com.

• McDermott, Anne (2010). Customer Satisfaction-Airlines Worse than IRS, Better than Facebook. FareCompare.com. Retrieved September 8, 2010 from http://www.farecompare.com/articles/airline-industry-news/customer-satisfaction-airlines-irs-facebook/

• Dictionary, (2010). Creative destruction. http://dictionary.reference.com/browse/creative+destruction

• Wikipedia, (2010). Creative destruction. http://en.wikipedia.org/wiki/Creative_destruction