INDUSTRIAL MARKETING

CASE STUDY- “MARKETING MYOPIA”

Submitted to

Mr. Amit Shukla

Marketing and Sales department

Submitted by

Vijay Kumar Jaiswal

Roll No. -109A55

Enrol. No.-A0101909012

MARKETING MYOPIA

Myopia in medical terms means “Short Sightedness” of the eye. It’s a defect of the eye when a

person is only able to see the things which are close to him properly while the things distant to

him appears blurred to the viewer. In marketing parlance its called marketing myopia which

basically is the 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. Such self-centered firms fail to see and adjust to the rapid changes in their markets

and, despite their previous eminence, falter, fall, and disappear. Marketing myopia is a term

used in marketing as well as the title of an important marketing paper written by Theodore

Levitt.[1][2] This paper was first published in 1960 in the Harvard Business Review; a journal of

which he was an editor.

In the journal Levitt has exhorted CEOs to re-examine their corporate vision; and redefine their

markets in terms of wider perspectives. In his paper Levitt has tried to explain Marketing Myopia

through various real examples of companies who thought themselves as growing companies and

they are going to be there throughout and hence limited the existence of their companies to a

particular domain and hence had to be removed by the competitors of the industry who were

more wider in their vision and catered to the consumers not based on what they produced but

rather what the customers wanted.

Levitt tried to explain the various reasons of marketing myopia through various examples of

organization that had this defect in their vision and finally were either removed by competitors

due to stubbornness or these companies finally adapted themselves according to the change

required by the market. These could be summed up as follows:

The railroads did not stop growing because the need for passenger and freight

transportation declined. That grew. The railroads are in trouble today not because the

need was filled by others (cars, trucks, airplanes, even telephones) but because it was not

filled by the railroads themselves. They let others take customers away from them

because they assumed themselves to be in the railroad business rather than in the

transportation business. The reason they de- fined their industry incorrectly was that they

were railroad-oriented instead of transportation- oriented; they were product-oriented

instead of customer-oriented.

Hollywood barely escaped being totally ravished by television. Actually, all the

established film companies went through drastic reorganizations. Some simply

disappeared. All of them got into trouble not because of TV’s inroads but because of their

own myopia. As with the rail-roads, Hollywood defined its business incorrectly. It

thought it was in the movie business when it was actually in the entertainment business.

Hollywood scorned and rejected TV when it should have welcomed it as an opportunity

—an opportunity to expand the entertainment business. Today TV is a bigger business

than the old narrowly defined movie business ever was. Had Hollywood been customer-

oriented (providing entertainment rather than product-oriented (making movies) it would

not have gone through the fiscal purgatory that it did. What ultimately saved Hollywood

and accounted for its resurgence was the wave of ne young writers, producers, and

directors whose previous successes in television had decimated the old movie companies

and toppled the big movie moguls.

SHADOW OF OBSOLESCENCE:

Any company which thinks that its products and its company is eternal is really taking the wrong

track in the field of business. There are always substitutes of any product in the market. If its not

today it would definitely come because this is how companies enter in the market. This is why

various companies toppled form the position where they actually were. Things which appear

today as marvelous invention would become an obsolete thing tomorrow. Take the example of

landline phones. It was a marvelous invention of its time but now it’s obsolete because of the

discovery of mobile phones. Kerosene light was a very good discovery but with the discovery of

electric bulb by Thomas Edison it is no more in use these days or is only used in places where

electricity is out of reach. Thus the writer has tried to convey the message to everyone that the

world is dynamic and one should not sit idle after discovering or inventing anything rather the

research should be always on to maintain relevance with the dynamic world and its ever

changing need. Change is inevitable and never permanent.

POPULATION MYTH AND MASS PRODUCTION:

The belief that profits are assured by an expanding and more affluent population is dear to the

heart of every industry. If consumers are multiplying and also buying more of a company’s

product or service, the company can face the future with considerably more comfort than if the

market is shrinking. An expanding market keeps the manufacturer from having to think very

hard or imaginatively. Further if one’s business is expanding and working effectively than it does

not mean that the company should stop thinking rather the company should always try to ignite

more minds for creativity. This could be explained by the study of the petroleum industry. The

petroleum industry is pretty much persuaded that there is no competitive substitute for its major

product, gasoline—or if there is, that it will continue to be a derivative of crude oil, such as

diesel fuel or kerosene jet fuel. Though at the onset when petroleum was discovered as a

substitute to other power resources there were various consumers for it but the companies

producing petrol got relaxed with successful mass production. Then came the pipeline

technology and now petroleum is no more only for running motors it is processed and used for

flying jet planes and fighter planes. Thus all those companies who were satisfied with only

producing petrol and not entering into domain got wiped out of the people. The need of the

market is very dynamic and hence change is indispensable.

Hence even if the population keeps on expanding the creativity of any company should have

parlance and relevance with the dynamic world. The point of all this is that there is no guarantee

product obsolescence. If a company’s own research does not make it obsolete, another’s will.

Unless an industry is especially lucky, as oil has been until now, it can easily go down in a sea of

red figures—just as the railroads have, as the buggy whip manufacturers have, as the corner

grocery chains have, as most of the big movie companies have, and 1indeed as many other

industries have.

PRODUCTION PRESSURE AND PROVINCIALISM:

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. The

profit possibilities look spectacular. All effort focuses on production. The result is that marketing

gets neglected. Mass production does indeed generate great pressure to “move” the product. But

what usually gets emphasized is selling, not marketing. Marketing, being a more sophisticated

and complex process gets ignored. Ford was both the most brilliant and the most senseless

marketer in American history. He was senseless be- cause he refused to give the customer

anything but a black car. He was brilliant because he fashioned a production system designed to

fit market needs. We habitually celebrate him for the wrong reason, his production genius. His

real genius was marketing. We think he was able to cut his selling price and therefore sell

millions of $500 cars because his invention of the assembly line had reduced the costs.

Actually he invented the assembly line because he had concluded that at $500 he could sell

millions of cars. Mass production was the result, not the cause, of his low prices.

The tantalizing profit possibilities of low unit production costs may be the most seriously self-

deceiving attitude that can afflict a company, particularly a “growth” company where an

apparently assured expansion of demand already tends to undermine a proper concern for the

importance of marketing and the customer. Several examples could be taken in this context.

Companies have now come up with cars that run on batteries rather on gasoline. Hybrid cars

have come which runs on two different forms of energy resources. Solar energy is creating a

great hap in the market and is surely going to be the energy resource of future generations to

come. With its entry in the market all the cars who now boast on producing motors which gulp

oil and run like cheetah would surely become obsolete then.

CREATIVE DESTRUCTION AND DANGERS OF R&D IN CONTRIBUTION TO

MARKETING MYOPIA:

It can be shown that motorists strongly dislike the bother, delay, and experience of buying

gasoline. People actually do not buy gasoline. They cannot see it, taste it, feel it, appreciate it, or

really test it. What they buy is the right to continue driving their cars. The gas station is like a tax

collector to whom people are compelled to pay a periodic toll as the price of using their cars.

This makes the gas station a basically unpopular institution. To reduce its unpopularity

completely means eliminating it. Nobody likes a tax collector, not even a pleasantly cheerful

one. Hence, companies that are working on exotic fuel substitutes which will eliminate the need

for frequent refueling are heading directly into the outstretched arms of the irritated motorist.

Once the petroleum companies recognize the customer-satisfying logic of what another power

system can do, they will see that they have no more choice about working on an efficient, long-

lasting fuel. . For their own good the oil firms will have to destroy their own highly profitable

assets. No amount of wishful thinking can save them from the necessity of engaging in this form

of “creative destruction.”

Another big danger to a firm’s continued growth arises when top management is wholly

transfixed by the profit possibilities of technical research and development. In the case of

electronics, the greatest danger which faces the glamorous new companies in this field is not that

they do not pay enough attention to research and development, but that they pay too much

attention to it. Because electronic products are highly complex and sophisticated, managements

become top heavy with engineers and scientists. This creates a selective bias in favor of research

and production at the expense of marketing. Consumers are unpredictable, varied, fickle, stupid,

shortsighted, stubborn, and generally bothersome. The companies are in the felicitous position of

having to fill, not find, markets; of not having to discover what the customer needs and wants but

of having the customer voluntarily come forward with specific new product demands. If a team

of consultants had been assigned specifically to design a business situation calculated to prevent

the emergence and development of a customer-oriented marketing viewpoint, it could not have

produced anything better than the conditions just described.

CONCLUSION:

Thus finally after going through the case study we can conclude that all marketers and sellers

should try to look beyond the product and features. The marketers should not be so much taken

with their products that they focus only on existing wants and lose sight of underlying customer

needs. A product is only a tool to solve a consumer problem which may change according to the

changes in the world. A need is never constant and it keeps on changing. Say for example a

manufacturer of quarter inch drill bits may think that the customer needs a drill bit. But what the

customer really needs a quarter inch hole. These sellers will have trouble if a new product comes

along that serves the customer’s need better or less expensively. The customer will have the

same need but want the new product. Further marketers keep on doing research which is more

technical in nature and always are in a race to differentiate their products from their competitors.

If the marketer feels that whatever he has created is really different from the marketer and stops

thinking creatively then the competitor will some other day come out with a new product better

and economical than his. What is a point of difference today would turn out to be a point of

parity tomorrow.

Smart marketers look beyond the attributes of the products and services they sell. By

orchestrating several services and products, they create brand experiences for consumers. For

example, Disney World is an experience; so is a ride on a Harley- Davidson motorcycle. We

don’t just watch a NASCAR race rather we immerse ourselves in the NASCAR experience.

Further marketers must always try to have a broader vision so that they have a broader scope to

expand in future. Say for example Brittania in India used to manufacture biscuits but now it

defines itself as a complete health product. It says “Eat Healthy, Think Better”. Thus tomorrow it

can easily manufacture any health product. That is what each and every company which is

prudent enough is doing and trying to cure its myopia by thinking creatively and continuously

improving to survive in this dynamic and insecure world.

References:

1. Philip Kotler and Gary Armstrong, “ Principles of Marketing.”

2. http://www.casadogalo.com/marketingmyopia.pdf .

3. http://en.wikipedia.org/wiki/Marketing_myopia .

4. http://www.businessdictionary.com/definition/marketing-myopia.html .