The summary of “Marketing Myopia” by Theodore Levitt

The summary of “Marketing Myopia” by Theodore Levitt

 

             “Marketing Myopia” is the thesis about a way of being a continued growth industry which is suggested by Theodore Levitt.

According to Levitt, businesses falls into self-deception through 4 steps: the first step is the belief that their market will grow in succession, the second step is the belief that there is no substitute for their products, the third step is the trial to lower the cost of production by mass production, and the last step is improvement of their products and services by R&D. After these 4 steps, if businesses don’t accept customers’ demands, the most important things, it will cause the end of them. This paper shows that for the continued growth companies should grasp consumers’ needs and necessities and establish strategies through variety examples of American industries- mainly petroleum, automobiles, and electionics- in the past.

             Every major industry was once a growth industry and some of them are in the shadow of decline. The reason growth is threatened, slowed, or stopped is a failure of management. It is caused by the executives’ failure to set up business purposes, who deal with broad aims and policies. They have several things in common. First, they defined their industry incorrectly and were product-oriented instead of customer-oriented. Second, they assumed a complacent attitude toward their products and misrecognized business conditions. Third, they failed to research reveal consumer preferences and ignored the importance of marketing. All of these are the Marketing Myopia. Because of the short-sighted mindset and illusion, they were in complacency and lost the sight of what customers wanted.

For example, American railroad industries assumed themselves to be in the railroad business rather than in the transportation business and let others take customers away from them. There are other examples of industries that bring about dangers by improperly defining their purposes such as American railroad or Hollywood and losing managerial imaginativeness and audacity. On the contrary to this, E. I. DuPont de Nemours & Company and Corning Glass Works show the opportunity to continue to grow through customer-oriented management.

             Another example is the industries which came under a shadow because of the blind faith in their products. Dry cleaning becomes obsolescent by the powerful magician, ultrasonics, kerosene lights were finished when the incandescent lamp came along, and big food chains faced the emergency of being wiped out by independent supermarkets.

             All industries believe that growing population and demands assure the more benefits. Because of the belief, complacent and misunderstanding reality, they stubbornly convert opportunity into near disaster likewise the petroleum industry. It results in the ignorance of marketing and the insolence to believe there is no competitive substitute for its major products. The petroleum industry was blinded by its narrow preoccupation with a specific product and the value of its reserves via these processes and paid little or no attention to its customers’ basic needs and preferences. Finally, oil has never been a continuously strong growth industry. It has miraculously saved by innovations and developments not of its own making and its product turned out to be inferior and notoriously subject to obsolescence by the appearance of superior products.

             Selling focuses on the needs of the seller but marketing on the needs of the buyer. Mass-production industries are impelled by the prospect of steeply declining unit costs as output rises. All effort focuses on selling, not marketing, and it results in the neglect of marketing. They forget the most important, what it offers for sale is determined not by the seller but by the buyer. Lag in Detroit was product-oriented, not consumer-oriented, so it failed to research reveal consumer preferences. Additionally, Ford invented Assembly line and saved the cost of production by the mass production. However, it was the result, not the cause, of his low prices.

             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. The electronic industries pay too much attention to R&D, so they neglect marketing and the oil industries don’t research the consumers’ basic needs and treat them as stepchild. To them, the customer is regarded as just money or a target of selling products.

             It should be obvious that building an effective customer-oriented company involves far more than good intentions or promotional tricks, so the company has to adapt to the requirements of the market, and it has to do it sooner rather than later. Management must think of itself not as producing products but as providing customer-creating value satisfactions. In shot, the organization 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. And the chief executive must set the company’s style, its direction, and its goals with visceral feel of greatness.