A Refresher on Marketing Myopia

Here is an excerpt from an article written by Amy Gallo for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.

Illustration Credit: Paul Garrett

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Every year, a large majority of product launches fail. There’s debate about exactly what percentage—some say it is 75%, others claim it’s closer to 95%. Regardless of which number is right, there is no doubt that a lot of time and energy go into marketing products that will no longer exist in a year. Why is this? Some of the failure is likely attributable to the fact that many company leaders, including executives, have what’s called marketing myopia—a nearsighted focus on selling products and services, rather than seeing the “big picture” of what consumers really want.

I talked with John Deighton, a professor at Harvard Business School and an authority on consumer behavior and marketing, to better understand this classic concept, its origins, and its relevance to organizations today.

Where did the concept originate?

The term was coined by the late Harvard Business School marketing professor, Theodore Levitt, in a 1960 article by the same name (republished in 2004). The “heart of the article,” according to Deighton, is Levitt’s argument that companies are too focused on producing goods or services and don’t spend enough time understanding what customers want or need. Therefore, he “encouraged executives to switch from a production orientation to a consumer orientation.” As Levitt used to tell his students, “People don’t want a quarter-inch drill. They want a quarter-inch hole!”

“The genius of the original article is that it is so easy to be myopic when it comes to marketing,” says Deighton. “Any marketer is obligated to be concerned with programs, tactics, campaigns, etc. Unfortunately, the clock never stops long enough to answer the question, ‘Why are you doing what you are doing?’ So it’s far too easy to lose sight of the big picture.” The other thing that made the article so significant at the time of its publication is that it reminded CEOs that marketing is part of their job: “[Levitt] tells the leader of the organization: you are in business because you have a customer. Therefore you have to think about marketing,” Deighton explains.

What is marketing myopia?

The myopia that Levitt describes is a lack of insight into what a business is doing for its customers. Organizations invest so much time, energy, and money in what they currently do that they’re often blind to the future. They get lulled into thinking they’re in a “growth industry,” which, according to Levitt, don’t exist. Instead, there are really only companies continuously capitalizing on growth opportunities.

There are several examples in the article that illustrate the main concept, that your product is not your business. Perhaps the most famous is the railroad lines, which Levitt argues fell into steep decline because they thought they were in the train business rather than the transportation business. If those leaders had seen themselves as helping customers get from one place to another, they might’ve expanded the business into other forms of transportation like cars, trucks, or airplanes. Unfortunately, they let other companies seize those opportunities and steal away their passengers instead.

Luckily, there is a cure for marketing myopia. Levitt suggests that leaders ask themselves: “What business are we really in?” Deighton says that the best way for leaders to answer that question is by asking themselves another: “What are we really doing for the customer?” Successful companies focus on customer needs, not their own products and services, which can—and will—be replaced by competitive alternatives, either ones they make themselves or those produced by existing or potential competitors.

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Here is a direct link to the complete article.

Amy Gallo is a contributing editor at Harvard Business Review and the author of the HBR Guide to Dealing with Conflict at Work. She writes and speaks about workplace dynamics. Follow her on Twitter.

 

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