Marketing Myopia
Written by Dr.Gandham Sri Rama Krishna
Lesson
published in the edited book, 2014. “Contemporary Trends in Practices of
Marketing” published by Creative Publishing House, Bangalore. ISBN:
978-81-928453-2-6.
Marketing
Myopia means a coloured or crooked perception of marketing and a
short-sightedness about business. Excessive attention to production or the
product or selling aspects at the cost of the customer and his actual needs
creates this myopia. Lack of vision on the part of companies, particularly in
failing to spot customers’ desires through excessive product focus. The term
‘Marketing Myopia’ is to be credited to Prof. Theodore Levitt. He has
explained the disadvantages of excessive
preoccupation with the product or production or selling, ignoring the customer
in the process.
Levitt
describes eloquently the obsession with the product and the neglect of the
customer when he says: “They don’t get as excited about their customers in
their own backyard as about he oil in the distant ‘Shara Desert
Kotler and
Singh coined the term “Marketing Hyperopia” by which they mean a better vision
of distant issues than of near ones. Baughman uses the term “Marketing
Macropia” meaning an overly broad view of the industry.
The product
concept can lead to marketing myopia. Railroad management thought that
travelers wanted trains rather than transportation and overlooked the growing
competition from airlines, buses, trucks and automobiles. These organizations
too often are looking into a mirror when they should be looking out of the
window.
Fateful Purpose
Every major
industry was once a growth industry. But some that are now riding a wave of
growth enthusiasm are very much in the shadow of decline. Others which are
thought of as seasoned growth industries have stopped growing. In every case
the reason for growth getting threatened, slowed, or stopped is not because the
market is saturated. It is because there has been a failure of management.
The failure is
at the top. The executives responsible for it, in the last analysis, are those
who deal with broad aims and policies. Thus:
The railroads
did not stop growing because the need for passenger and freight transportation has
not declined. 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 defined their industry
wrong was because they were railroad-oriented instead of
transportation-oriented; they were product-oriented instead of
customer-oriented.
Today TV is a
bigger business than the old narrowly defined movie business ever was. What
ultimately saved Hollywood
and accounted for its recent resurgence was the wave of new young writers,
producers, and directors whose previous success in television had decimated the
old movie companies and toppled the big movie moguls.
Right now it may help to show what a
thoroughly customer oriented management can do to keep a growth industry
growing, even after the obvious opportunities have been exhausted. It is
constant watchfulness for opportunities to apply their technical know-how to
the creation of customer satisfying uses which accounts for their prodigious
output of successful new products. Without a very sophisticated eye on the
customer, most of their new products might have been wrong, their sales methods
useless. Aluminum has also continued to be a growth industry, which
deliberately set about creating new customer-satisfying users.
Error of Analysis
Some may argue
that it is foolish to set the railroads off against aluminum or the movies off
against glass. Are not aluminum and glass naturally so versatile that the
industries are bound to have more growth opportunities than the railroads and
movies? This view commits precisely the error. It defines an industry, or a
product, or a cluster of know-how so narrowly as to guarantee its premature
senescence. When it mentioned “railroads,” it should make sure the means of “transportation”.
As transporters, the railroads still have a good chance for very considerable
growth. They are not limited to the railroad business as such rail
transportation is potentially a much stronger transportation medium than is
generally believed.
Population Myth
The belief that
profits are assured by an expanding and more affluent population is dear to the
heart of every industry. It takes the edge off the apprehensions everybody
understandably feels about the future. If consumers are multiplying and also
buying more of service, it 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. If thinking is an intellectual
response to a problem, then the absence of a problem leads to the absence of
thinking. If the product has an automatically expanding market, then it will
not give much thought to how to expand it.
One of the most
interesting examples of this is provided by the petroleum industry. While there
are some current apprehensions about its growth rate, the industry itself tends
to be optimistic. But, it can be demonstrated that it is undergoing a
fundamental yet typical change. It is not only ceasing to be a growth industry,
but may actually be a declining one, relative to other business. Although there
is widespread awareness within 25 years the oil industry may find itself in
much the same position of retrospective glory that the railroads are now in.
Despite its pioneering work in developing and applying the present-value method
of investment evaluation, in employee relations, and in working with backward
countries, the petroleum business is a distressing example of how complacency
and wrong-headedness can stubbornly convert opportunity into near disaster.
One of the
characteristics of this and other industries that have believed very strongly
in the beneficial consequences of an expanding population, while at the same
time being industries with a generic product for which there has appeared to be
no competitive substitute, is that the individual companies have sought to
outdo their competitors by improving on what they are already doing. This makes
sense, of course, if 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. For example, that not since John D. Rockefeller sent
free kerosene lamps to China
has the oil industry done anything really outstanding to create a demand for it
product. Not even in product improvement has it showered itself with eminence.
The greatest single improvement, namely, the development of tetraethyl lead,
came from outside the industry, specifically from General Motors and DuPont.
The big contributions made by the industry itself are confined to the
technology of oil exploration, production, and refining.
Uncertain Future
Management
cannot find much consolation today in the rapidly expanding petrochemical
industry, oil - using idea that did not originate in the leading firms. The
total United States
production of petrochemicals is equivalent to about 2% (by volume) of the
demand for all petroleum products. Although the petrochemical industry is now
expected to grow by about 10% per year, this will not offset other drains on
the growth of crude oil consumption.
Furthermore,
while petrochemical products are many and growing, it is well to remember that
there are non-petroleum sources of the basic raw material, such as coal.
Besides, a lot of plastics can be produced with relatively little oil. A 50,
000 barrel per day oil refinery is not considered the absolute minimum size for
efficiency. But a 50,000 barrel-per-day chemical plant is a giant
operation.
Oil has never
been a continuously strong growth industry. It has grown by fits and starts,
always miraculously saved by innovations and developments not of its own
making. The reason it has not grown in a smooth progression is that each time
it thought it had a superior product safe from the possibility of competitive
substitutes, the product turned out to be inferior and notoriously subject to
obsolescence. Until now, gasoline (for motor fuel, anyhow) has escaped this
fate.
The point of
all this is that there is no guarantee against 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 indeed as many other industries have.
Conclusion
There is a greater scope of opportunities as
the industry changes. It trains managers to look beyond their present business
activities and think “outside the box”. One reason that short sightedness is
so common is that people feel that they cannot accurately predict the future.
It is also possible to use a whole range of business prediction techniques
presently available to estimate future circumstance as best as possible. People
who focus on marketing strategy, various predictive techniques, and the
customers lifetime value can rise above myopia to a certain extent. This can
entail the use of long-term profit objectives.
The best way
for a firm to be lucky is to make its own luck. That requires knowing what
makes a business successful. One of the greatest enemies of this knowledge is
mass production. 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 get emphasized is selling, not
marketing. Marketing, being a more sophisticated and complex process gets
ignored.
The difference
between marketing and selling is more than semantic. Selling focuses on the
needs of the seller, marketing on the needs of the buyer. Selling is
preoccupied with the seller’s need to convert his product into cash: marketing
with the idea of satisfying the needs of the customer by means of the product
and the whole cluster of things associated with creating, delivering, and
finally consuming it.
In some
industries the enticements of full mass production have been so powerful that
for many years top management in effect had told the sales departments, “You
get rid of it we’ll worry about profits”. By contrast, a truly marketing minded
firm tries to create value satisfying goods and services that consumers will
want to buy: What it offers for sale includes not only the generic product or
service, but also how it is made available to the customer, in what form, when,
under what conditions, and at what terms of trade. Most important, what if
offers for sale is determined not by the seller but by the buyer. The seller
takes his cues from the buyer in such a way that the product becomes a
consequence of the market effort, not vice-versa.
Reference
1.
Baughman.J(1974), Problems and Performance of the Role
of the Chief Executive, Graduate School of Business Administration, Harvard
University. .
2.
Henry Ford(1993), My Life and Work, Doubleday, PAGE
& Company, New York ,
PP.46-147.
3.
Jacques Barzun(1960), “Trains and the Mind of Man, “Holiday ,P.21.
4.
Kotler, Philip, Ravi
(1981), Marketing Warfare in the 1980s, Journal of Business Strategy.
5.
Levitt.T(1960), Marketing Myopia, Harvard Business
Review.
6.
M.M. Zimmerman(1995), The Super Market: A Revolution in
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7.
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