Marketing Myopia Revisited

When Harvard Business School academic and marketing king Theodore Levitt wrote Marketing Myopia back in 1960, there was a significant shift in the marketing landscape. The article was considered to be the turning point in the acceptance and respectability of marketing. We find out if the classic marketing read is just as applicable today, as it was almost 50 years ago.

Marketing Myopia was as much about strategy as it was about marketing, but it introduced the influential notion that businesses will perform better in the end if they focus on meeting customers’ needs instead of concentrating primarily on selling products. Levitt argued that businesses paid too much attention on producing their products and too little attention on satisfying their customers.

Notably, he introduced the famous question of “what business are you really in?” by pointing out that those in the train business had lost out to the businesses of planes and motor cars because they thought they were only in the business of running trains, rather than that of providing customers with transport.

“Railroad companies thought they were in the business of making trains. They invested heavily in developing a faster, more powerful and more comfortable product for their market. But people don’t wake up in the morning saying, ‘I want to ride a train today’. Rather, they say, ‘I need to travel across the country today’. Thus, the railroad companies were not in the business of making trains; they were in the transportation business,” Levitt wrote.

Levitt explained that it was the myopic perspective that has prevented the rail companies from seeing how cars and other methods of transportation had presented opportunities for the industry, and not just competition. Levitt argued that if those in the railroad business had adopted the perspective of being in the transportation business, had open minds and embraced the opportunities, the industry would have continued to grow and there would be a good chance that many would still exist today.

Learning from this lesson requires us to evaluate the example in our own current business context. It requires us to truly understand our target market and ask ourselves what they really need? Does our market really need a faster, more reliable product or service with additional features? Or would it be better to find an entirely different product or service to satisfy their real need? This, of course, will depend on understanding the current needs of the marketplace.

The reality is, in tough times consumers want greater value. With a global crisis, market volatility and nervous consumers with little confidence on our hands, we could potentially be entering a period where materialism and consumerism will be avoided. Instead of just going out and buying whatever they want, consumers are more sensitive and will compare prices and seek more value now.
 
Social researcher Hugh Mackay told AdNews last year that he thought an anti-materialism attitude had been brewing for the last couple of years.

“Consumers will be more cautious and values driven than value-driven,” Hugh said.

Hugh, who recently celebrated 30 years of publishing the Ipsos Mackay Report said the current climate was a tough time for marketers.

The Seed managing director Sean Adams was another researcher who had picked up on the fact that Australian customers were seeking more meaning. He also told AdNews, who are keen observers of the marketing and advertising industry, that we could expect to see a shift in people’s priorities.

“It will be less about keeping up with the Joneses’ and more about ‘leading a fuller life than the Joneses’. It will be less about buying things to make you look good and more about buying things to make you feel good,” he said.

So what does the changing consumer mood mean for businesses and what advice is available?  

Chilli strategic marketing planner Carlee Driscoll said her advice for businesses in a world of post-materialist consumption, was to make your best offering easy and obvious to find.

“In these times where companies and their consumers are looking to tighten their belts, smart businesses are focusing clearly on niche products or services that will genuinely deliver revenue and prospects for them,” Carlee said.

“By understanding what you need to deliver for your business, you can focus on the product or service that delivers most,” she said.

Your unique selling position could be the product (or service) that drives the most revenue for you, the product that you are 'famous' for, the product that your ideal clients can afford, or the product that offers you the best opportunities to up-sell.
 
“For example you may be an accountant that services both the domestic and commercial markets. If your best revenue comes from your 'business strategy' work as opposed to 'annual tax returns', then wouldn't you spend most of your time and effort marketing and promoting your 'business strategy' line of work?” Carlee said.
 
“A slightly different and effective approach is to market the niche product or service that gets people through the door with a view that you will then up-sell them to your more lucrative products. That same accountant may find that offering monthly BAS services for medium size businesses is an ideal marketable entry point,” she said.
 
Carlee pointed out that this does not mean ignoring the rest of the products and services your business offers.
“By all means, your business should still be offering the full gamut of your products and services but this is about what you focus your time, money and energy on promoting. You can still service all the other inquiries but if they are not your core focus it may be uneconomical to devote significant marketing dollars in these areas,” she said.

Historically through the boom, large amounts of marketing spend could be afforded on broad, mass markets and multiple products and services, but stretching your marketing dollars in tight times may simply dilute the overall effect.

“It is unlikely that you can attract and please all people with all needs all of the time, so why spend marketing dollars trying to,” Carlee said. “Focus your budget on a specific market, allowing you to market with a greater frequency across a fuller media mix.”
 
Marketing Without Money authors John Lyons and Edward de Bono have also written about the importance of creating focused value in business, and understanding their influence on human behaviour.
In order to focus on understanding values, the authors claimed it was necessary to properly understand the four value drivers including convenience, quality of life, distraction and self importance values.

“The saying ‘you can’t please all the people all the time’ is true in business as it is in personal life. The goal may be to please some of the people all of the time. But the reality for most businesses is to please some of the people some of the time,” they wrote.

“The question arises: ‘For whom are we creating outstanding value?’ If we try to be all things to all people, we may be successful short term but soon we will be undermined by competition.”

During this period, which will undoubtedly affect customers’ purchase behavior and preferences, it will be wise to offer a variety of choices for those customers who want it but for the rest, it will be about making your best key product or service easy to find.

While business growth may be temporarily threatened, slowed, or stopped, there may be underlying profitable opportunities for those businesses that are customer-oriented instead of product-oriented. However, identifying those opportunities may just require a small step back to lose the myopia and gain a more objective perspective.

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