Marketing Individual Assignment 2 Kishan Jain (UM24217)

Learning Points from “Marketing Myopia” by Theodore Levitt

In Marketing Myopia, Theodore Levitt argues that businesses fail not because markets shrink or products become
obsolete but because the companies run out of vision in terms of understanding customer needs and industry definition.
He asserts that companies are too product-oriented and narrowly focused on what they make rather than the needs they
meet. The following are the key takeaways from the article: -
1. Focus on customer needs, not on products
The central argument of Levitt's premise is that companies fail simply because they remain busy with their products
instead of keeping in mind the needs of their customers. For instance, the railroad companies thought themselves to be in
the railroad business rather than the transportation business per se. Focusing merely on their product—railroads—they
paid no attention to the automobile, trucks, and airplanes which were invented. This brought them short of growth and
innovation.
Levitt endorses a customer-driven business model, where the objective of a firm is determined by its ability to meet
customer needs. Such a shift in perspective helps companies continue to remain up to date with advancing customer
demands. He uses the example of Hollywood: The film industry defined its narrow range as the "movie" business but
could not see that television was just an extension of the "entertainment" business. They only regained their footing when
they started producing for television.
2. Defining the Industry Broadly
Businesses need not define themselves in narrow terms. They must see themselves in broader terms: meeting human
needs or solving certain problems. That is, they must look at Levitt's fabled question, "What business are you really in?".
For example, if you make glass-what business are you really in? Successful companies, such as Corning Glass and
DuPont, knew this principle.
They expanded their business scope continuously so that the nature of their service matched their customers' requirements
rather than the material or product lines they began with.
3. The Evil That Mass Production Mentality Does
Levitt defines the dangers of mass production mentality where companies become very intent on efficiency and low costs
during production, losing touch with innovation as well as what the consumer is looking to say. This obsession with
production leads companies to forget marketing and customer satisfaction; both of which are best suited for long-term
growth. For instance, the US automobile industry focused on mass-producing large cars but missed the growing demand
among its customers for smaller fuel-efficient models.
By doing this, its foreign competitors who were better at meeting the needs the US auto firms could not capture built huge
market shares.
Ford is an instance of a paradox. While Henry Ford's mass production transformed the car business, his infatuation with
producing only the Model T in black proved to be a failure because it could not cater to the diverse needs of the
customers. Being very successful in manufacturing efficiency first achieved great acceptance, but a narrow focus on
products eventually backfired. According to Levitt, mass production should follow customer demand rather than lead it.
4. The Dangers of Complacency
According to Levitt, the greatest threat to sustained growth is complacency. The firms believe that if they continue to
serve an expanding population or improve their product slightly, then the firm will prosper. However, as Levitt illustrates,
it is not so. Growth is much less likely to happen where there is growth in the market or where there is trust in a better
product. On the other hand, an enterprise must innovate continuously and is forced to do so by changing customer needs
and wants and behaviour.
For example, the oil industry, having existed for decades without failure, is set to become obsolete as there is too much
dependency on oil and not an aggressive pursuit of alternative sources of energy. According to Levitt, industries such as
oil cannot see new technologies or changes in consumer preferences. In case the industry continues to define itself
narrowly as providing oil but not broadly as fulfilling the needs for energy, it will be overtaken by innovations that
include electric vehicles and other renewable sources of energy.
5. Innovation and Flexibility as an importance
He drives home the point of continuous innovation. The firm must always be searching for ways to serve their customer,
no matter how that may be in terms of the innovator's making his own products obsolete. He points out DuPont and
Corning Glass as examples of firms that have done so well by continually adapting to customers' needs even after their
original lines were no longer very relevant.
Other companies will cease to exist or will die if they do not innovate. For example, Levitt talks about the dry-cleaning
industry, which declined as the use of synthetic fibres reduced the need for that kind of cleaning. Dry cleaner companies
could not hold on to growth without innovation or a more expansive view of their service in garment care.
6. Management's Role in Fostering a Growth-Oriented Culture
According to Levitt, leadership is another motivating inspiration that leads the company in the right direction; it focuses
the company on the customer rather than a narrow product-cantered perspective. There is a desire for change and
alteration at the top level of management, and a leader should be able to introduce and establish a culture that makes
customer satisfaction and responsiveness the preferred priorities over efficiency returns or even the perfectness of
product.
Theodore Levitt reminds business businesses of a timeless lesson in strategic thinking, out of short-term vision and
product obsession in Marketing Myopia. Here, he challenges the business to rethink its purpose, expand its definition of
success, and continually transform to meet the needs of customers. His call for broader industry definitions, continual
innovation, and management leadership continues to resound through modern business strategies today.