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Marketing Myopia

• Theodore Levitt

Sustained growth depends on how broadly you define your business—and how carefully you gauge your customers’ needs.

At some point in its development, every industry can be considered a growth industry, based on the apparent superiority of its product. But in case after case, industries have fallen under the shadow of mismanagement. What usually gets emphasized is selling, not marketing. This is a mistake, since selling focuses on the needs of the seller, while marketing concentrates on the needs of the buyer.

In this widely quoted and anthologized article, first published in 1980, Theodore Levitt argues that “the history of every dead and dying ‘growth’ industry shows a self-deceiving cycle of bountiful expansion and undetected decay.” But, as he illustrates, memories are short.

The railroads serve as an example of an industry whose failure to grow is due to a limited market view. Those behind the railroads are in trouble not because the need for passenger transportation has declined or even because that need has been filled by cars, airplanes, and other modes of transport. Rather, the industry is failing because those behind it assumed they were in the railroad business rather than the transportation business. They were railroad oriented instead of transportation oriented, product oriented instead of customer oriented.

For companies to ensure continued evolution, they must define their industries broadly to take advantage of growth opportunities. They must ascertain and act on their customers’ needs and desires, not bank on the presumed longevity of their products. In short, the best way for a firm to be lucky is to make its own luck.

An organization must learn to think of itself not as producing goods or services but as doing the things that will make people want to do business with it. And in every case, the chief executive is responsible for creating an environment that reflects this mission.

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 that are thought of as seasoned growth industries have actually stopped growing. In every case, the reason growth is threatened, slowed, or stopped is not because the market is saturated. It is because there has been a failure of management.

• TL Theodore Levitt was a professor emeritus of marketing at Harvard Business School and former editor of Harvard Business Review.

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Marketing myopia

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Please note you do not have access to teaching notes, an integrated view of marketing myopia.

Journal of Consumer Marketing

ISSN : 0736-3761

Article publication date: 1 March 1992

Examines the concept of marketing myopia, its different explanations and types. Organizes the four types of marketing myopia into a classification scheme, suggesting a new perspective which can produce innovative marketing strategies. Recommends five steps towards becoming an innovative firm: a generic firm/industry view, other‐industry monitoring, benchmarking, recruitment of marketers, and a flexible approach to problems.

• Business policy
• Marketing concepts
• Marketing myopia

Richard, M.D. , Womack, J.A. and Allaway, A.W. (1992), "An Integrated View of Marketing Myopia", Journal of Consumer Marketing , Vol. 9 No. 3, pp. 65-71. https://doi.org/10.1108/07363769210035242

Copyright © 1992, MCB UP Limited

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Theodore Levitt's Marketing Myopia

• Published: February 1999
• Volume 18 , pages 397–406, ( 1999 )

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• Colin Grant 1  

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Theodore Levitt criticizes John Kenneth Galbraith's view of advertising as artificial want creation, contending that its selling focus on the product fails to appreciate the marketing focus on the consumer. But Levitt himself not only ends up endorsing selling; he fails to confront the fact that the marketing to our most pervasive needs that he advocates really represents a sophisticated form of selling. He avoids facing this by the fiction that marketing is concerned only with the material level of existence, and absolves marketing of serious involvement in the level of meaning through the relativization of all meanings as personal preferences. The irony is that this itself reflects a particular view of meaning, a modern commercial one, so that it is this vision of life that LevittÕs marketing is really SELLING.

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Grant, C. Theodore Levitt's Marketing Myopia. Journal of Business Ethics 18 , 397–406 (1999). https://doi.org/10.1023/A:1005817506423

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DOI : https://doi.org/10.1023/A:1005817506423

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Summary of Marketing Myopia with 10 Examples: Theodore Levitt’s seminal work

Marketing myopia was published in Harvard Business Review in the 1960s by German American Economist and Harvard University Professor Theodore Levitt. Levitt’s advice has been instrumental in understanding the failure of many businesses and his advice to avoid marketing myopia has been taught in almost all business schools as an elementary course to understand businesses in general. The original Classic can be found here

In his article “Marketing Myopia,” Theodore Levitt criticizes the marketing industry for its lack of strategic thinking, which he attributes to the industry’s “myopia.” As a strategy for increasing its share of the market, the company is shifting its focus from product sales to the needs of its customers. Businesses that put the needs of their customers first will be successful. It is said that management is “brand-oriented” when it places an emphasis on the target audience or demographic for the brand.

Agility and Leadership

When a company is not agile enough to adapt quickly to shifting market conditions , placing an excessive amount of emphasis on growing market share causes marketing myopia, which can prove to be fatal. Myopic marketing is a serious problem that needs to be addressed as soon as possible given the importance of advertising to the success of any company. According to Levitt’s argument, a myopic culture can be found within any organization because the delusion of progress fuels it.

Levitt contends that the inability of a company’s leadership to take responsibility for the decisions made in the formulation of the company’s strategy is the root cause of the failure of a company. Levitt supports his claim with evidence from the film industry as well as the railroad industry.

The Railroad Industry

According to Levitt, the demise of the railroad industry was not caused by a decrease in the amount of freight or passenger traffic, but rather by the inability of railroads to provide services that were tailored to the requirements of their clientele. The leadership in the railroad industry was not to blame, but they failed to recognize the potential of their industry. Individual railroads were evaluated, as opposed to the rail network as a whole being scrutinized for this study.

According to the theory of marketing myopia, a company is more likely to be successful when its products are able to satisfy the needs of its customers rather than when it focuses solely on satisfying the preferences of its customers to the greatest extent possible. A further illustration of this can be found in the Hollywood film industry; historically speaking, movies have been produced with the film market alone in mind, as opposed to as a component of a larger entertainment package.

Because Hollywood was incapable of comprehending the part it played in the entertainment industry, the television industry stepped in to fill the void left by its absence. This was accomplished by the production of niche shows aimed at particular demographics. The most important thing to take away from this is that in order to solve the issue, you need an all-encompassing approach to digital marketing rather than a specific one.

Marketing Short-sightedness

First, Levitt busts the myth about the population, and then he explains the shortsightedness of the marketing strategy . According to Levitt, it is a common misconception that an increase in the population automatically results in an increase in the demand for goods and services. There is a possibility that, for reasons that are not fully understood, there will be an uptick in interest in a product that is not normally readily available. The petroleum industry made the right choice when it decided to venture into uncharted territories. It is essential, in order to achieve sustained success, to adopt a business model that is centered on the customer and to abandon outdated marketing strategies.

When developing a new product or service, upper management should put the wishes and requirements of customers first. Levitt examines the recently established and service-oriented dry cleaning business as an illustration of the issues that can arise from ideas of obsolescence. He notes that customers want alternative options that are more suited to meet their requirements.

Levitt expands on the idea of marginalization by asserting that marketing is getting the short end of the stick due to businesses emphasizing short-term profits rather than long-term growth. They are so preoccupied with gathering data in order to boost production and sales that they have forgotten to put the requirements of their customers at the forefront of their minds. Levitt uses the petroleum industry as an illustration to illustrate his point. In this industry, production was entirely focused on exploration, but there was no marketing.

Levitt advises high-level executives not to place an excessive amount of weight on R&D’s bottom line. It is foolish to prioritize research and development over preventative safety measures. Companies are increasing the amount of money they invest in research and development in order to develop innovative products that cater more to the wants of consumers than to their requirements . Some businesses operate under the mistaken belief that the simple act of marketing their wares to end users will be sufficient to guarantee their financial success.

According to market research and Levitt’s account, the dry cleaning industry went through a period of stagnation after the introduction of new cleaning chemicals and ultrasonic devices. An increasing number of consumers are drawn to purchase enhanced goods and services, which are produced as a natural consequence of ongoing technological development. The next ten to twenty years of a company’s existence ought to be planned out with SWOT analysis as a primary consideration (SWOT).

Think and Bring Progress

The successful company will “ think and bring progress ” in order to keep its customer base, which, according to Levitt, protects the creator from having to rely on pure intuition or originality in a field that has the potential to be profitable. Illogic is unavoidable when there is no intellectual obstacle to be conquered. Although there is evidence to suggest that the market is expanding, the administration may be getting ready to scrap the logic that underpins its current strategies.

The foolish actions of industry participants contributed, at least in part, to the current state of the market. Even though the oil industry has been around the longest and has the most dependable track record, legitimate concerns have been raised as a result of its rapid expansion. There is always the possibility that the oil industry will encounter the same difficulties as the railroad industry. To put it succinctly, the primary focus of the industry has been on discovering ways to simplify the process of acquiring and producing its product for paying customers. Lamp oil and gasoline have both found widespread applications, and the petroleum industry is on the cusp of a number of fascinating new breakthroughs.

While businesses are shifting their focus toward mass production in an effort to cut costs, these same businesses are also paying close attention to the requirements of their customer base. If you reduce spending on advertising, you run the risk of missing out on opportunities to form relationships with customers and adapt to the evolving preferences of those customers over time.

Levitt, on the other hand, was certain that there was no industry growth because “ there are only organizations organized and worked to produce and market shares and profit from growth chances ” . In order for businesses to avoid falling victim to “marketing myopia,” Levitt recommends implementing the following four strategies. The first step is to adjust one’s behavior to account for emerging fashions and tastes. The second component of the organization is a group of highly-motivated and visionary leaders who are responsible for establishing the organization’s overall direction.

In conclusion, the company must exert significant effort in order to satisfy the preferences of its clientele. In the end, the company focuses on the organization’s needs to see itself in the role of a purchaser. Customers have more power than store owners do in today’s society. The book written by Levitt titled Marketing Myopia contains ideas that are similar. Now more than ever, in order for businesses to avoid having their products become obsolete, they need to concentrate their efforts not on expanding their base of customers but rather on satisfying the requirements of those customers they already have and predicting the needs they will have in the future.

In addition, Levitt explains how a company can miss out on opportunities for growth industry expansion due to the erroneous belief that increasing the number of customers it serves will automatically result in the company’s success. Levitt used the petroleum industry as an example to illustrate his point, noting that there was no competition in the market because there was no viable alternative to oil, but that there were so many refineries that they did not constitute a threat to the industry.

The Self-Deceiving Cycle

The self-deceiving cycle is comprised of four factors:

• The use of mass production and lower unit costs to boost output;
• The belief that a major product has no substitute;
• Concern over the development of a single product; and
• The growth of the population.

According to Levitt had to say about the matter, “if a rational problem response is based on thinking, then the lack of an issue prompts a lack of thinking.” If the market for your product is expanding on its own, then expanding that market probably won’t require much thought on your part. In recent decades, the role of the oil industry in driving economic expansion has played a less significant role. Given how self-assured they were about their offering, it should not come as a shock that they are part of a sector that is on the decline.

The oil industry placed a greater emphasis on achieving the highest possible level of production efficiency as opposed to improving or marketing their product. If a company’s services are solely focused on the possibility of financial gain, then creative work may be an obstacle to the company’s growth. It is detrimental to the growth of a company to place an excessive amount of emphasis on creative endeavors because this shifts resources away from serving the company’s core market and toward the development of a specialized offering for that market. Because it places more importance on the process than on the result, creativity inherently involves risk.

An overabundance of inventiveness results in a glut of products that serve no useful purpose. Levitt encourages aspiring business owners to put the satisfaction of their customers ahead of the production of their goods. Because of this, every person who is involved in the business is aware of its significance. Customers are the reason for the existence of businesses and they are the ones who define the business environment. If the products can adequately satisfy their requirements, then the sales will improve. Product sales are essential to the continued existence of a serious business owner.

The numerous examples of growth organizations and customer-focused businesses that were used to analyze the social impact of these organizations constituted the article’s strongest point. A significant deficiency in the article was that it did not provide any concrete examples. Apple and Google are two of the world’s most successful companies and serve as examples. Apple’s iPhones are designed with the product, rather than the user, as the primary focus of the company’s design decisions.

10 Marketing Myopia Examples

Marketing myopia, as proposed by Theodore Levitt, refers to the shortsightedness of companies, where they focus on selling their products or services rather than meeting the needs and desires of their customers. Here are 10 examples of marketing and myopia examples, and how Levitt’s theory can be applied to these failures. These are some of the classic marketing myopia examples. Many of them correlate to businesses not adapting to the digital age and lacking concentrated marketing efforts.

Kodak failed to adapt to the digital revolution, focusing on its traditional film products instead of understanding the growing demand for digital photography. Levitt’s theory suggests that Kodak should have paid more attention to customers’ needs for convenient and instant photos through digital cameras rather than pushing film-based cameras. This is a classic case marketing myopia examples today.

Source: Statista

Blockbuster

The company focused on its brick-and-mortar video rental stores rather than embracing the shift toward digital streaming. Levitt’s theory implies that they missed the big picture of on-demand entertainment. Blockbuster should have focused on customers’ desire for convenient and accessible home entertainment instead of relying on their physical store model.

The company focused on its signature physical keyboard and business-oriented devices, ignoring the shift towards touchscreen smartphones and app ecosystems. Levitt’s theory implies that Blackberry should have been more attentive to the growing demand for versatile, consumer-friendly devices and evolved its product line accordingly.

Toys “R” Us

The toy retailer failed to adapt to the rise of e-commerce and continued investing in large, expensive brick-and-mortar stores. According to Levitt’s theory, Toys “R” Us should have focused on customers’ desire for online shopping and convenience, adapting its business model accordingly.

Source: This Incredible Article on Failory. Do read it

Once the world’s largest vendor of mobile phones, Nokia is another example of marketing myopia. Despite having a dominant market position, they were slow to adapt to the rise of smartphones, clinging to their successful feature phone models. By the time they attempted to compete in the smartphone market, companies like Apple and Samsung were too far ahead.

At one point, Yahoo was the leader in internet search engines, but they failed to adapt to changes in the online world. While they continued focusing on becoming a media company, competitors like Google embraced the ‘search’ function and developed superior algorithms, ultimately taking over the market.

Once synonymous with photocopying, Xerox failed to anticipate the rise of a paperless world and digital documents. They held too strongly to their successful past instead of focusing on the future and fell behind companies that embraced digital documents, like Adobe.

This was one of the most successful department stores in history. However, Sears did not adapt to changing consumer behavior and trends. They were slow to acknowledge the shift to online shopping and the threat posed by companies like Amazon. Sears also did not invest adequately in the modernization of their physical stores, thus losing customers to more contemporary and shopper-friendly competitors.

Like Kodak, Polaroid suffered greatly from the rise of digital photography. They had great success with instant film cameras but failed to foresee the implications of the digital revolution, leading to bankruptcy.

A major player in the music and entertainment retail industry, HMV was slow to recognize and respond to the shift towards digital music and video. Despite the rising popularity of platforms like iTunes and Spotify, HMV continued focusing on their physical media products, leading to significant losses and ultimately bankruptcy.

Borders Books

Borders was once a leading book retailer with hundreds of stores worldwide. However, it failed to adapt to the changing landscape of the book industry. Borders outsourced their online sales to Amazon in the early 2000s, essentially handing over a key competitive advantage. They also heavily invested in CDs and DVDs just as digital media was taking off. These missteps led to declining sales and, eventually, bankruptcy in 2011.

Compaq was once a prominent name in the personal computing industry. They focused heavily on making hardware without realizing the importance and potential of software and operating systems, a gap exploited by companies like Microsoft and Apple. In sticking to their original hardware-focused strategy without adapting to changing market dynamics, Compaq lost ground to competitors, leading to their acquisition by HP in 2002.

How to avoid Marketing myopia

As businesses strive to succeed and grow, the shadow of marketing myopia looms large , threatening to derail their dreams. But fear not, for there are strategies that can help you avoid this treacherous pitfall and keep your business soaring to new heights.

Foster a customer-centric mindset: Let your heart be filled with empathy and understanding for your customers. Delve into their desires, needs, and pain points, and shape your products or services around them. Always remember that your customers are the lifeblood of your business, and without them, your endeavors will wither away.

Embrace change and innovation : Change is an unstoppable force, and the only way to thrive is to ride the waves of progress. Be brave and open-minded, always seeking new ways to evolve and adapt your offerings. By staying ahead of the curve, you’ll remain relevant and indispensable to your customers.

Keep an eye on the bigger picture : Don’t let yourself be blinded by short-term gains and immediate success. Instead, focus on the long-term vision, nourishing your business with sustainable growth strategies. By doing so, you’ll create a legacy that stands the test of time.

Encourage a culture of learning and curiosity : Feed your organization’s hunger for knowledge and discovery . Promote a collaborative environment where ideas flourish and innovation is rewarded. This will ensure your business remains agile, adaptive, and ready to face any challenges the future may hold.

Conduct continuous market research : To stay ahead, you must be in tune with the ever-changing landscape of your industry. Engage in regular market research to gain invaluable insights into customer preferences, emerging trends, and potential threats. By staying informed, you’ll be better equipped to make strategic decisions that safeguard your business.

Diversify your offerings : Don’t place all your hopes and dreams on a single product or service. Spread your wings and explore new avenues, diversifying your portfolio to better serve your customers and mitigate risk. This will not only strengthen your business but also help you weather any storms that may come your way.

Maintain open communication with customers : Forge deep, emotional connections with your customers through honest and transparent communication . Listen to their feedback and be responsive to their needs. By nurturing these relationships, you’ll create a loyal customer base that will support your business through thick and thin.

To avoid the devastating consequences of marketing myopia, hold these strategies close to your heart. Nurture your business with love and care, and you’ll find yourself on a path to long-lasting success and prosperity.

What is a current example of marketing myopia?

A current example of marketing myopia is the decline of traditional cable TV providers. With the rise of streaming services like Netflix, Hulu, and Amazon Prime Video, customer preferences have shifted towards on-demand, customized content. Many cable TV providers were slow to adapt to this change, focusing on their existing products and services instead of acknowledging and addressing the evolving needs of their customers. As a result, they’ve experienced a significant loss of subscribers and market share to their more innovative and customer-focused competitors. By not anticipating and embracing the changing landscape of the entertainment industry, these companies fell into the trap of marketing myopia.

What is marketing myopia and how can it be avoided?

Marketing myopia is a term coined by Theodore Levitt in a 1960 Harvard Business Review article. It refers to a short-sighted and inward-looking approach to marketing that focuses on the needs of the company instead of defining the company and its products in terms of the customers’ needs and wants. This narrow-minded view often leads to a company’s inability to adapt to changing market conditions, ultimately resulting in the loss of market share and growth opportunities.

To avoid marketing myopia, companies can follow these strategies:

Focus on customer needs Embrace change and innovation Conduct regular market research Diversify product offerings Develop a long-term vision Cultivate a customer-centric culture

What is the characteristic of marketing myopia?

Product-centric focus Resistance to change Short-term orientation Overemphasis on existing markets Complacency Limited market research

What are Theodore Levitt’s significant works?

Theodore Levitt was an influential economist and professor at Harvard Business School, best known for his groundbreaking work on marketing myopia. Besides this seminal concept, Levitt contributed to other significant works in the fields of marketing and economics. Some of his notable publications and ideas include: “The Globalization of Markets” (1983): In this article published in the Harvard Business Review, Levitt argued that advances in technology, communication, and transportation were creating a global market where companies needed to develop standardized products and marketing strategies to cater to the converging consumer preferences worldwide. “Innovation in Marketing” (1962): Levitt’s book examined the importance of innovation in marketing practices and emphasized that companies must continually adapt their marketing strategies to stay relevant and competitive in the ever-changing business environment. “The Marketing Mode” (1969): This book explored the concept of the “marketing mode,” which posited that successful businesses must adopt a marketing-oriented mindset, putting the needs and wants of customers at the center of their decision-making process. “The Marketing Imagination” (1983): In this influential book, Levitt discussed the role of creativity and imagination in marketing, urging companies to break free from traditional marketing practices and embrace innovative approaches to connect with customers and create value.

Samrat is a Delhi-based MBA from the Indian Institute of Management. He is a Strategy, AI, and Marketing Enthusiast and passionately writes about core and emerging topics in Management studies. Reach out to his LinkedIn for a discussion or follow his Quora Page

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By: Theodore Levitt

At some point in its development, every industry can be considered a growth industry, based on the apparent superiority of its product. But in case after case, industries have fallen under the shadow…

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• Publication Date: Jul 1, 2004
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At some point in its development, every industry can be considered a growth industry, based on the apparent superiority of its product. But in case after case, industries have fallen under the shadow of mismanagement. What usually gets emphasized is selling, not marketing. This is a mistake, because selling focuses on the needs of the seller, whereas marketing concentrates on the needs of the buyer. In this widely quoted and anthologized article, first published in 1960, Theodore Levitt argues that "the history of every dead and dying 'growth' industry shows a self-deceiving cycle of bountiful expansion and undetected decay." But, as he illustrates, memories are short. The railroads serve as an example of an industry whose failure to grow is due to a limited market view. Those behind the railroads are in trouble not because the need for passenger transportation has declined or even because cars, airplanes, and other modes of transport have filled that need. Rather, the industry is failing because those behind it assumed they were in the railroad business rather than the transportation business. They were railroad oriented instead of transportation oriented, product oriented instead of customer oriented. For companies to ensure continued evolution, they must define their industries broadly to take advantage of growth opportunities. They must ascertain and act on their customers' needs and desires, not bank on the presumed longevity of their products. In short, the best way for a firm to be lucky is to make its own luck. An organization must learn to think of itself not as producing goods or services but as doing the things that will make people want to do business with it. And in every case, the chief executive is responsible for creating an environment that reflects this mission.

Learning Objectives

To understand four myths about markets, products, manufacturing, and R&D that can erode a company's growth, and to replace those myths with facts.

Jul 1, 2004

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Harvard Business Review

R0407L-PDF-SPA

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