Marketing Myopia - Levitt

Kevin Toh

Section 23

01/19/2017

Levitt, Theodore. (2004) "Marketing Myopia" Harvard Business Review

Central Theme

In the article "Marketing Myopia", Levitt explains in-depth the reason in which many companies have collapsed and fell into irrelevancy. His argument heavily falls on the fact that companies rely on the ever growing human population and consumer base of their individual business to focus on production, rather than focus on improving their product. An important argument Levitt uses is the railroad industry. Executives within railroad companies had thought of their company as part of the railroad industry, seeing no suitable competition, rather than the transportation industry, where many other companies have emerged to replace railroad companies in many aspects. Even other companies, such as the petroleum industry that Levitt mainly talks about in his argument, have fallen in sense due to the self-deceiving cycle. Similar to railroad companies, petroleum companies saw no rivals in producing a competitive substitute, so instead of putting money into improving their own product, they put more money into producing more oil to cater to the needs of their “ever-growing” consumers. As a result, it was not oil companies that originated better quality oils and major innovations, but small businesses within the oil industry, or even groups outside the oil industries. At the time, oil companies have owned gas and resources, yet they were not the ones who initiated the natural gas revolution, nor did profit much from their gas ownership at all. The oil industry was saved by the smaller businesses around them rather than the oil companies that hold all the resources. While all innovations and breakthrough occur within small businesses, oil companies have focused on mass production, the emphasis of selling, rather than marketing in order to meet the needs of its consumers.

Critical Analysis

By focusing on selling, as Levitt has put it, “Selling is preoccupied with the seller's need to convert the product into cash” (Levitt 2004), oil companies has set its sole purpose on selling generic products. In contrast, by marketing and meeting its consumer’s needs, oil companies can create a sort of relationship with its consumers and ultimately create value with its product and work towards innovation.  I agree with Levitt’s thoughts on the subject. Companies, like those within the railroad and oil industries, have missed out on many advancements and innovations that could have been created within their own business. The self-deceiving cycle that they have fallen into has made their business stagnant, believing that they are within a growth industry and business would come on its own. As Levitt would put it, there is no such thing as a growth industry. There are companies that act upon capitalizing on growth activities; however there are many that die out as they do not decide to appeal to their consumers to grow. Rather, these companies shrink, and even die out as a result of purely mass reproducing with the optimistic thought that the increasing population will contribute to its consumer base as increased demand.

Strengths:

As enticing as direct profit maximizing must be, Levitt stresses focus upon consumers rather than the product. I would definitely focus on the consumers as it would generate more value compared to mass producing. By meeting consumers need on possible new products, it can expand its consumer base and even start to research newer products. Within my workplace, Coach, Inc. has expanded its product line so often there were original products that were made even before my time. Although some collections Coach has produce some products that may not have done so well, they have definitely made up for bad investments with continual new products that customers would have to line up outside the store to buy.