As an individual, not being able to see where you are going is dangerous. As an organisation, not being able to see is also dangerous, so much so, that such an affliction has its own name. It is called marketing myopia. The concept, originally proposed by Theodore Levitt in the early 1960s demonstrates the connection between failing to market successfully and organisational failure.
Levitt believed organisations diagnosed with marketing myopia were more focused on selling products than creating customer satisfaction. The end result of such a misguided focus he argued would often result in organisations being primed for a significant decline, fiscal failure, or extinction. Levitt was not alone in his thinking. Maciariello, co-author of The Daily Drucker reported, “Peter F. Drucker is well known for stating that there is only one valid purpose for a business: to create a customer. And there are only two basic business functions: marketing and innovation.” Drucker’s thinking is important contextually too because his thinking provided the original spark of inspiration for Levitt’s now seminal article on marketing myopia. They were good friends.
Levitt’s concept identified four preconditions for making a marketing myopia diagnosis. Each precondition demonstrated business models focused on selling the bulk of their production into so-called ‘endless’ growth industries, or markets were highly vulnerable to the effects of marketing myopia. Growing up on both sides of World War II, Levitt had witnessed the birth of both mass production and consumerism. He was quick to see the issues with mass production dynamics and quickly recognised that production mindsets overshadowed the more critical mindset of producing what he called ‘customer satisfactions’, an idea Drucker was also fully supportive of.
In New Zealand, evidence of mass production mindsets can be seen in the timber, tourism, dairy, honey, wine, horticulture, and red meat industries. Some to a lesser degree, some more. Many of the enterprises in these sectors operate business models which rely on selling undifferentiated commodity products. Many have placed large bets on continued endless growth in markets like China. Recent media supports this assertion. Such addictions according to Levitt makes these enterprises vulnerable to feeding a production habit, which encourages a focus on ‘selling products’ instead of focusing first, and foremost, on producing ‘customer satisfactions.’
Levitt’s research highlighted a landscape of historical failure across diverse industry sectors. He highlighted enterprises that had made poor judgements by predicting and believing in growth markets and supporting those beliefs with production mindsets. The boardrooms of the railroad industry considered their operations to be railway supply companies rather than logistics solution providers. As a result, they missed new transport options. The oil industry missed gas, and appear to be in the process of missing electricity as a power input for transport. Blockbuster missed Netflix, and Nokia missed the smartphone.
And what happened at Kodak? Incredibly, they invented digital camera technology and then missed the digital bus completely. Failure rates become amplified when enterprises maintain a cult belief in the customer satisfaction power of their own products. You can see examples of this phenomenon played out in the media as companies defend or rationalise maintaining the status quo. In some cases, the effort to defend is more intense than the effort to make customers happy. The ostrich strategy is rarely an effective response. At some point, even the most stubborn ostrich has to pull their head out of their a..e.
There is absolutely a case is to be made for genuine end-to-end marketing. Unfortunately, in New Zealand, the funding and investment available for management and marketing research is extremely low. Read practically non-existent. Try getting a management or marketing project funded. I’m not talking about just investing in immersion or insights (both good) or hobbling together some persona profiles. I’m advocating for deep marketing research and development that facilitates true marketing innovation. For example, rejuvenating concepts like Wroe Alderson’s transvection. This was a marketing provisioning system designed to leverage information and innovation to clear markets, not price. Opening up fresh thinking about marketing problems will not only mitigate marketing myopia, it will vastly improve the success of enterprises invested in the pursuit of premium in any business, anywhere. It’s about value creation and capture…and that’s all about marketing.