Getting past marketing myopia

Shunu Sen

I am keen to know about marketing myopia. What does this term exactly mean? Can you please give me instances of marketing myopia in the Indian context? How does it impact a brand and its position in the market? -- Ashutosh, on e.mail

Marketing Myopia was a seminal, epoch-making article written by Theodore Levitt; originally printed in the Harvard Business Review (HBR). At the time of the publication of this article, Theodore Levitt was a lecturer in Business Administration at the Harvard Business School; now, he is a full-fledged professor. The Harvard Business Review has sold more than half a million reprints of this article and each reprint has no doubt been copied several times over.

Indeed, there must be very few students in India who have not read this article which is about how a company can ensure its continued growth. To quote from the summary of this article, (as published, in the HBR) Marketing Myopia answered that question in a new challenging way by urging organisations to define their industries broadly to take advantage of growth opportunities. Using the archetype of the railroads, Levitt showed how they declined inevitably as technology advanced because they defined themselves too narrowly. To continue growing, companies must ascertain and act on their customers' needs and desires, and not bank on the presumptive longevity of their products.

Even more dramatic is the first paragraph of this seminal article which reads: 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 which are thought of as seasoned growth industries have actually stopped growing. In every case the reason for growth is threatened, slowed, or stopped is not because the market is saturated; it is because there has been a failure of management.''

Marketing myopia is true for all companies who define their markets too narrowly, including companies in India, who have defined markets in the '60s and '70s on the basis of licensing production. Experience shows that when a business has redefined its market, it has continued to grow as new targets are set. Perhaps the best example is the recent one, where categories such as telephones, television, wireless communication, cable television service providers, Internet, DTH and film producers have all converged into a single category known as ICE, which is a combination of information (and Internet), communication and entertainment categories.

The same is true of brands. Companies which segment a market using their own yardsticks or price as a parameter, instead of defining markets from the consumers' point of view, often suffer from a similar myopia. This results in the brand not being able to exploit its full opportunity; and even prevents the brand from cracking open a whole new market.

Take the detergents market, for example. It was myopia which prevented some of the largest companies in the country such as Hindustan Lever and Tata from developing a detergent powder which could convert the laundry soap user. The preferred route, instead, was a detergent bar. While this was indeed a good strategy, Nirma as a brand proved that laundry bar users could be converted to detergent powder users, despite the fact that they had to change their washing habits. Time and again, one finds that the manufacturer tends to segment the market when the consumers perceives the market to be much larger.

Let us return to Theodore Levitt and his seminal article. When writing a retrospective commentary of his article, he mentions that his original concept was often misunderstood. It is worth quoting Theodore Levitt in full. Not everything has been rosy. a lot of bizarre things have happened as a result of the article:

Some companies have developed, what I call marketing mania, they've become obsessively responsive to every fleeting whim of the customer. Mass production operations have been converted to approximations of job shops, with cost and price consequences far exceeding the willingness of customers to buy the product.

Management has expanded product lines and added new lines of business without first establishing adequate control systems to run more complex operations.

Marketing staffs have suddenly and rapidly expanded themselves and their research budgets without either getting sufficient prior organisational support or, thereafter, producing sufficient results.

Companies that are functionally organised have converted to product, brand or market-based organisations with the expectation of instant and miraculous results. The outcome has been ambiguity, frustration, confusion, corporate infighting, losses, and finally a reversion to functional arrangements that only worsened the situation.

Companies have attempted to serve customers by creating complex and beautiful efficient products or services, that buyers are either too risk-averse to adopt, or incapable of learning how to employ. In effect, there are now stream shovels for people who haven't yet learnt to use spades. This problem has happened repeatedly in the so-called service industries (financial services, insurance, computer-based services) and with American companies selling in less developed economies.

Marketing Myopia was not intended as analysis or even prescription; it was intended as manifesto. It did not pretend to take a balanced position. This means that too much of a good thing can be a bad thing. Marketing myopia does not prescribe being myopic about marketing.

If there is one article worth reading in the reams of marketing literature, it is this (Marketing Myopia, by Theodore Levitt, published in HBR, in September October 1975). Read it. All of you.

(The author is CEO, Quadra Advisory, a strategic marketing consultancy. Readers may send in their questions on marketing issues to The Editor, Business Line, 859, Anna Salai, Chennai - 600002 or e-mail them to bleditor@thehindu.co.in)