To support his idea, Levitt utilized the railroad and Hollywood movie companies as examples. With this short-sightedness, they are only focused on the needs of the company itself and its organisations are unable to focus on the needs and wishes of the customer. Today, every company, whether it aspires to be a national champion or global competitor, needs to be engaged in and with countries around the world. Such seeming diversity can also offer offer other benefits to a monopolist. But then Henry Ford came along and the buggy whip industry went into decline and eventually became extinct.
Marketing myopia means a company implements strategies that will surely give them short-term profit, but which fails to overlook the long-term profit. This can then have disastrous consequences for their organisations. This can result from having a more efficient i. While Nokia prospected the world for nuggets of insight about promising technologies, diverse customer behaviour and new ways to use mobile phones, Motorola continued to develop its products based on its knowledge of the customers and technologies in its U. It cannot adapt to the changes suffered by the market, so it remains in its own world and ignores whatever happens outside.
This allowed them to access knowledge that paved the way for later investments in building their own brands and distribution channels. Please search previously asked questions and articles here and on google before asking your questions. Some commentators have suggested that its publication marked the beginning of the modern marketing movement. It had sophisticated suppliers of everything from semiconductors to topflight advertising on its doorstep. That is why it is essential that, when companies suffer from Marketing Myopia, they turn from product orientation and change to customer orientation. For example, photo camera producer Kodak refused to produce digital cameras, while customers had an increasing desire for them.
This profit maximizing price would generally be substantially higher than the product's cost of production, and it would thus also be substantially higher than the equilibrium price that would exist for the product if it were instead supplied by a number of competitive firms. It is a shortterm approach to marketing and lacks … long term vision In Medical Science, shortsightedness is also known as myopia. The authors are also co-authors of From Global to Metanational: How Companies Win in the Knowledge Economy, Harvard Business School Press, 2001 , on which this article is based. Self-Deceiving cycle Businesses should have a vision rather than a goal. Only then can they act and produce and offer products that match what their customers want.
Horizontal integration is the gaining of control by one company over other producers or sellers of the same product. However, once you address these issues, it becomes easier to fill in the gaps to deliver a customer-centric service that will appeal to the need of prospects. Instead, he was all about provoking people to think differently. If you view marketing from the broader perspective of fulfilling customer needs, you will be able to adapt to changes in the market. They should be able to see themselves at a point ahead of what they are now. Levitt suggests that leaders ask themselves: What business are we really in? Multinationals will also have to unlock the potential of knowledge that lies underutilised in their local subsidiaries.
Check if they do extensive research before purchasing a particular product. Kodak fell prey to Marketing Myopia by not understanding what their customers were really buying and not knowing what business the company was actually in. Levitt believed that products should be viewed as a consequence of marketing rather than marketing being a necessary consequence of a product. In the same category, there is the conception that no other company can replace you, or comparing population growth to consumption growth. Thus, the term is generally used in a relative sense rather than an absolute one.
In some cases, a greater efficiency is the result of economies of scale, which means that the production cost per unit of product declines as the volume of output increases due to the ability to use some resource more intensively e. Whether marketing and selling high health risk products is ethical e. There are several examples in the article that illustrate the main concept, that your product is not your business. In particular, it can be valuable in separating markets, thereby allowing the monopolist to charge separate, profit maximizing prices in each. Missed opportunities According to Levitt, many companies miss out on opportunities when they suffer from Marketing Myopia. Instead, there are really only companies continuously capitalizing on growth opportunities.
It is difficult for any seller to charge a higher price than its competitors because it would be easy for buyers to purchase from other sellers instead. Often the acquisition of control is not publicized, and sometimes different branding is used to create the illusion of competition. The results are now legendary. Now, since they can order products online and have them brought at the door, they are even less likely to go to such a small store and shop there. For example, a company can still be considered a monopoly even if it faces competition from 1 a few relatively small scale suppliers of the same or similar product s or 2 somewhat different goods or services that can to some limited extent be substituted for the product s supplied by the monopolist. Lock-in is also used so that replacement parts or add-on enhancements must be purchased from the same manufacturer.
More specifically, monopolies can arise in any of the following, non-mutually exclusive, ways: 1 By developing or acquiring control over a unique product that is difficult or costly for other companies to copy. Two Extreme Cases It can be useful when thinking about monopoly to look at two extreme cases. Others that are thought of as seasoned growth industries have actually stopped growing. How to Avoid Marketing Myopia To avoid marketing myopia, smart marketing managers look beyond the attributes of their products and services they offer. It is because there has been a failure of management.
You can utilize various tests in a small group to find out if it is a potential product or not. All the while, they were missing out on product and market developments. Closely related to this is control over a unique input for a product, such as a unique natural resource. Perhaps the most famous is the railroad lines, which Levitt argues fell into steep decline because they thought they were in the train business rather than the transportation business. The reason is that the former has much greater flexibility in setting prices than does the latter, which has little if any control over prices. In other cases, a demanding new customer gives purpose and incentive to engage with the world in a new and profitable way. Observing pilot users across Scandinavia, it was among the first to recognise that digital technology could dramatically improve the functionality of mobile phones.