Written in 1960, the article revolutionized the thought processes of business managers who were narrowly focused on the products they sold—they were short-sighted or myopic, as Levitt calls it.
It is important to define an industry by asking a simple question—“what business are we in?
To ensure growth, companies must define their business properly based on customer needs and desires. Businesses are actually customer satisfying institutions/entities.
my·o·pi·a
lack of imagination, foresight, or intellectual insight
2. Theodore Levitt (1925-
2006)
• PROFESSOR AT HARVARD BUSINESS SCHOOL AND
EDITOR OF THE “HARVARD BUSINESS REVIEW”
• DEAN OF MARKETING, KNOWN FOR HIS
CONTRIBUTION IN MARKETING. THE JOURNEY MAY
HAVE STARTED WITH “MARKETING MYOPIA” IN
HARVARD BUSINESS REVIEW IN 1960 WHEN HE WAS A
LECTURER AT HARVARD
• POPULARIZED THE TERM OF GLOBALIZATION WITH
HIS ARTICLE “GLOBALIZATION OF MARKETS” IN 1968
• AWARDS INCLUDE MCKINSEY AWARDS FOR BEST
ANNUAL ARTICLE AND CHARLES COOLIDGE PARLIN
AWARD AS MARKETING MAN OF THE YEAR IN 1970.
• ONE OF THE MOST IMPORTANT FIGURES IN
MARKETING AND ECONOMICS
3. Essence of the Article
Written in 1960, the article revolutionized the thought
processes of business managers who were narrowly focused on
the products they sold—they were short-sighted or myopic, as
Levitt calls it.
It is important to define an industry by asking a simple
question—“what business are we in?
To ensure growth, companies must define their business
properly based on customer needs and desires. Businesses are
actually customer satisfying institutions/entities.
5. Fateful Purposes
Companies went into decline because they did not define their
industries properly
Examples of some successful and unsuccessful companies that
were product-oriented and not customer-oriented are:
Railroad didn't stop growing because need for passenger and
freight transportation declined
Hollywood escaped being totally ravished by television
6. Shadow of Obsolescence
Threats to products within industries and remaining unprepared
to the improvements cripple the presence of companies
Dry cleaning: synthetic fibers and chemical were appearing, we
no longer need dry cleaning.
Electric utilities: solar energy, fuel cells, and other power source
are threat to electric utilities.
Grocery store: supermarket are doing a better job of
understanding customers need than grocery stores.
8. Self-Deceiving Cycle
Self-deceiving cycle occurs when companies lack the vision. Inappropriate self-
assessment system leads to failure in the long run.
Four conditions that guarantee the self-deceiving cycle:
Belief that growth is assured by an expanding and more affluent population
Belief that there is no competitive substitute for the industry’s major product.
Too much faith in mass production and in the advantages of rapidly declining unit costs as
output rises
Preoccupation with a product that lends itself to carefully controlled scientific
experimentation, improvement and manufacturing cost reduction
9. Population Myth
Assured profits based on expanding population
Increasing purchases?
Market growth based on this assumption
Limits imagination
absence of problem
absence of thinking
10. Production Pressure
Mass Production
Drive to PRODUCE!!!
Spectacular profit possibilities
Marketing neglected
Lag in Detroit
Failed to reveal customer’s wants
Product-oriented
Ford
Production genius
Marketing genius
Product provincialism
“Creative Destruction”
11. Dangers of R&D
Top-heavy engineers and scientist management
Bias in favor of Research and Product Development
Marketing Treated as residual activity
Biased towards controllable variables
Consumers are:
Unpredictable
Varied
Fickle
Stupid
Shortsighted
Stubborn
Bothersome
12. Step Child Treatment
No one interested in basic human needs
Questions about customers and Markets not asked
More excitement in more product then the customers
Articles detailed towards production and none for
marketing
13. The Beginning and End?
Customer-Satisfying process viewpoint is vital
Violating rules of Scientific Method
Define the problem
Develop hypothesizes to solve the problem
Customer satisfaction not being considered as
the problem
Selling and Marketing are different
14. Visceral Feel of Greatness
Leaders need to have vision that can produce
eager followers
Followers are the customers
Management must not produce products but
provide customer-creating value satisfactions
Firm must think of “buying customers”
Leader must know where they are going
If a leader goes down any road, they
might as well stay at home.
15. A Few Terms
Product Provincialism
Step-Child Treatment
Creative Destruction
The Beginning and End