An Introduction to Theodore Levitt's Marketing Myopia

Summary

In Theodore Levitt's 1960 article 'Marketing Myopia,' he argues that businesses should focus on meeting human needs rather than becoming overly tied to specific products or industries. Levitt critiques companies that identify themselves with rapidly growing sectors, suggesting they may fail if the industry evolves. Using the example of railway companies, Levitt emphasizes the importance of adapting to new methods, such as cars, to better serve transportation needs. The article stresses that successful businesses evolve continually to address changing consumer demands, making marketing myopia a timeless concept in the face of technological advancements.

Takeaways

• 😀 Businesses should focus on meeting human needs rather than being tied to specific products or industries.
• 😀 Theodore Levitt's 1960 article *Marketing Myopia* critiques companies that focus on growth industries without adapting to changing consumer needs.
• 😀 Companies that see themselves as part of a 'growth industry' risk missing shifts in consumer demands and technological advancements.
• 😀 Levitt uses the example of railway companies to demonstrate how businesses can fail if they don't embrace new methods of transportation like cars.
• 😀 A successful business is one that adapts to meet evolving customer needs, rather than staying fixed on improving a particular product.
• 😀 Levitt contrasts two companies: one focused on improving typewriters (Company A) and the other focused on meeting productivity needs (Company B).
• 😀 Company B recognized the rise of computers and shifted from typewriters to computers, while Company A continued to improve typewriters, ultimately failing.
• 😀 Businesses should be adaptable and open to shifting industries when new technologies or market demands arise.
• 😀 Levitt’s argument highlights the importance of understanding your business’s purpose beyond the product you sell.
• 😀 The concept of marketing myopia remains relevant today as new technologies continuously create and disrupt industries worldwide.

Q & A

What is the central argument of Theodore Levitt's article 'Marketing Myopia'?

The central argument of Theodore Levitt's article 'Marketing Myopia' is that businesses should not define themselves by the specific product or industry they are in, but rather by the human need they aim to fulfill. Companies that adapt to meet customer needs, rather than focusing solely on their product, are more likely to succeed in the long run.

What is meant by 'growth industries' in Levitt's context?

In Levitt's context, 'growth industries' refer to sectors that are experiencing rapid expansion, often because they meet a consumer need in a new or popular way. However, Levitt argued that identifying a business solely with a growth industry can be limiting and may lead to failure if the industry is supplanted by a better alternative.

How does Levitt view businesses that focus only on their product or industry?

Levitt believes that businesses focusing only on their product or industry become myopic, meaning they fail to recognize shifts in consumer needs or technological advances. This narrow focus can prevent companies from adapting to new opportunities or threats, leading to stagnation or failure.

What is Levitt's example of the railway industry meant to illustrate?

Levitt's example of the railway industry illustrates his point that businesses should not define themselves by the industry they operate in, but by the broader human need they fulfill. While railway companies saw themselves as part of the railway industry, Levitt argued they should instead focus on meeting the transportation needs of consumers and be prepared to adopt new methods of transport, such as cars.

How does Levitt differentiate between Company A and Company B in the typewriter example?

In the typewriter example, Company A focuses solely on improving typewriters and sees itself as part of the typewriter industry, while Company B sees itself as part of the productivity business, where typewriters are just one tool. When computers are introduced, Company A continues to improve typewriters, while Company B shifts focus to the emerging computer industry, adapting its products to meet new consumer needs.

What is the significance of Company B's response to the computer industry?

Company B's response is significant because it illustrates Levitt's argument that businesses should adapt to changing consumer needs rather than clinging to outdated products. By transitioning into the computer industry, Company B recognizes that typewriters no longer fulfill the productivity needs of customers, whereas Company A's failure to adapt results in its decline.

Why does Levitt argue that defining a business by its product or industry is a mistake?

Levitt argues that defining a business by its product or industry is a mistake because it limits the company's ability to innovate and adapt to new opportunities. Businesses should focus on the broader human need they are meeting, which allows them to pivot when market conditions change or new technologies emerge.

How is Levitt's concept of marketing myopia relevant in today's business environment?

Levitt's concept of marketing myopia remains highly relevant today, as rapid technological advancements continuously create and destroy industries. Companies that are too narrowly focused on their existing products or industries risk being overtaken by more adaptive competitors, while those that focus on fulfilling human needs can continue to thrive and innovate.

What role does customer needs play in Levitt's argument?

Customer needs are central to Levitt's argument. He emphasizes that businesses should see themselves as serving these needs, not merely selling products. By focusing on how to meet evolving consumer demands, businesses can ensure long-term success and avoid being blindsided by changes in the market.

What is the key takeaway from Levitt's marketing myopia theory?

The key takeaway from Levitt's marketing myopia theory is that businesses must continually adapt to meet the changing needs of customers. This involves not just improving existing products, but also being open to new innovations and industries that better serve consumer demands. Companies that fail to do so risk obsolescence.