The Harvard Business Review (HBR) magazine, which has published some of the most powerful ideas in the history of modern business, recently celebrated 100 years since its inaugural issue was published in 1922. To mark this occasion, a collectors’ edition titled HBR at 100 has been launched containing some of the most influential articles that the magazine has ever carried.
The myopia argument
As I picked up this book, I felt certain that one particular article would feature in it. This is the classic article titled “Marketing Myopia” which has shaped much of my own thinking as a marketer. Authored by Theodore Levitt, a Harvard Professor, the article argued that, to succeed and to then sustain growth, companies need to shed their myopic product-oriented view of business, and reorient themselves towards customer needs.
First published in 1960, this article is as relevant today as it was six decades ago.
Levitt commenced his article by pointing out how railroad companies had stopped growing in the US not because the need for transportation had declined, but because they had defined their business in a myopic manner. They thought that they were in the “railroad business” and therefore continued to be totally railroad-oriented in everything they did. Meanwhile, other forms of transport came in — cars, trucks, airplanes and even telephones — and took away their customers. If only the railroad companies had been customer-oriented, they would have understood that they were serving the customer’s need for transportation and not for railroad services. This would have enabled them to evolve and offer other formats of transportation as well.
Levitt went on to argue that in every case where a company’s growth is threatened, the reason is not because the market is saturated. It is because there has been a failure in correctly identifying customer needs, and reorienting the business to these needs. As he says, marketing has to “discover, create, arouse and satisfy” customer needs.
Marketing is not about the selling of products or services that your company makes. It is about understanding what consumers really want. As Levitt famously told his students at Harvard Business School — “People don’t want a quarter inch drill. They want a quarter inch hole!”
Myopia continues to thrive
If you think this should be pretty obvious to all seasoned marketers, pause to consider these recent examples of marketing myopia.
— Kodak, a famous brand, withered away because it thought that it was in the photography films business. The customer need was one of recording and preserving memories, not of buying photographic film. When digital cameras boomed, brands like Sony and Canon walked away with this new stream of business.
— Nokia, once a dominant leader in mobile telephones, lost its way when smartphones, powered by android and iOS, entered the market. These new devices satisfied the narrow telephonic communication needs that had been served by conventional mobile phones, and also aroused and satisfied new and enhanced customer needs. Nokia failed to see this big picture of the future.
— Over the past few years, Hollywood and Bollywood have been losing space to streaming services such as Netflix and Hotstar and to gaming brands as well, because they are too narrowly focused on making movies rather than on customers’ entertainment needs.
Every year, over 80 per cent of all new product launches fail. Many of these failures are because marketers have not figured out what specific customer needs their products will serve in some distinctive manner.
Each time I attend an event showcasing start-ups, I am reminded of marketing myopia because so many of the founders I meet are focused on their shiny new technology platforms and their products, rather than on the fundamental consumer needs that they serve. In all likelihood, many of these start-ups will fail, unless they re-orient themselves.
“Marketing Myopia” is a classic article that every marketer should read. It is a compelling reminder that we need to pay constant attention to the changing needs of our customers. Building a fiercely customer-oriented business is the only way to avoid the fate that has befallen the companies that got lost in their own product worlds.
Harish Bhat is Brand Custodian, Tata Sons. These are his personal views.