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Marketing Myopia by Theodore Levitt

Marketing Myopia by Theodore Levitt. Group No.8: Alex Elwood Nikolas Foster Blake Overall Shaelee Pittenger Lorelei Wilson. What is Myopia. Nearsightedness--not inherited. It can be prevented.

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Marketing Myopia by Theodore Levitt

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  1. Marketing Myopiaby Theodore Levitt Group No.8: Alex Elwood Nikolas Foster Blake Overall Shaelee Pittenger Lorelei Wilson

  2. What is Myopia • Nearsightedness--not inherited. It can be prevented. • Short sighted and inward looking approach to marketing that focuses on the needs of the firm instead of defining the firm and its products in terms of the customers' needs and wants. • Read more: http://www.businessdictionary.com/definition/marketing-myopia.html#ixzz0yyuoieyC

  3. Theodore Levitt Started a newspaper with Erma Bombeck in elementary school Served in World War II After the war, Ted was a reporter and sportswriter for the Dayton Journal Herald Received his masters in economics from Ohio State Worked briefly as a consultant in the oil industry Began teaching at Harvard in 1959 Wrote Marketing Myopia in 1960, most reprints of any Harvard Business Review article, 900,000

  4. Levitt cont. • Wrote 25 articles for the Harvard Business Review • Authored 8 books on Marketing • 1983 wrote “Globalization of Markets” – coined the word globalization • In 1985 became the editor of the Harvard Business Review, expanded it’s readership beyond an academic journal into a mass market management magazine • Won many awards • “What business are you really in?” – Marketing Myopia • Approach was not to get approval in research, but to have “important people in important companies” (his phrase) to take his ideas and go with them

  5. “There is no such thing as a growth industry, what we have is growth opportunities.” -Theodore Levitt

  6. Guarantee a Self-Deceiving Cycle • Believe growth is guaranteed by an expanding population • Believe there is no competitive substitutes • Have too much faith in mass production • Preoccupation with a product: focus on product instead of customer

  7. Assured Growth by Expansion • Belief that increases in population and affluence ensure growth • Lack of innovation – A common characteristic • Companies focus on efficiency, not innovation • Petroleum industry • A prime example of this fallacy • Reinforces Levitt’s caution of myopically defining one’s industry

  8. No Threat of Obsolescence • The fallacy of believing competitive substitutes don’t exist • Petroleum industry • A history of obsolete products due to competitive substitutes • Kerosene Lamp • Kerosene Space Heater

  9. Mass Production • Lower product’s unit costs as output increases • Focus on production, neglect marketing • Selling is not marketing • Focus on company’s needs, not customer’s needs

  10. Henry Ford Brilliant Marketer Senseless Marketer • Created a product customer’s needed • Created a product customer’s could afford • Created production system to fit market needs • Refused to make cars in any other color but black

  11. Preoccupation with Product • Industry declines instead of growing • Example – Oil Companies • Survival entails change

  12. Creative Destruction • When something new eliminates something old • Must become innovative – reinvent business • Must change business strategy to survive

  13. Marketing Myopia Today • Airline Industry • - Southwest Airlines vs. American Airlines • - Customer satisfaction low in this industry • - Airlines vs. Cable T.V : Tie • - IRS ranked higher than airlines in customer satisfaction

  14. Marketing Myopia Today • Technology Industry • More focused on the customer today than in 1960 • Apple • E-commerce and E-Business ranked high in customer satisfaction report http://www.theacsi.org/images/stories/ACSI_TREE_08_10.pdf

  15. The Pros • Provided for new thought process • Customer Centric • The concept stands the test of time • Marketing is not selling

  16. The Cons • Can a company realistically restructure • Can go outside the scope of bounded rationality (lose reality) • Static not dynamic • Does not factor for globalization • Ecommerce

  17. Conclusion • “Organizations must learn to think of itself not as producing goods or services but as buying customers, as doing the things that will make people want to do business with it.” Theodore Levitt

  18. Reference • Levitt, T. (1960). Marketing myopia. Harvard Business Review, 38(4), 45-56. • Lavelle Louise (2006). Theodore Levitt Dead at 81. Business Week. Retrieved September 10, 2010 from www.businessweek.com. • McDermott, Anne (2010). Customer Satisfaction-Airlines Worse than IRS, Better than Facebook. FareCompare.com. Retrieved September 8, 2010 from http://www.farecompare.com/articles/airline-industry-news/customer-satisfaction-airlines-irs-facebook/ • Dictionary, (2010). Creative destruction.http://dictionary.reference.com/browse/creative+destruction • Wikipedia, (2010). Creative destruction. http://en.wikipedia.org/wiki/Creative_destruction

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