Marketing Myopia – One of HBR’s Best
During a conversation with a colleague this week, the topic of my favorite HBR article of all time came up. This particular person had never read the article, and I urged that she drop everything and change that immediately. There aren’t that many things in life that get that kind of endorsement, and I am only one of a vast number of fans for this HBR piece. What article is it? It’s Marketing Myopia, written by Theodore Levitt in 1960 (yes – it’s 50 years old and still relevant).
The premise of the article is simply that how you define your market can have an extraordinary impact on your ability to be successful over time. Often businesses are too myopic in their definition of their markets, which can lead to catastrophic results. Levitt uses as an example the railroad barons, who considered themselves just that – railroaders. They dismissed advances in adjacent industries as irrelevant, because it wasn’t specific to the railroad industry. However, railroads missed out on opportunities to protect their business and even grow and expand into new areas because they framed their business too narrowly. They insisted on adhering to the railroad definition instead of focusing on the problem they were solving for their customers – the transport and delivery of goods and people across large geographies. Had they focus on the customer need, airlines and other shipping alternatives would have had more meaning to them, allowing them to prepare for a new competitive environment.
To say this article had a profound impact on how I think about business is an understatement. At a time in my career when I had more academic training than real-world experience, Levitt gave me the language and context for articulating how I view the business world. So many businesses fall into the trap of defining their market by the products and services they deliver as opposed to the problems they solve. When you take a step back, it’s immediately apparent how limiting that is, and how much risk that poses to a business. Some of the basic challenges myopia poses to a business include:
- Failing to identify new opportunities. Consider the fuel refiners. Does anyone really believe that a century from now, the world will rely on fossil fuels to the extent that it does today? I imagine that Shell and BP have long had alternative-fuel scenarios in evaluation and development, so that they can capture that segment of the market as it emerges. Market shifts can become an AND vs. an OR when you’re paying attention early enough.
- Failing to identify risks from adjacent or emerging competitors. How long did it take the music industry to come to terms with the very real threat posed by the digital music providers? When you consider your industry to be the management of artists and the production and marketing of albums, what risk does Napster really pose? Lost royalties? How about an entire paradigm shift in how people consume music? Music labels ultimately had to completely rethink how they achieve profitability and were playing catch-up to an industry that almost deemed them unnecessary. All because they were focusing on the wrong thing.
- Losing touch with your customers. This is the key issue at the end of the day. When you are hyper-focused on your product, you ultimately lose focus on your customers. Consider how different the questions (and answers) can be.
Compare – what do you want from your railroad provider? Versus – and what do you need in terms of transporting your goods across the country?
What’s important to you when considering which gasoline you use? Versus – what benefits would be most important to you in other types of fuel?
And just for fun – describe your ideal sandwich. Versus – what does a great workday lunch look like to you?
There has been no shortage of books, articles, blogs, lectures, and other points of view put forth since 1960. But I agree with the Harvard Business Review – Thomas Levitt’s Marketing Myopia remains a classic. HBR has a copy of this article available for purchase.