In short
Marketing myopia—why companies fail by focusing on selling products instead of resolving customer needs, and how to redefine “what business are we really in?”
Guest backgrounds
No guests mentioned in the transcript.
Key claims
About 30,000 new consumer products launch annually and 90% fail; Theodore Levitt’s “marketing myopia” explains the failure pattern. People buy outcomes (“a quarter-inch hole”), not products (“a quarter-inch drill”). Firms must continuously ask what business they’re in, accept replacement of current offerings, and create new offerings that satisfy needs faster than competitors.
Notable examples
Railroads declining by treating themselves as “rail” rather than “transportation”; oil and gas firms risking obsolescence by still focusing mainly on petroleum instead of alternative fuels.
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Chapters
Tap a time to open that second in VOUnderstanding Marketing Myopia
0:00 to 0:28
Learn about marketing myopia and how businesses can refocus on consumer needs.
Understanding Marketing Myopia
0:30 to 3:01
Learn about marketing myopia and how businesses can refocus on consumer needs.
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Transcript
Automatic transcript. May contain errors.0:28This episode is brought to you by Google Chrome. of America for a reason. With SUVs made to move with your rhythm. The versatile Equinox tackles your entire day. The spacious Traverse fits your crew and your whole weekend. And tracks bring style with value you can count on. All infused with tech that has your back. So your drive always hits the right chord. Chevrolet. Together let's drive. Every year, some 30 ,000 new consumer products are launched, and 90 % of them fail. A key reason is what the late Harvard Business School professor Theodore Levitt famously termed marketing myopia, a nearsighted focus on selling products and services rather than seeing the big picture of what consumers really want.
1:17As he used to tell his students, people don't want to buy a quarter-inch drill. They want to buy a quarter-inch hole. The railroad lines are a classic case study. They fell into a steep decline because they thought they were in the rail business, rather than being providers of transportation. Instead of branching out into cars, trucks, or airplanes, they let other companies steal away their passenger and freight traffic. Or take oil and gas companies. They've belatedly started to think of themselves as energy providers, but they still devote most of their resources to petroleum. If they fail to develop alternative fuels, they risk becoming companies without an industry.
1:58Many others have made, and continue to make, the same mistake. Organizations invest so much time, energy, and money in what they currently do that they're blind to the future. They get lulled into thinking they're in a growth industry, rather than continuously capitalizing on growth opportunities. To avoid the same fate, leaders should ask themselves, what business are we really in? They need to understand that the goal isn't to sell things, it's to satisfy customers, and accept the fact that most existing products and services can and will be replaced by competitive alternatives. Then they can identify new offerings that meet consumers' needs sooner than any existing or potential competitor.
2:42That's the cure for marketing myopia.
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From the publisher
The Explainer: Don’t Just Sell Stuff — Satisfy Needs
24 Jul 2019
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Theodore Levitt's classic theory says that an industry is a customer-satisfying process, not a goods-producing process.
An industry begins with the customer and his or her needs, not with a patent, a raw material, or a selling skill. Given the customer’s needs, the industry develops backwards, first concerning itself with the physical delivery of customer satisfactions. Then it moves back further to creating the things by which these satisfactions are in part achieved.
How these materials are created is a matter of indifference to the customer, hence the particular form of manufacturing, processing, or what have you cannot be considered as a vital aspect of the industry. Finally, the industry moves back still further to finding the raw materials necessary for making its products.
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