Marketing Myopia

Levitt’s Classic Case

theodore-levitt

Ted "Tom Selleck" Levitt

Theodore Levitt wrote Marketing Myopia in 1960, a classic marketing read that is just as applicable today as it was 45 years ago. Levitt discussed how organizations must never forget what business they are in and used the old US railroad industry to illustrate his point (Levitt, 2004). Railroad companies thought they were in the business of making trains. They invested heavily in developing a faster, more powerful and more comfortable product for their market. But people don’t wake up in the morning saying, “I want to ride a train today.” Rather, they say, “I need to travel across the country today.” Thus, the railroad companies were not in the business of making trains; they were in the transportation business!

This myopic perspective prevented rail companies from seeing how cars or other means of travel actually represented opportunities for the industry, not competition. Levitt argued that their myopic perspective contributed to the eventual “death” of the US railroad industry as competition increased and rail companies failed to respond appropriately. If rail companies had a more open mind and embraced these opportunities instead of ignoring them, there is a good chance many would still exist today.

Don’t be the Next Railroad Company

Learning from this example requires us to evaluate our own business. It requires us to take inventory of our target market and ask ourselves what it really needs. Does our market really need a faster, more reliable widget with additional features? Or does it actually need an entirely different widget to satisfy their real need? This, of course, will depend on the product and the needs of the market. Perhaps the factors we once thought threatened our company’s viability actually represent profitable opportunities. And identifying those opportunities necessitates a step back for a more objective perspective about our business.

Source: Levitt, T., (2004). “Marketing Myopia”. Harvard Business Review. 82 (7/8), 138-149.

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