Sunday, January 9, 2011

Marketing Myopia by Theodore Levitt (1955) - My Takeaway.

I am working my way through the book Harvard Business Review’s 10 Must Reads. (All in all a great read, however as always, it is frustrating that on the first page of the excerpt, there is no date. Some of these are very old and some aspects of the arguments and terminology – never mind examples- are dangerously dated.)

My takeaway from reading Marketing Myopia by Theodore Levitt is that I need to focus on ensuring the company is and remains marketing-minded.  I need to make sure that we are doing the things that will make people want to do business with us. This will entail personal diligence, processes, metrics and perhaps the need to add to the organization’s existing values in order to reinforce this.
If a business does stay marketing-minded, and focus on the output of customer-satisfactions, rather than products, then Levitt promises we should feel the ‘surging impulse of commercial mastery,’ and ‘entrepreneurial greatness’.  As you can imagine…I’m in.
Why does a company need to be marketing-minded?
Because, Levitt points out, what is for sale is really in fact determined by the buyer, not the seller.
What does Levitt mean by marketing-minded?
Marketing-minded means that the entire business process is thought to consist of 'a tightly integrated effort to discover, create, arouse, and satify customer needs'.  In brief, it means that the seller takes cues from the buyer. 
A marketing-minded company:
1.       Creates value-satisfying goods and services that consumers will want to buy;
2.       Accepts that buyers are 'unpredictable, varied, fickle, stupid, shortsighted, stubborn and generally  bothersome'. And, recognizes that while it is easier to drift towards focusing on the known and the controllable, the product and its development, this will not lead to long-term growth.
3.      Determines what the buyer would like to be offered in terms of the following:
a.       The product or service
b.      And, how,  in what form, when and under which conditions the product or service is made available to the customer. (Basically the 4Ps.)
4.      Focuses market research first and foremost on identifying what the buyer wants, not their preferences among products or services the company has already decided to offer buyers. (Of course Detroit auto-makers are his example of failures, where they carried out research the other way around.)
5.      Sets the price where you know you can sell, and then determines the cost, rather than the other way around. (Ford was in fact good at learning where to set the price, and the production line resulted as the means by which he could 'dig out' a profit at that price.)  Starting with a price you know buyers will buy forces innovation and efficiency in production and assures that the product will be marketable.
And, here are a few excellent quotes:
“Good marketing is the constant watchfulness for opportunities to apply the business’s technical know-how to the creation of customer-satisfying uses.”
“There is no such thing as growth industries, only companies that take advantage of growth opportunities.”
“If a company’s own research does not make its product obsolete, another’s will. “
And of course, he ends with explaining that it is all about corporate leadership. 
One quote I enjoyed greatly as it states the necessity of having a leader with a plan is as follows:
“If an organization does not know or care where it is going, it does not need to advertise that fact with a ceremonial figurehead. Everybody will notice it soon enough.”


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