Marketing Myopia

What was one of the most influential marketing ideas of the past century?

Businesses will do better in the end if they concentrate on meeting customers’ needs rather than on selling products.

What does sustained growth rely on?

It depends on how broadly you define your business and how carefully you gauge your customers’ needs.

What is the reason growth slows down in certain companies?

It is not because the market is saturated, it is because there has been a failure of management. The executives are responsible for it.

What make a company successful besides customer orientation?

. It is constant watchfulness for opportunities to apply their technical know-how to the creation of customer-satisfying uses that accounts for their prodigious output of successful new products. Without a very sophisticated eye on the customer, most of their new products might have been wrong, their sales methods useless.

What are the four conditions of the self-deceiving cycle?

The belief that growth is assured by an expanding and more affluent population. The belief that there is no competitive substitute for the industry’s major product. Too much faith in mass production and in the advantages of rapidly declining units costs as output rises. Preoccupation with a product that lends itself to carefully controlled scientific experimentation, improvement and manufacturing cost reduction.

Belief that profits are assured by an expanding and more affluent population.

An expanding market keeps the manufacturer from having to think very hard or imaginatively. If thinking is an intellectual response to a problem, then the absence of a problem leads to the absence of thinking. If your product has an automatically expanding market, then you will not give much thought to how to expand it.

What is marketing myopia?

The tendency for a company to define its business too narrowly arounds its product rather than the customer need it satisfies.

What is the difference between product orientation and customer orientation?

Product orientation focuses on producing and improving the product, customer orientation focuses on understanding and satisfying customer needs.

Why did the railroads decline?

They defined themselves as being in the railroad business rather than the broader transportation business.

Why did Hollywood initially view television as a threat?

Because it was product-oriented and saw TV as competing with movies instead of seeing it as an opportunity to expand entertainment.

Why were DuPont and Corning successful?

They combined technical competence with strong customer orientation and continually looked for customer-satisfying uses for their technology.

What is the “Population Myth”?

The belief that an expanding and wealthier population automatically guarantees continued growth for an industry.

What is the second condition in the self-deceiving cycle?

Believing that there is no competitive substitute for the industry's major product.

What is the third condition?

Excessive faith in mass production and declining unit costs.

What is the fourth condition?

Becoming preoccupied with a product that can easily be scientifically experimented on, improved and manufactured more cheaply.

What do the four conditions ultimately produce?

A self-deceiving cycle of growth followed by unnoticed decay and eventual stagnation/decline.

What does selling focus on?

The needs of the seller and converting the product into cash.

What does marketing focus on?

Satisfying customer needs through the product/service and everything involved in creating, delivering and consuming it.

Why is marketing more than selling?

Because marketing begins with understanding customer needs and involves the entire process of discovering, creating, delivering and satisfying those needs.

How did the petroleum industry narrowly define its product?

Primarily as gasoline, rather than the broader needs of energy, fuel or transportation.

Why can mass production become dangerous?

It can cause management to focus on producing more cheaply rather than understanding what customers actually want.

Why can too much R&D become dangerous?

It can create a product/technology orientation where management assumes continued technical improvement will automatically produce continued growth.

What does “the product will sell itself” mean?

The mistaken belief that a technically superior product automatically creates demand without strong attention to customers and marketing.

What is creative destruction

Deliberately replacing or destroying an existing profitable product/business model before competitors or new technologies make it obsolete.

Why might a company need to destroy its own successful product?

To ensure it continues satisfying customer needs even when those needs can be satisfied better through a new technology or product.

What should a company ultimately think of itself as?

A customer-creating and customer-satisfying organisation.

Where should an industry begin when defining its business?

With the customer and their needs, not with the raw material, technology or product.

What does a customer-oriented company do when customer needs change?

It adapts its products, services and business model to continue satisfying those needs.

What is the biggest enemy of long-term growth according to Levitt?

Complacency and narrow product orientation.

What does Levitt believe companies need in order to achieve greatness?

Strong leadership, a broad vision of the business, and an organisation-wide commitment to creating and satisfying customers.