Marketing Myopia

Class 2

1/20/2014

For my first blog entry, I will be speaking about Marketing Myopia, and the effect it has had on the business world for the last several years.

So, what is "myopia" exactly? 

In class we talked about the formal definition, which was a condition in which the visual images come to a focus in front of the retina of the eye resulting especially in defective vision of distant objects, aka nearsightedness.

For our practical use, we’ll say it’s the inability of management to exercise foresight.

Some examples might include:

Railroads and Hollywood. Owners of railroads thought they were in the “railroad business” not the “transportation business.” A similar idea comes from Hollywood. People used to think they were only in the “movie industry” when in reality they were in the “entertainment industry.”

Modern Parallels? 

Home landline vs. cell phone. Sony thinking of themselves as just the record or cd company, when they should have been thinking about mp3s. Best Buy and Macy’s were all brick and mortar until eventually they absolutely had to go to the web.

The bottom line to all of these examples is that businesses, specifically upper level management, needs to be CUSTOMER focused, and not PRODUCT focused.

So why do companies miss the mark on this?

They use the notion of, “don’t break it if it’s not broken.” They also are fooled by a few myths:

1.       Population Myth: The belief that profits are assured by an expanding and more affluent population

2.      Product Improvement Myth: You change the same product just a little bit but aren’t giving the people what they want. You can make small improvements but aren’t really dynamically changing it for the better.

Seabring example

Henry Ford and Mass Production: His real genius was marketing. We think he was able to cut his selling price and therefore sell millions of $500 cars because his invention of the assembly line had reduced the costs. Actually he invented the assembly line because he had concluded that at $500 he could sell millions of cars. Mass production was the result, not the cause, of his low prices.

Thus, we should debunk another myth

3.      Cost Reduction Myth: The belief that profitable margins will continue to grow based on decreasing costs

That sums up my thoughts for now! Stay tuned for more as I finish up my critique on Theodore Levitt’s essay and more modern day examples on Marketing Myopia.