Fallacy of The By The Theodore Levitt, in his article ‘Marketing Myopia’, published in the Harvard Business Review, talks about the strategy of doing business and marketing. Levitt is of the opinion that for a business to do better, focus should not be on selling products to customers. Rather focus should be on the customer needs and meeting those needs. According to the writer, most businesses that do not grow, or whose growth keeps declining have their problem rooted in focusing on the product and the production process rather than the consumer! His theory for majority of the business managers is simply… outrageous. Levitt tries to sell the theory to the very managers that he qualifies as failures for the lack of focus on the customers. Most theories of business would water down his arguments. Tailor making policies and shifting production to suit the customer is like having customers run the business. It is just impractical.
Levitt gives an example of the transport industry. He details that the railway has been replaced by other means of transport that meet the needs of the customers. The railroad, according to him, failed to meet the needs of the customer. He argues his case that I was because they had a wrong definition for their business. product orientation. Levitt’s argument was unwarranted and misinformed. The reason the railway was overtaken by other means of transport in my view is due to the technological advancements. If there is a new invention in the transport industry today and airplanes are phased out, will the reason be due to lack of focus on the customer? Not really.
Levitt goes on and on with the case studies of the theory. He makes mention of the movie capital of the world. Hollywood. He notes that the film industry has been overtaken by TV. His take is that TV entertains the customers while movies do not. There is no comparison between the two in reality. Television and film are two different entities in business. His argument is like saying that the canned food industry has beaten the beverage industry.
Levitt gives the nylon and glass-based companies as success stories of focusing on the customer not the product. He says they have both customer and product advantages that emanate from their excellent technical competence. They apply excellent technical competence to fulfill the customers’ needs. His example of a success story in his theory is just hilarious. The clientele for glass and nylon are mega-companies who specify the quality they want not retail consumers.
The feeble cases that Levitt has put across as case studies of his theorem and ideas are not those worth a serious outlook. His qualifications are wanting, misguided and biased. Arguing that Hollywood which has a turnover of billions in months has lost to the TV industry is a misconception. He overlooks the fact that with technological advancements, there is bound to be competition and new market definitions.
The writer argues intuitively that the success of a company is sometimes attributed to lack of competition. These companies have since gone under a shadow. Why is that? The dry cleaning companies have been replaced with other customer-friendly companies that discovered how to reduce the amount of dry cleaning required for clothes. The use of chemical additives and synthetic fibers is about to make dry cleaning obsolete. Another company that the writer examined is in the electric utilities. They have no competition, yet, they are not growing. This is because other companies are replacing electricity lines with a small cell electricity transmitter. Grocery stores, on the other hand, have been replaced with large chains of supermarkets. Levitt in this argument fails to understand that monopoly is not a guaranteed impetus to lack of customer care. Some of these companies fail to grow due to lack of new markets. For instance, an electricity company in the heart of Manhattan where there is 100% power connection cannot grow any further.
Levitt in his paper tries to sell an idea that is not ‘business like’. There is a line of truth in his argument but his approach and execution rules out the little trust the theory would gunner. Companies cannot produce goods defined by customers. It is simply impossible. Different customers have different needs and as such, if they were to be the factors of production, there would be mass confusion in the production line. Who knows, there could be customers who would want a pink Coca Cola or a rubber Toyota. Meeting all their needs would be hard.
Instead, the companies should focus on the product more. It is easier to use the traditional method where the product is manufactured on a general rationale with a general consumer group in mind then the customers adapt to the product. Instead of wasting resources tailor making the products to meet the customer’s needs (which are inexhaustible), they should invest in marketing the product to the consumers. The only consumer input should be the customer feedback which should be used to gauge progress and warrant changes.
Levitt’s argument all together to the modern world is not fully applicable. Business today grooms the product for the customer to get appealed and not the other way round. By the time he wrote the paper, perhaps the theorem could have worked (doubted) but it is just improbable today.
Levitt, T. (2004). Marketing Myopia. Harvard Business Review, pp 1-14.