Marketing Myopia - Summary

Every major industry was once a growth industry but what is required for sustained growth of a
business is the ability to define itself broadly and to carefully gauge their customer’s needs.

Some examples of myopic leadership could be - Railroads as they stayed railroad-oriented instead of
being transportation-oriented; Movie studios for losing ground to TV by being product oriented
(making movies) rather than customer oriented (providing entertainment). On the flip side are
companies like DuPont and Corning who continue to succeed in their respective industries of nylon
and glass by, in addition to product and research focus, thorough customer orientation and constant
watchfulness for opportunities to apply their technical expertise to the creation of customer-
satisfying needs.

➢ Shadow of Obsolescence

There are many instances of a celebrated industry with seemingly unchallenged superiority of
product without any effective substitute being decimated.

o Dry Cleaning – competition from chemical textile additives/ultrasonic

o Grocery stores – substituted by supermarkets
o Electric utilities – Nonutility companies’ advancement in developing alternatives

➢ A Self-Deceiving Cycle

There is no such thing as a growth industry. There are only companies organized and operated to
create and capitalize on growth opportunities. The history of every dead or dying “growth” industry
shows a self-deceiving cycle of bountiful expansion and undetected decay. The following 4
conditions usually lead to this cycle.

1. Population Myth

The belief that an expanding and more affluent population assures profit can be detrimental to
growth. An example would be petroleum industry. They continue to define their chief product in
narrowest possible terms – gasoline not energy or transportation and focus their efforts on
improving the efficiency of production not on improving the generic product or its marketing.

2. The Idea of Indispensability

Petroleum industry wishfully thinks by assuming their products do not have any competitive
substitute. It has been miraculously saved by innovations and developments not of their own
making. Initially crude oil was largely a patent medicine. Before that fad ran out, demand
expanded by use of kerosene oil in lamps. Industry was saved from invention of incandescent
lamp by growing use of kerosene in space heaters. Coal based central heating made them
obsolete but the disaster was averted by invention of IC engines and central oil heaters. Later
natural gas emerged as its competitor in many sectors but instead of being at the forefront of its
advent owing to their expertise in handling, pipelines & transmission and ownership of gas fields
they denied accepting it and let a multi-billion-dollar industry slip to others.
3. Production Pressures

Most companies find irresistible the prospect of steeply declining unit cost as output rises and
spectacular profit possibilities. This usually leads to neglect of marketing.

Automakers of Detroit were convinced that people didn’t want anything different from what
they had been getting until it lost millions of customers to other small car manufacturers. They
were fervent adopters of mass production but failed to understand customers by not
researching their wants but only preference between the kind of things it had already decided to
offer and not owning retailing and servicing ends which are the primary touchpoints.

➢ Product Provincialism
In a “growth” industry, the apparently assured expansion of demand tends to undermine a
proper concern for marketing and customers resulting in decline rather than growth of
industry. A classic example would be buggy whip business. No amount of product
development could have prevented its demise unless the industry had defined itself as being
in transportation business rather than buggy whip business. Survival always entails change.

➢ Creative Destruction
Management must make a conscious effort to break itself loose from conventional ways. It is
too easy to let its sense of purpose become dominated by the economics of full production
and to develop a dangerously lopsided product orientation. For example, alternative energy
companies are riding a wave of inevitability as they are satisfying a powerful customer need
of doing away with frequent fuel refilling and dread of gas stations. The historic fate of
growth industries has been its suicidal product provincialism.

4. Dangers of R&D

When top management is wholly transfixed by the profit possibilities of technical research and
development it poses a threat to the sustained growth of companies.

➢ Marketing Short-changed
Taking up the example of electronics industry, firms owe their eminence to focus on
technical research but their expansion has been aided by the virtually guaranteed market of
military subsidies and strong general reception of new ideas. In such cases, industry
develops the philosophy that continued growth is a matter of continued product innovation.
Another factor is when products are highly complex, managements become top-heavy with
engineers and scientists who like to deal with controllable variables like machines and
production lines, creating a selective bias towards R&D at the expense of marketing.

➢ Stepchild Treatment
In case of oil companies, they are forever trying to come up with new advertising themes,
more effective sales drives, finding out market shares of various companies or what people
like or dislike about service station dealers instead of probing deeply into the basic human
needs. Basic questions about customers and market seldom get asked. They are recognized
as existing, as having to be taken care of, but not worth much thought or effort or attention.
 ➢ The Beginning and End
The realization that an industry is a customer satisfying process, not a goods producing
process is vital. It begins with the customers and his or her needs, not with a patent or
selling skills. Given the customer needs, the industry develops backwards –
o Physical delivery of customer satisfaction
o Creating things by which these satisfactions are in part achieved
o Finding the raw materials necessary for making its products

The Visceral Feel of Greatness

A company must do what survival demands but mere survival is not enough. The trick is to survive
gallantly; not just experience the sweet smell of success but to have the visceral feel of
entrepreneurial greatness. To achieve this, an organization must have a leader with drive to succeed,
vision of grandeur and ability to attract eager followers vis-à-vis customers. Organizations must learn
to think of itself not as producing goods or services but as buying customers, as doing the things that
will make people want to do business with it.