A critical discussion on marketing myopia

George Gkoutzouvalos
Oct 22 · 9 min read
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Comparing marketing myopia with physical myopia
When Theodore Levitt coined the term “marketing myopia”, he used the word myopia to describe a business situation, where a company has myopic, i.e. faulty vision with regard to the actual situation, and the relevant course of action that should be taken or adopted to correct this vision.

This short definition did not include any investigation or explanation of the actual mechanism that causes eye myopia (near-sightedness). Therefore, there is room for further analysis by attempting to make a comparison between marketing myopia and physical myopia.

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HBR’s 10 must reads on strategic marketing (with featured article “Marketing myopia” by Theodore Levitt)

In many ways, marketing myopia has many similarities with physical myopia. The main similarity is due to the fact that both types of myopia are caused by loss of focus.

Therefore, in physical myopia, the eye fails to focus an image on the retina, while in marketing myopia, a company fails to focus its marketing efforts on a profitable area of activity, and instead, it orients its efforts and vision on irrelevant, unprofitable, and even loss-generating products, market segments, promotional methods and approaches, etc.

Similarly to physical myopia, where, although a patient can see objects that are near to him or her, he or she finds it difficult to see and recognize things in a distance, companies suffering from marketing myopia literally can’t see the wood for the trees. As a result, these companies make a huge waste of effort, missing other more profitable opportunities that may exist, at the same time.

In spite of the fact that, in a number of cases, physical myopia is due to specific genes, it can be the result of a living style that favors stay-at-home activities, such as reading, using the computer, etc., rather than activities that take place outdoors. Likewise, when a company adopts an introvert approach, it loses contact with consumers and also risks losing its actual customer base, developing a myopic approach, at the same time.

When physical myopia is not due to genetic factors, it results from a way of living that puts stress on the eye over time. Similarly, and in contrast to what is commonly held, marketing myopia does not happen overnight. On the contrary, it is a process of small failing signs that are ignored and slowly accumulate with time, leading to the point where no action can be taken to resolve the problem, because it’s too late.

Undoubtedly, medicine is a constantly evolving science, and the same applies to business management. As a result, a company that has a marketing myopia problem is not very different to an actual patient with physical myopia, and since the best course of action that the latter can take is to visit a specialist eye doctor, the same should be done by a company, in order to get advice and help on how to correct the problem, i.e. its myopic vision.

Certain types of corrective measures can and should be taken at an early stage. Similarly to physical myopia, the sooner is marketing myopia diagnosed in a company, the sooner and more effectively it can be treated and cured, through the assistance of marketing and management professionals, helping the company to take its destiny in its hands and adopt a different approach that will save it from going down.

Another point that should be stressed is the level and effectiveness of communication that is implemented in a specific company, and it would not be an exaggeration to say that an effective network of internal communication within a company can help it in keeping any marketing myopia issues at bay. The role played by internal communication within a company is similar to the role played by the nervous system in transmitting the signal from the retina, where the eye focuses the image, to the brain, in order for it to be processed. Therefore, if problems, even minor ones, are not reported as early as possible and are kept ignored, chronic and uncured marketing myopia will develop sooner or later, with devastating and irreparable effects.

Not to say that, similarly to diseases that are concomitant or subsequent to physical myopia, such as glaucoma and cataract, marketing myopia is not free of side effects, as well, since it can cause major disruption to the company’s overall operation and the activities that are carried out by the company’s various departments.

Sadly, in an era of such a tremendous and instant availability of a wealth of information, marketing myopia is still a real issue that occurs in the business world, perhaps due to the fact that many companies insist on adopting old-fashioned and outdated marketing approaches that are actually based on myopic vision.

The opportunity cost of marketing myopia

Since marketing myopia is a chronic disease, as is physical myopia, its impact on a company is not limited to a specific period of time, but it is rather spread over the entire life cycle of a company’s operation. As a result, its cost is very high in the long run, to the point that it can cripple down a business.

It could be argued that this type of cost is the result of a company’s faulty, inefficient, and unprofitable operation, which is, of course, true, although this simplification fails to provide a more insightful explanation of why a company operates at a high cost and generates losses.

The concept of opportunity cost could provide a deeper explanation in that direction. Opportunity cost is a “hidden” cost, in the sense that it is not readily evident, as is the cost of purchase of raw materials, for example. On the contrary, opportunity cost can be estimated on the basis of making a comparison between employing different types of production resources and methods to attempt to exploit different market opportunities. Directing a company’s full efforts and resources towards the production of a specific product or service for a specific market, can deprive a company of the opportunity to use its resources and efforts more effectively and efficiently, by trying to launch a different product or service, or penetrate a different market.

This type of cost, although “hidden”, is very real, and actually, this analysis shares many common things with the analysis of the marketing myopia phenomenon.

Therefore, the damage that a company does to itself, as a result of its myopic approach to the market, is not very different to the damage that is caused, when a company continues to ignore the opportunity cost that it pays in the long run.

I believe that this argument is also in line with the critical question that was asked by Theodore Levitt in his seminal article: “What business are you in?”, which was published in Harvard Business Review, when he taught at Harvard Business School back in 1960.

An entrepreneur’s ignorance of the business that he or she is in also implies his or her ignorance of how else he or she could better use his or her company’s resources to attempt to sell products or services to a different market, that his or her company could have the ability and capacity to serve profitably.

In other words, if an entrepreneur lacks or ignores the required knowledge to estimate the relevant opportunity cost that is involved in the conduct of his or her business, he or she is prone to develop a myopic vision of the market.

Some examples of marketing myopia in the UK supermarket industry
In recent years, a major characteristic of the supermarket industry has been the advent of discount chains, such as Lidl and Aldi, which has brought about a strong shift in the market.

Long-established supermarket chains have faced fierce competition from those “super discounters” to the point that the former’s very existence is threatened, with many big names in the supermarket sector disappearing from the market, as a result of their inability to cope with such a strong competition.

However, in this case, as well, the mere fact that these well-established familiar names in the grocery industry didn’t see disaster coming is just another case of marketing myopia.

Because, not that long ago, in the UK, for example, supermarket giants, such as Tesco, Asda, Morrisons, and Sainsbury’s (maybe I miss a name or two) were engaged in a price war, as a result of their narrow-sighted approach, which was based on the assumption that consumers considered price as the only factor when doing their shopping.

In this way, they failed to recognize the existence of potential opportunities that waited to be discovered by those brave, adventurous, and risk-taking supermarket bosses and managers who could adopt an innovative and differentiated approach that would not rely solely on price.

After all, the supermarket chains that now complain about the dominance of the market by hard discounters were the same ones that actually introduced price-cutting strategies to dominate the market just a few decades ago. However, it looks like their long-term planning didn’t stand the test of time, perhaps, due to the fact that cutting their prices and offering discounts was not the result of real innovation in their supply chain, for example, which has been an area of major focus for firms like Aldi and Lidl.

Therefore, it is doubtful whether those “traditional” supermarket chains have actually managed to answer effectively and efficiently the all-important question that was asked by Levitt in 1960, i.e. “What business are we in?”, because if they had successfully done so, they wouldn’t have been defeated by Lidl and Aldi in their own ground. On top of that, it should be stressed that this question could be answered differently, let’s say, in the 1980s or 1990s, than in 2019.

It wouldn’t be an overstatement to say that supermarket chains like Tesco and Asda were hit by the same form of marketing myopia that caused the demise of the old grocer’s shop and the corner shop (convenience store); this time, it was Lidl and Aldi that paid them back with same coin. However, and don’t get me wrong, the market constantly evolves and changes, and Lidl and Aldi should not rest on their laurels, otherwise they would face the same risk and become the next victim of marketing myopia.

Even hard discounters make mistakes and their methods and techniques are not perfect, and the fact that they have found the right mix to offer their products to consumers at unbeatable prices, while they still manage to make a profit, may not prove to be an equally successful strategy, let’s say, in ten years’ time; marketing myopia is lurking around the corner, and they should always keep an open eye due to unexpected market shifts.

Perhaps, the size of a company plays a key role regarding whether that specific company will develop marketing myopia, or not, and the numerous examples of companies across various industries and sectors, which fell victims of marketing myopia, support this assumption.

Therefore, when a company is still small, it can focus its efforts better, in order to serve its market efficiently, which means that it can identify more accurately the area of its business, i.e. it can answer Theodore Levitt’s critical question much more effectively and with more confidence.

On the other hand, an increase in the size of a company may have certain benefits, such as enabling the company to take advantage of economies of scale; however, it can also hide other risks, one of which is the danger of developing a myopic marketing approach.

Growing in size almost inevitably means the applying control to the company’s operations becomes a more challenging task for its managers, which may result in a loss of focus and direction.

Similarly, appealing to a larger market may also cause loss of focus, since it becomes increasingly difficult to accurately identify customer needs and serve them effectively.

In the following video, you can watch Theodore Levitt who coined the term “myopia” talking about global market markets back in 1994:

Personally, and although we currently live in the era of globalization that favors large-scale business, both horizontally and vertically, I believe that a single-product producer or retailer could prove to be a more efficient economic model in the long run, and I can testify to that, because I know of a local patisserie (a traditional family business) that has kept making and selling exactly the same product and using the same recipe for many decades, with unprecedented success, which has much to do with their insistence to focus and serve well a small and loyal market. In exchange, this small patisserie has never suffered from marketing myopia, and it never will, because it knows its limits, it is not greedy, and leaves room for other patisseries to sell their own products and make a living in a sustainable market, as well.

Sources:
Facts about myopia
What is marketing myopia — Definition
Theodore Levitt
Marketing myopia

Further reading:
A refresher on marketing myopia
The new marketing myopia
“Marketing myopia” myopia
What is marketing myopia? Definition and examples


Originally published by me at my blog: https://styles-of-management.blogspot.com.

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George Gkoutzouvalos

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Hi, I am a translator and always looking for informative to read and possibly write about

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