Prometheus Siddiqui :
Starting from the marketing theories influenced by classical and neo-classical schools of economic thought till the ones that were prevalent up to the first half of the 20th century, focus was on the commodity being sold. However, that was simply taking the matter at face value. Marketing is a broader discipline, more like a societal system whose boundaries are not limited to being a channel for making higher profit. The famous American economist Theodore Levitt in 1960 pointed out that firms were defining their markets too narrowly, as a result of which many prominent industries faced decline. It was a case of falling prey to the notion of marketing myopia (shortsightedness). Firms needed to broaden their goals to include consumer needs as opposed to just upholding vested interests of the business. Having acknowledged this, companies plunged in to diverting the spotlight towards consumers. Half a century later it is being realized that this in itself has led to a new for marketing myopia.
There were a number reasons why firms tended to be short sighted. It was believed that the prospect of a growing market was positively correlated to population growth (which was clearly not the case). Furthermore, it was perceived that mass production would lead to falling costs making products more affordable thus more marketable. There was little regard for competitive substitutes and over dependence on research and development. With falling sales companies began realizing the inherent flaws in their comprehension of market dynamics. To overcome this companies began to pay more attention to customer and their inclinations. And the lessons have indeed helped businesses take great leaps. Today companies like Nissan and Mitsubishi have come up with substitutes (electric car) of their own prevalent products (fuel powered cars) simply because of the change in consumer preferences. They have indeed taken significant risks with their predominant product line but also created new markets with innovative products. To add to it, prioritizing customers has driven industries to come up with new ways of reaching out to them. Contemporary marketing practices include using new technology channels and thorough understanding of consumers preferences.
Nonetheless, marketers have been paying too much attention to Levitt’s proposition and over indulged themselves in trying to please the customer. Some fragments of criticisms include, the inability of marketers to put due emphasis on the society as a whole and not taking into account all stakeholders and not acknowledging their importance. There have also been failures in capturing issues beyond the target customers and the sort of impact they have on the overall ecosystem. All of this stemmed from lack of engagement by firms in a boarder scale. Academics and practitioners have suggested corrective measures that include taking pre-emptive steps to understand the holistic needs of consumers, identifying all stakeholders and engaging with them, chalking out issues that are relevant to mutual interest and rolling out an orientation process to bridge any gaps. Simply put, the society needs to be told that businesses are not only out to sell their products and services but are there to be a part of it and work for its betterment.
Even though firms have attained great levels of comprehension on the ill effects of being narrow in their vision even in the past two decades prominent businesses have struggled for being myopic. Eastman Kodak is a notable case. This company was a market leader in imaging solutions and services and devoted significant resources in research and development. However, it failed to keep up with innovation and was complacent to competition (digital photography and photographic equipments) and thus its products and services lost market share. The music player ‘Walkman’ by Sony is another example. With the turn of this new millennium when music was no longer being played in tapes and compact discs, devices such as Apple’s IPod (and most recently smart phones) took over. Sony’s spotlight was on sales as opposed to the right marketing and redesigning the product. The end result was the fall of a once great product. Furthermore, looking at the coffee roasting company Splendid (which was owned by Proctor and Gamble). The company knew how to make good quality coffee for both USA and Italy (its home market) but it lost out to Starbucks, simple because the later delivered a wholesome customer experience.
The reason for marketing myopia to still persist may be characterized by a number of reasons. To begin with, customer always like the added attention from marketers and flock to those who provide it. As result companies go on putting the highest priority to them. Then there is the fact companies are not able to look at the world, society and consumption in the right way. There is a lack of holistic approach by the marketing management practice which leads firms to become short sighted. Furthermore, many companies understand competition very well but are not able to act on it. They try and out compete rivals with product alone, but at times adopting the best practice of competitors can make a major difference. In today’s world, customers do not pay for a product or a service but they pay for the experience of it, because at the heart of it lies the idea of maximizing utility.
It has to be accepted that products and services are evolving and marketing strategies are changing fast. The aim is to make intelligent decisions by assessing market dynamics. Companies must be open to innovation, competition and be conscious of the eco system as a whole to attain and retain vantage point. Overcoming the short sightedness and looking at the bigger picture is of the utmost essence, even if a product or a service seems viable now if the right strategies are not adopted the status quo in the market will change.
(Prometheus Siddiqui is a Graduate Student, Victoria University, Sydney and Graduate Accountant, Keshab Chartered Accountant, Australia. Email: [email protected] )
