Marketing Myopia EssayThe marketing concept consists of elements that concern market segmentation and how it relates to target markets. Also, recall that promotion is used to reach those target market

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Marketing myopia: An integrated view

Richard, Michael D; Womack, James A; Allaway, Arthur W.

The Journal of Product and Brand Management; Santa Barbara Vol. 2, Iss. 3, (1993): 49.

Marketing myopia was initially described as a firm's shortsightedness or narrowness when attempting to define its

business. The types of marketing myopia can be classified along 2 dimensions: 1. the management's definition of

the firm, and 2. the firm's business environment perspective. The combination of the 2 dimensions produces a

matrix with 4 types of firms: 1. classic myopia, with a product-definition/single-industry perspective, 2.

competitive myopia, with a customer-definition/single-industry perspective, 3. efficiency myopia, with a product-

definition/multi-industry perspective, and 4. innovative myopia, with a customer-definition/multi-industry

perspective. Marketing managers who wish to achieve the innovative firm orientation should: 1. take a generic

view of their firm or industry, 2. monitor other industries, 3. engage in benchmarking to determine the objectives

for relevant areas of marketing, 4. recruit marketing people, and 5. be flexible enough to apply unique solutions

to problems.

FOUNDATIONS OF MARKETING MYOPIA

Marketing myopia was initially described as a firm's shortsightedness or narrowness when it is attempting to

define its business (Levitt, 1960). Marketing myopia is analogous to product orientation, whereby the firm defines

itself as a product producer. One alternative is customer orientation (i.e., the marketing concept), whereby the

firm defines itself as a satisfier of customer wants and needs; that is, the customer orientation helps the firm to

anticipate and adapt to changes in customer demand (Levitt, 1960). Customer orientation has also been considered as a type of marketing myopia. Firms overemphasize the

satisfaction of customer wants and needs and as a result ignore competition. Competitor orientation has been

proposed as a replacement for the customer orientation; with this orientation, a firm's strategy is influenced by its

competitors (Oxenfeldt and Moore, 1978).

Manager tenure has also created a type of marketing myopia. Some marketing managers possess too narrow a

perspective as a result of spending their entire career in a single industry (Lovelock, 1983). This myopia fosters

the erroneous mindset that each industry is unique. It restricts the firm's ability to learn from the experiences of

firms in other industries facing parallel problems and opportunities.

Marketing strategies transcend industry boundaries (Lovelock, 1983). Firms can solve marketing problems and

exploit opportunities by looking beyond immediate competitors for strategies. A broader perspective can result in

cross-fertilization of ideas and, in turn, produce innovative marketing strategies (Houston, 1986).

DIMENSIONS OF MARKETING MYOPIA

The preceding discussion suggests the need for a systematic way in which to classify the types of marketing

myopia. The types can be classified along two dimensions. The first concerns management's definition of the firm.

Firms can be narrowly defined by the type of product produced. Such firms are inwardly oriented. For example, a

firm can be defined as a cold breakfast-cereal firm,

Firms can be more broadly defined by the nature of the customer wants and needs which they satisfy. These firms

are outwardly oriented toward the market. Thus a firm can be more broadly defined as a breakfast foods firm.

The second dimension concerns the firm's business environment perspective. In essence, these firms have an

inward orientation toward that industry. Firms with a single-industry perspective are preoccupied with the actions

and reactions of immediate competitors. In addition, they are considered to have inbred management. Some

managers have spent the greater part of their professional careers in one industry. Inbred management is not

necessarily undesirable, but it is potentially detrimental when it fosters the contention that it can learn nothing

from firms in other industries, and it keeps its firm perceptually insulated from such other firms. For example,

managers of the cold breakfast cereal firm may be concerned only with the actions and reactions of other cold

cereal firms.

Firms with a multi-industry perspective, on the other hand, have a broader view of the market. While they are

concerned with immediate competitors, they also realize that firms in other industries can serve as sources of

innovative strategies as well as being potential competitors. Such management is said to be cross-bred, in that

managers may have experience in a broad range of industries or they are willing to learn from firms facing similar

situations in other industries. Firms with a multi-industry perspective are outwardly oriented and not perceptually

insulted from other industries.

These dimensions provide the manager with a way to consider systematically the types of marketing myopia.

The combination of the two dimensions produces a matrix with four types of firm:

(1) Classic myopia with product-definition/single-industry perspective.

(2) Competitive myopia, with a customer-definition/single-industry perspective.

(3) Efficiency myopia with a product-definition/multi-industry perspective, and

(4) Innovative, with a customer-definition /multi-industry perspective.

While the dimensions are depicted as dichotomous, they are actually continuous. A given firm may not always fall

clearly in the center of one of the four types, but may be positioned anywhere within the matrix depending on the

degree if commitment to any of the dimensions. These scenarios are presented in Figure 1. (Figure 1 omitted) CLASSIC MYOPIC FIRMS

Classic myopic firms are those which are associated with a product-definition/single industry perspective. These

firms are narrowly defined by their product and so do not practice the marketing concept. They possess a single-

industry perspective, being concerned only with the actions and reactions of immediate competitors. Management

is inbred, and since managers consider their industry to be unique, they are unwilling to learn from firms in other

industries. Because of the lack of cross-fertilization of ideas, firms with this type of marketing myopia are limited

in their strategic alternatives.

A&P serves as a prime example of the classic myopic firm. A&P's management defined the organization by the

type of product sold (groceries). This definition led to the decision not to add highly profitable nongrocery items

as competitors did. The wants and needs of the consumer were also ignored. Consumers increasingly desired such

features as national brand merchandise, a delicatessen, a seafood section and extended hours. While A&P resisted

these changes, other grocers were pleased to offer these features. In essence, A&P failed to practice the

marketing concept.

A&P also had a single-industry perspective. While other grocers looked to different industries for distribution

expertise (e.g., computerized warehousing), A&P adhered to outdated methods of distribution. When faced with

extinction, A&P applied "grocery solutions" to the problem: it engaged in aggressive price-cutting to attract

customers. However, this strategy proved unsuccessful.

Elgin Watch is another example of the classic myopic firm. Elgin defined itself as a producer of fine, traditionally

styled, manually-wound watches. Elgin was not aware of the changing consumer tastes for watches, the fact that

consumers increasingly desired low-priced and convenient (ie., self-winding) watches.

Elgin Watch also had a single-industry perspective. It was taken by surprise by a new class of competitor entering

the market. The semiconductor manufacturers were seeking applications for digital watches. They captured a

large share of the market by offering the consumer low-priced, self-winding watches. In addition, they employed

new channels of distribution (mass merchandisers and discounters) which had been overlooked by Elgin.

COMPETITIVE MYOPIC FIRMS

Competitive myopic firms are analogous to a compromise between customer and competitor orientations. These

firms are associated with a customer definition/single industry perspective. They are defined by the customer

wants and needs which they satisfy, and so they practice the marketing concept. In addition, they have a single-

industry perspective, being concerned only with the actions and reactions of immediate competitors. Managers

are also inbred, adhering to the notion of the uniqueness of their industry. Therefore they are not willing to learn

from firms facing parallel situations in other industries. As a result, there is no cross-fertilization of ideas.

While these firms practice the marketing concept, they lack relativity in strategy. Therefore, such firms are limited

in their strategic alternatives. They tend to think in terms of acceptable businesses or expansion for the industry

they are in and they are likely to mimic similar firms' marketing actions. Line extensions and "me-too" products

are popular strategies for this type of firm. Schlitz Brewing is an example of the competitive myopic firm. It did

practice the marking concept with its customer definition as is evidence by the introduction of a myriad product

extension (e.g., light beer and premium-priced beer).

When Philip Morris purchased Miller Brewing, tobacco executives were brought in to run the ailing brewing

company. This infusion of talent was responsible for the introduction of a host of marketing strategies to the

brewing industry (e.g., product segmentation, target market advertising, and efficient distribution). These ideas

were also embraced by Anheurser-Busch. As a result the market share of both soared. In contrast, Schlitz, which

had a single-industry perspective, did not adopt the sophisticated marketing techniques and, as a result, its

market share was cut in half within five years.

EFFICIENCY MYOPIC FIRMS Efficiency myopic firms only partially embrace the innovative firm idea (Lovelock, 1983). They are those firms

which are associated with a product-definition/multi industry perspective; they do look to other industries as

potential competitors and as sources of solutions to problems. Managers are cross-bred and their experience in

other industries, or their acceptance of the notion of similarities between industries, contributes to their

willingness to learn from firms in other industries. As a result of cross-fertilization of ideas, these firms have more

strategic alternatives than the previous two myopic types. However, rather than looking to other industries for

marketing solutions, these firms, concerned with improvements in production efficiency, borrow only technological

innovations. Their marketing managers assume that consumers desire less expensive and/or more efficient

versions of existing products, and so are apt to introduce new and improved versions of existing products.

General foods serves as a prime example of an efficiency myopic form. While very successful in food processing,

General Foods did not achieve success in the fast-food restaurant business with its purchase of Burger Chef.

Management defined Burger Chef as a fast-food hamburger restaurant. As a result of this product definition,

Burger Chef lost market share to competitors which introduced such items as fish sandwiches, chicken products,

and a salad bar. General foods did possess a multi-industry perspective and attempted to apply food processing

skills to fast-food restaurants. Unfortunately, the multi-industry perspective did not offset the problems associated

with product definition.

Recent woes at IBM demonstrate the problems associated with an efficiency myopic firm (Loomis, 1991). IBM has

defined itself by its product (computers). While Japanese computer firms deployed systems engineers to assist

customers in developing software (and gained valuable customer information in the process), IBM declined to

provide this service. The Japanese have used their knowledge of customer needs to capture market share in the

mainframe computer market.

While IBM's expertise was in the mainframe computer market, it proved that it had a multi-industry perspective.

As a late entrant to the PC market, IBM proved that it could produce and market a new product. However, the

multi-industry perspective has not enabled the company to recapture lost share.

INNOVATIVE FIRMS

Innovative firms are associated with a customer definition/multi-industry perspective. They possess none of the

narrowness of the previous firms. These firms, being defined by the customer wants and needs which they satisfy,

practice the marketing concept. They also possess a multi-industry perspective, looking to other industries as

potential competitors as well as sources of solutions to problems, and so they apply innovative strategies

borrowed from those firms. Management is cross-bred and willing to apply new strategies to marketing problems

and opportunities.

As a result of cross-fertilization of ideas, these firms enjoy a wide range of strategic alternatives. They are

farsighted or flexible enough to apply unique solutions to problems and opportunities.

One innovative firm appears to be Apple Computer (Sculley, 1989). The hiring of John Sculley from Pepsico

reveals Apple's willingness to apply marketing strategies from the soft drinks to the PC industry. Since Sculley

became CEO of Apple, revenues have quadrupled and return on shareholders' equity is the highest in the industry

(Sculley, 1989). Much of this success is attributed to Apple's new low-priced PC, the Macintosh Classic. Some of

the marketing strategies of the soft drinks industry appears to be applicable in the PC industry. Even the name

Macintosh Classic has a cola counterpart (Coke Classic).

In 1989 Xerox won the prestigious Malcolm Baldridge National Quality Award while regaining much of its lost

market share, (Research Technology Management, 1990). Much of the Xerox success is attributed to its

embracing of benchmarking. Xerox monitors performance in several product and service areas, and the ultimate

goal for each area is the level of performance achieved by the world leader, regardless of industry. For example,

the benchmark is L.L. Bean for distribution and American Express for billing. In that sense, Xerox epitomizes the

multi-industry perspective. As a result, Xerox's market share and customer satisfaction have soared. Wal-Mart Stores is still another innovative firm (Bergmann, 1988). Wal-Mart provides a variety of merchandise at

low prices to small towns in the United States, markets which have been ignored by other retailers. While many

retailers subordinate distribution to merchandising, Wal-Mart has borrowed sophisticated distribution practices

from other industries. Such innovations as the handling of palletized quantities and a state-of the-art warehouse

scanning system have lowered costs for Wal-Mart (Bergmann, 1988). Even the practice of greeting all customers

as they enter the store is a borrowed strategy from the hotel/restaurant industry. Wal-Mart has enjoyed a

meteoric rise in the field of retailing.

The innovative category implies a new perspective on the part of the firm. First, the firm should seek to satisfy

customer wants and needs. Second, the firm should realize that other industries can be sources of innovative

strategies for reaching the consumer. Both strategies are important in order to achieve performance objectives.

Of course, the innovative firm will gain little benefit without effective leadership to implement these strategies.

The innovative firm is not intended as a cure for marketing myopia, just as the marketing concept was not meant

as a cure. The marketing concept has, in some cases, been carried to an unproductive extreme (Levitt, 1975).

The same is possible with the innovative firm perspective. However, what is important in this perspective is to not

overlook other industries and thereby to remove some of the restrictions on the range of strategic options.

MANAGERIAL IMPLICATIONS AND RECOMMENDATIONS

For marketing managers who consider the innovative firm orientation desirable, the obvious question is how to

achieve it. Five recommendations are offered here:

(1) TAKE A GENERIC VIEW OF YOUR FIRM/INDUSTRY. Determine how the firm/industry has been defined and

consider a broader definition. A firm's statement of corporate mission can help it to define itself through

examination of needs satisfied, lines of business engaged in, products sold, and so on. Rather than focussing on

the products produced, examine the needs satisfied as well as potential product substitutes for those needs. The

result should be a broader definition of your firm and industry.

(2) MONITOR OTHER INDUSTRIES. You should be aware of marketing strategies in a wide range of industries.

These industries can serve as sources of innovative strategies for satisfying existing consumers as well as

attracting new consumers. You might scan business publications, as well as attend seminars where you will be

exposed to marketing people from other industries.

(3) ENGAGE IN BENCHMARKING TO DETERMINE THE OBJECTIVES FOR RELEVANT AREAS OF MARKETING. Once

you determine the objectives, you can develop a list of firms to emulate. Finally, analyze innovative strategies of

the benchmark firms for possible adoption. The second recommendation above can help in benchmarking.

(4) RECRUIT MARKETING PEOPLE. Marketing managers hired away from other industries can bring new

perspectives and solutions to marketing problems. In essence, these people can be "debriefed" when added to the

management team. In addition, brainstorming sessions between these new and existing managers can yield new

strategies.

(5) BE FLEXIBLE ENOUGH TO APPLY UNIQUE SOLUTIONS TO PROBLEMS. Also be flexible enough to change

unsuccessful strategies. Flexibility can be fostered by upper management's commitment to flexibility and

innovation. Management must encourage marketing managers to try new strategies without fear of reprimand.

In this era of global competition, the stakes are enormous. Companies afflicted with marketing myopia lack vision

and impose strategic limitations on themselves. To remain competitive and survive into the twenty-first century,

companies can combine the marketing concept and cross-fertilization of ideas for innovative strategies.

REFERENCES

Bergmann, J. (1988), "The Saga of Sam Walton", Stores, Vol. 70, pp. 129-42. Details

Subject Marketing management;

Market orientation;

Definitions;

Corporate objectives

Location United States--US

Classification 9190: United States

7000: Marketing

2310: Planning

Title Marketing myopia: An integrated view

Author Richard, Michael D; Womack, James A; Allaway, Arthur W

Publication title The Journal of Product and Brand Management; Santa

Barbara

Volume 2

Houston, F.S. (1986) ,"The Marketing Concept: What It Is and What It Is Not", Journal of Marketing, Vol. 50, pp.

81-87.

"John Sculley on Sabbatical", (1989), Fortune, Vol. 119, 27 March, pp. 79-80.

Levitt, T. (1960), "Marketing Myopia", Harvard Business Review, Vol. 38, pp. 45-56.

Levitt, T.(1975), "Marketing Myopia," Harvard Business Review, Vol. 53, pp. 26-44 and 173-181.

Loomis, C. (1991), "Can John Akers Save IBM?", Fortune, Vol. 123, 15 July, pp. 40-56.

Lovelock, C.H. (1983), "Classifying Services to Gain Strategic Marketing Insights", Journal of Marketing, Vol. 47,

pp. 9-20.

Oxenfeldt, A.R. and Moore, W.L., "Customer or Competitor: Which Guideline for Marketing?", Management

Review, Vol. 67, pp. 43-48.

"Pushing to Improve Quality", Research Technology Management (1990), Vol. 33, pp. 19-22.

Michael D. Richard is Assistant Professor of Marketing at Mississippi State University. James A. Womack is a

graduate student at Auburn University, Auburn, Alabama. Arthur W. Allaway is Associate Professor of Marketing at

the University of Alabama.

Pages 49

Number of pages 6

Publication year 1993

Publication date 1993

Publisher Emerald Group Publishing Limited

Place of publication Santa Barbara

Country of publication United Kingdom, Santa Barbara

Publication subject Business And Economics--Marketing And Purchasing

ISSN 10610421

Source type Scholarly Journals

Language of publication English

Document type Journal Article

Accession number 00804703

ProQuest document ID 220579945

Document URL https://search-proquest-

com.libraryresources.columbiasouthern.edu/docview/220579

945?accountid=33337

Last updated 2018-10-15

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