Marketing Myopia

In today’s global era, there is no doubt that the highest form of market competition exists, making the stakes for survival tremendous. To gain a competitive advantage, can the 5-decade-old question “What market are we really in?” still be the answer to long-term success? When asked by Theodore Levitt (1960) in a Harvard business review paper, this question, along with the theory termed “Marketing Myopia,” has evolved to become of the utmost importance for today’s practitioners in both marketing and business as a whole. Thus, the notion that marketing myopia remains relevant for contemporary practitioners is certainly valid, however the challenges underpinning its prolonged relevance require further investigation.

Levitt’s Marketing Myopia and its Impact:

In essence, “marketing myopia” refers to the dangerous practice of fixating on concerns such as product placement, revenue generation or existing market condition that results in a failure to anticipate future consumer needs. To counter this narrow-mindedness, Levitt (2004) suggests a shift to emphasizing consumers as the key to sustained success and competitive advantages. In today’s marketing discipline, Levitt’s work lives on in the broader scope of the “marketing concept” and “market orientation.” The Marketing Concept has become a business philosophy emphasizing customer needs to achieve sustained business success (Keelson & Polytechnic, 2012). Instead of enforcing an aggressive selling business model, the marketing concept asserts that businesses should only “make what it can sell, instead of trying to sell what it has made” (Keelson & Polytechnic, 2012, p.180).

Naver and Salter (1990), two influential people who pioneered the marketing concept, claimed that businesses with an increased “market orientation” will show improved market performance (p.20). Market orientation refers to a firms’ efforts to orientate their goals towards collecting and using market intelligence to target markets and design products that satisfy consumers’ current and predicted future needs (Ottesen & Grønhaug, 2004). While the marketing concept can be seen as the overarching business model with customer satisfaction at its core, market orientation is the strategy in practice to ensure consumer's needs are met.

To put into perspective how the marketing concept is an effective way to combat marketing myopia, we can turn to examples of the businesses that have successfully understood myopic dangers and oriented their firms to focus on the consumer. There is a plethora of evidence in today's big brand names that testify to the standing impact of Levitt's advocacy for consumer-focused marketing as a means to be innovation and remain competitive (Ng, 2016). Examples like Amazon's triumph in innovation by changing the game for consumer retail and Procter and Gamble's creation of a conglomerate of products are strong testaments to the effectiveness of Levitt’s advice (Ng, 2016). On the other hand, companies with downfalls, like Kodak, Blockbuster, and Circuit City to name a few, all failed to subscribe to the marketing concept and orientate their firm to anticipate the needs of consumers, resulting in falling victim to their competitors' success in doing just that (Ng, 2016). A more recent example of a business seeking to avoid myopia with a market orientation is Spotify. In 2022 they announced plans to test a new ticketing platform. This move exemplifies Spotify's awareness of being not strictly in the music market but rather in the entertainment industry. They have since introduced podcasting to their platform, and this latest movement into the ticketing industry shows an attempt to capitalize on market dominators like Ticketmaster facing backlash from users and artists (Wilson, 2022).

Levitt's simple suggestion to avoid myopic failure became a guiding principle approach for marketing practice that can still be used in today's successful brands.

The new marketing myopia challenges:

But why would the concern of marketing myopia still be relevant for today's practitioners if history has proven a consumer focus in market orientation as the perfect antidote? Despite the popularity of the guiding marketing concept and market orientation as a combating approach, myopic challenges still face firms today. A critical literature review on a wide range of marketing myopia literature from Levitt's conception till 2019 found that the critical issues written on remain around myopia in firms despite the abundance of literature warning of its pitfalls and overwhelming empirical evidence of its consequences (Kammasasrty, 2020). Therefore, we are faced with asking why has marketing myopia remained an issue for firms?

In order to answer this question, one must recognize that today's marketing myopia poses more nuance and complex challenges than it did when first described by Levitt. Naturally, as the concept is 60-plus years old, external conditions and societal factors have shaped new challenges for marketing myopia. One of the new challenges is identifying the extent to which firms orientate their focus on consumers. Even in a customer-centric approach, is moderation key? A paper by Smith et al. (2009) claims that marketers have learned Levitt's advice on how to avoid marketing myopia too well leading to a new myopic concern (Smith et al., 2009). This new marketing myopia occurs when firms view customers as the only “consumers” when in reality a consumer can also be a “citizen, a parent, an employee, a community member, or a member of a global village” (Smith et al., 2009, p.4). Smith et al. (2009) also underscored the danger of this myopia arguing that focusing on customers as the only type of consumers can lead to a dangerous loss in strategic vision, marginalization of the marketing function, and possible business failure.

Take for example, Nike’s failure to address their supplier's dire workplace conditions in the 1990s. By not giving sufficient attention to their employees needs as part of their consumer base they suffered the consequences as worldwide protests and boycotts broke out, ultimately tarnishing their brand identity (Simth et al., 2009). Similarly, an empirical study of German travel agencies found a positive correlation between the degree to which employees and customers identify with a company (Homburg et al., 2009, cited in Hult et al., 2011). It was found that financial performance improves with a higher level of employee-company identification with an increase in customer’s willingness to pay (Hult et al., 2011). Hence, it is in the best interest of firms to consider stakeholders in their marketing by actively engaging and addressing them as part of their consumer base.

To do so involves marketers first understanding the broader context of business decisions and framing stakeholders also as consumers. Including stakeholders in the marketing process has the potential to help create innovation and predict market foresight (Smith et al., 2009). A paper by Hult et al. (2011) argues it is crucial to understand that marketing activities occur in a system of social institutions and processes. In trying to be consumer-centric, managers must also acknowledge the complexity of their organizations. To combat this new form of customer-dominated myopia at the exclusion of stakeholders, practitioners can refer a revised stakeholder-oriented definition of marketing management:

Marketing management involves the determination and implementation of those activities involving a set of institutions and processes for creating, communicating, delivering, and exchanging offerings that have value for customers and other stakeholders, as well as society at large. (Gundlach & Wilkie's, 2010, p.90).

Defining marketing with the inclusion of stakeholders adds a level of nuance that Levitt's original marketing myopia does not touch. It is of great importance for organizations who want to avoid strategic vision loss and potential business failure by understanding the complexity of marketing decision making and including stakeholder considerations into the mix.

Gundlach & Wilkie's (2010) definition also implies that marketing creates value for “society at large” (p.90). This points to another crucial nuanced aspect of today's marketing myopia - concerning whether and to what extent marketers should have a hand in social responsibility. Marketing became increasingly viewed and accepted in society as a means to advance not just business organizations but individuals and ideas as well (Kotler & Levy, 1969). More recently, Kolter (2012) claimed marketing needs a conscience by explicitly calling for the intertwining of marketing and social responsibility. In theory, Levitt's suggestion and the developed marketing concept that promotes complete focus on consumers would then also imply catering to consumers' ethical and social concerns as an important task as well. However, there remains debate on the extent of marketers' involvement. For instance, Gaski (2022) does not debate the importance of social reasonability as he believes it is an important business strategy. However, he highlights that marketers don’t have the necessary means and qualifications to impose social responsibility standards on consumers (Gaski, 2022).

Gaski’s point is exemplified by the current sustainability marketing myopia. “Sustainability Marketing,” is understood as the aim to “satisfy consumers’ needs or wants and create a favourable position for the business in the marketplace by communicating how the business addresses environmental, social and economic concerns” (Bridges & Wilhelm, 2008; Mitchell et al., 2010, cited in Villarino & Font, 2015, p.326). A case study on marketing communications in the hospitality industry showed that despite abundant literature suggesting the competitive advantage of sustainability marketing, evidence shows sustainability marketing remains myopic (Levitt, 1984; Ottman et al., 2006; Rettie et al., 2014, cited in Villarino & Font, 2015).

The myopia Villarino & Font (2015) refer to, exists in the way accommodation businesses tend to focus their sustainability communications on factual descriptions with product-based messages rather than messaging that would influence consumers to behave more sustainably, showing they do not understand the potential benefits to be gained from doing so. Here yet again, we see the trap of marketing myopia, where firms focus on emphasizing the sustainability of their offerings rather than uncovering what is it about sustainability that their consumers actually want. Avoiding this marketing myopia demands going beyond just consumers needs and requires also accurately understanding their ethical convictions and preferences for socially responsible consumption.

However, it is important to note that determining consumer wants, especially in regard to ethical considerations like sustainability, is a challenging task. Research on the impact of sustainability information on consumer purchase intentions has shown a need for more clarity on what consumers say they care about and what they actually do (O'Rourke & Ringer, 2015). When faced with sustainability trade-offs, surveys have found that 30% to 70% of consumers say they want to buy greener, healthier, more socially responsible products, but only 1% to 5% buy the more sustainable option (Mintel 2011; Packaged Facts 2011; Devinney et al. 2010, cited in Villarino & Font, 2015). The evident gap is a testament to the further challenges of today's marketing myopia. This gap further supports the need for more dedicated market orientation practices where businesses dedicate resources and research to unveil their consumers' true needs and buying behaviours to remain competitive. Marketing myopia toady is not only is found in lack of stakeholder inclusion but also in a lack of understanding and delivering to ethical and social demands of consumers.

To conclude it can be said that in today's competitive global market, it is imperative for companies not only to guard against Levitt's marketing myopia by prioritizing consumer-centric approaches but also to understand the broader demands of the nuanced marketing myopia of the 21st century that encompasses stakeholder considerations and ethical dimensions. Levitt's question “What market are we really in?” can still guide businesses to evaluate their marketing direction but in order to augment its relevance and validity, the question needs to be extended to: What market are we in, who are our consumers, and what do they care about?

References

Gaski, J.F. (2022) ‘Toward social responsibility, not the social responsibility semblance: Marketing does not need a conscience’, AMS Review, 12(1–2), pp. 7–24. doi:10.1007/s13162-022-00227-1.

Grundvåg Ottesen, G. and Grønhaug, K. (2004) ‘Exploring the dynamics of market orientation in turbulent environments: A case study’, European Journal of Marketing, 38(8), pp. 956–973. doi:10.1108/03090560410539113.

Gundlach, G.T. and Wilkie, W.L. (2010) ‘Stakeholder marketing: Why “stakeholder” was omitted from the American Marketing Association’s official 2007 definition of marketing and why the future is bright for stakeholder marketing’, Journal of Public Policy & Marketing, 29(1), pp. 89–92. doi:10.1509/jppm.29.1.89.

Hult, G.T. et al. (2011) ‘Stakeholder marketing: A definition and Conceptual Framework’, AMS Review, 1(1), pp. 44–65. doi:10.1007/s13162-011-0002-5.

Kamasastry, P. (2020) Marketing myopia – a literature review based - proquest. Available at: https://www.proquest.com/docview/2515776576?pq-origsite=gscholar&fromopenview=true (Accessed: 07 February 2024).

Keelson, S.A. and Polytechnic, T. (2014) The evolution of the marketing concepts: Theoretically different roads leading to practically same destination!, Academia.edu. Available at: https://www.academia.edu/5003688/The_Evolution_of_the_Marketing_Concepts_Theoretically_Different_Roads_Leading_to_Practically_Same_Destination_ (Accessed: 08 February 2024).

Kotler, P. and Levy, S.J. (1969) ‘Broadening the concept of marketing’, Journal of Marketing, 33(1), p. 10. doi:10.2307/1248740.

Kotler, P., 2012. Marketing needs a conscience. Marketing News, 46, p.30. Levitt (1960)

Levitt, T. (2023) Marketing myopia, Harvard Business Review. Available at: https://hbr.org/2004/07/marketing-myopia (Accessed: 08 February 2024).

Narver, J.C. and Slater, S.F. (1990) ‘The effect of a market orientation on business profitability’, Journal of Marketing, 54(4), p. 20. doi:10.2307/1251757.

Ng, L.C. (2016) ‘Marketing myopia – an update (how Theodore Levitt changed our world? A look at the impact on corporate management after five decades)’, Journal of Marketing Management (JMM), 4(2). doi:10.15640/jmm.v4n2a2.

O’Rourke, D. and Ringer, A. (2015) ‘The impact of sustainability information on Consumer Decision making’, Journal of Industrial Ecology, 20(4), pp. 882–892. doi:10.1111/jiec.12310.

Smith, N.C., Drumwright, M.E. and Gentile, Ph.D., M.C. (2009) ‘The new marketing myopia’, SSRN Electronic Journal[Preprint]. doi:10.2139/ssrn.1336886.

Villarino, J. and Font, X. (2015) ‘Sustainability Marketing Myopia’, Journal of Vacation Marketing, 21(4), pp. 326–335. doi:10.1177/1356766715589428.

Wilson, J. (2022) Spotify launches new site to sell tickets to live music events, Forbes. Available at: https://www.forbes.com/sites/joshwilson/2022/09/11/spotify-launches-new-site-to-sell-tickets-to-live-music-events/?sh=4f1c143262db (Accessed: 07 February 2024).