Marketing Myopia is a proven theory that helps marketing professionals understand their audience and make significant jumps in their business or career. Theodore Levitt introduced the theory in 1957, and it’s been adopted by many marketers, companies, and organizations to date. What came to define the 20th century way of selling will not work in the 21st century. At this point, it’s a common meme that marketing is moving from pushing products to pulling in customers. How does it work, and how can it be used? This post looks at these questions and offers an effective solution.
What is Marketing Myopia?
The concept that describes the tendency of marketers to focus on the needs of their current customers. Rather than potential future ones. The term was coined by Theodore Levitt in 1960. He argued that a company selling any product or service must consider the needs and wants of current customers. As well as their potential future customers.
In this context, it refers to a tendency for companies to focus on current customer needs. Rather than potential future ones when developing new products and services. This often happens because companies have limited resources that can only be allocated to one project at a time. So they tend to pick the best option based on what they know now. Instead of thinking about how they can improve it later.
As marketers, we often think of our customers as a homogenous group. But the reality is that they are all unique individuals with unique needs and wants. We can better assist our consumers by learning more about them.
One way to do this is to use the Myopia model. Developed by Theodore Levitt in his 1960 article “Marketing Myopia.” It aims to help marketers understand their business from their customers’ point of view. “The view from the outside in,” instead of “the view from the inside out.”
It has three levels:
- Myopic (or in-the-box): This level is characterized by an inability to see beyond company walls. It focuses on internal processes and treats customers as cogs in a machine instead of individuals with unique needs.
- Paranoid: This level recognizes that other companies are competing for customers and market share. But it focuses more on protecting against threats than on serving customers better than competitors do.
- Optimistic: This level focuses on serving customers better than competitors do by focusing on the customer’s perspective
How to Use Marketing Myopia?
The theory by Theodore Levitt, an American economist and marketing scholar. According to the concept, organizations should concentrate on their customers’ demands rather than their needs. According to the theory, customer needs are not always obvious and may differ from what the business thinks they are. The theory states that businesses fail because they focus on creating solutions for their problems. Rather than the actual needs of their customers.
Identify current and future customer needs
The theory states that a company can only understand its customers’ current needs. But cannot predict their future needs.
This occurs when marketers are more concerned with their own services and goods than with customers’ needs. They assume that what they already know about their customers’ needs is all there is to know. So they don’t bother to ask questions and learn more about them.
As a result, companies create less competitive products than they first are. For example, if you sell shoes and focus on designing fashionable shoes instead of shoes that protect our feet from injuries or disease, your product will not serve its purpose well. As a result, people will use other brands of shoes instead of yours because those brands meet their actual needs better than yours does.
Identify your key customer groups and segments
In his book, “Marketing Myopia,” marketing professor Theodore Levitt invented the phrase (1960). The term describes the shortsightedness of companies that focus on current customers at the expense of losing potential customers.
Businesses often concentrate their marketing efforts on existing customers. This is not surprising, as current customers are easier to reach and are more likely to respond to new products or services. However, this approach can lead to businesses losing sight of their overall market and missing out on the opportunities presented by other segments that may not currently be buying from them.
Some businesses may also develop a misplaced sense of customer loyalty, believing that their existing customer base will always remain loyal to them even if they don’t offer superior products and services.
Develop value propositions for each segment
Myopia is a fundamental problem because it prevents companies from developing products relevant to their customers’ needs. A company may be successful at selling its existing products. Still, if it doesn’t invest time and resources into understanding what its customers want next, then it will soon find itself out of business. The concept is based on the idea that companies tend to focus their efforts on one segment of the market at a time.
The concept refers to the tendency of companies to focus on only one segment of their markets at a time. Companies with this problem focus intently on their best customers that they neglect other segments and opportunities. You can overcome myopia by developing value propositions for each segment and then identifying which one will impact your business most.
To overcome myopia:
- Identify different segments of your market and develop value propositions for each segment;
- Rank them from highest ROI to lowest ROI; and
- Identify which segment offers the highest ROI for your business
Ask questions about each proposition
Asking questions is a great way to use myopia. Your own ideas and assumptions can get in the way. Your team can help you see the bigger picture by asking questions about each proposition. What do people really want? How do they really feel about your product? What do they really believe about your brand?
An effective but simple approach helps ensure that your marketing efforts are on the basis of valid assumptions. Ask yourself whether you are being realistic about the benefits of your product or service. Asking questions can be a powerful tool for making better business decisions.
Decide on the most important opportunities for growth and profit
In the early 1960s, Theodore Levitt published an influential article entitled “Marketing Myopia,” in which he argued that too many companies were neglecting opportunities for growth and profit in pursuit of existing customers. They focused on maintaining current sales levels at the expense of finding new customers and serving existing ones better.
The article was a wake-up call for business managers everywhere, and it led directly to a generation of marketing strategies that focused on customer retention and satisfaction. But while this approach has been very successful at keeping customers loyal, it has often ignored the potential for growth in other areas.
In recent years, marketers have realized that there are two kinds of myopia: short-term focus and long-term focus. The first type refers to working hard to retain existing customers at the expense of finding new ones; the second involves ignoring or undervaluing existing markets as an opportunity for growth.
The main takeaway is that neither strategy is superior to the other; they are simply multiple methods. As you build your strategy, make sure you understand which kind of market your business needs right now (and why) and which kind will help it achieve its long-term goals.
Identify the capabilities you need to create and deliver your valued propositions
This section will dive into the key capabilities that you need to create and deliver your valued propositions.
We’ve already talked about how it’s possible to provide a lot of value by focusing on a very narrow niche. However, emphasizing a broad niche can also give a great benefit. For example, a large company like IBM might have a business unit specializing in providing all of the technical requirements for banks or insurance companies.
In the previous section we discussed how myopia is sometimes also the “product life cycle.” We often use myopia to explain why companies don’t innovate or expand their offerings. The argument goes like this: If your company has successfully sold computers to schools for years, why would you ever want to sell anything else?
The problem with this argument is that it assumes that there is only one way to create value in any given market by selling computers to schools. But what if there were other ways. What if there was another product that schools could buy – say, tablets? By asking potential customers what they need and why they need it, you can avoid creating something nobody wants and make sure that you’re developing something that people will actually buy from you.
Create a plan to acquire, develop or invest in these capabilities
Theodore Levitt explained that companies tend to focus on their own products and services rather than on the needs and wants of their customers. He used this theory to explain how companies can go bankrupt.
One way to avoid myopia is by creating a plan to acquire, develop or invest in these capabilities:
- Market sensing is a continuous process used to collect information about customer requirements and actions.
- Market understanding – using market sensing data to make decisions about what products or services to offer, where to offer them, when to offer them, and how much to charge for them
- Marketing intelligence – making sense of this data as it relates to competitors’ offerings and the same as market understanding but with competitors added
How have companies used marketing myopia?
Myopia is a term coined by Professor Theodore Levitt that describes the tendency of businesses to focus on the short-term bottom line rather than the long-term health of the business. It is the tendency of marketers to focus on a single segment of a market rather than the entire market.
Many companies make this common mistake, but it can be eliminated. But here are some ideas of how myopia could help you:
- Keep in mind your marketing strategy is founded on facts rather than guesswork. This will help you avoid making decisions based on what you think might be best for your business and instead focus on what has been proven to produce results.
- Don’t just look at short-term results; also consider long-term goals and potential impacts on your brand and financials. This will help ensure that you’re thinking about all aspects of your business holistically.
- When planning new campaigns or products, consider how they fit into a larger strategy for growth over time rather than just looking at them in isolation.
All in all, myopia is something that businesses need to keep in mind, especially when it comes to striking up partnerships with other businesses or sharing information for research purposes. The same goes for consumers: by understanding this concept, you can better prevent yourself from falling into the trap of myopia and realizing its potential impact on you and your peers.