Description
This presentation describes marketing myopia Harvard Business Review in 1975 with the help case studies with Indian perspective.
Marketing Myopia
Group No. 3
Pooja Botadra (103) Arpita Desai (104) Devanshi Desai (105) Connie D’souza (110) Evellyn Goes (114)
2009-2011
Table of Contents
I. II. III. A. B. C. D. E. F. G. H. IV.
Introduction .............................................................................................................................. 3 Analysis ..................................................................................................................................... 4 Indian Case Studies ................................................................................................................ 7 Indian Postal Service .............................................................................................................. 7 Indian Premier League ........................................................................................................... 9 Photography Industry .......................................................................................................... 12 Music Industry ..................................................................................................................... 13 Ambassador ......................................................................................................................... 14 Amitabh Bachchan ............................................................................................................... 17 VLCC: Vandana Luthras Curls and Curves.............................................................................. 19 Malls: A successful attempt in Overcoming Marketing Myopia............................................. 20 Conclusion ........................................................................................................................... 21
I.
Introduction
“Marketing Myopia” is an article published in the Harvard Business Review in 1975. The very fact that it is still being used as a teaching tool in a marketing class in 2006 speaks volumes for the article’s central message, that top executives must define their industries correctly. It seems simple enough, and yet Levitt supplies the reader with many examples of industries that have either given up profitable opportunities or simply drowned in a sea of red due to their industry classification. Today, fast changing technology is bringing about a discontinuous change, that is, change which has no connection to the past. So where the competition will come from, one doesn't know. Fax machine have become obsolete because of email. Landlines are becoming obsolete because of mobile phones. You can watch movies on demand on your TV or mobile phone. You can take care of your customers all over the world from a single location cost effectively. We do not know where technology is going to take us. It is because of this that it will increasingly become more and more important to define your business in a broad manner based on the benefit that your products of services provide to the end consumer. Exactly, what Levitt suggested in 1975, before you sit down to develop any strategy, first establish "What business you are in?" and "Who are your competitors?" Remember, to define your business broadly based on the "benefit" it provides to the customer and not on the "product type."
II.
Analysis
Industry classification errors do not occur because top management believes that it operates in a different field than it actually does, per se. Rather, Levitt drives home the point that most successful companies identify themselves to be a part of larger industries. For instance, McDonald’s and Burger King may think of themselves as being in the restaurant business, but in reality they should realize that they are in the business of feeding the hungry; Exxon Mobil and British Petroleum, likewise, may consider themselves to be in the petroleum industry, but they are in fact in the business of producing usable energy for the average citizen. Levitt gives many examples of industries that have completely failed, including a humorous anecdote about a British millionaire who, myopic and overly optimistic, “unintentionally sentenced his heirs to poverty” by putting all of his estate in street car securities. Levitt continues that is posthumous declaration, ‘There will always be a demand for efficient urban transportation,’ is no consolation to his heirs who sustain life by pumping gasoline at automobile filling stations.” This goes to show how real the possibility of being inflicted’ by marketing myopia is, even for seasoned businesspeople. Notice also that, in this specific case, the posthumous declaration is right on target, but it is not explained just how people would obtain their transportation. Obviously street cars have evolved. This concept is at the heart of Levitt’s article. Rather than defining one’s industry to be “the street car industry” or “the railroad industry,” companies would be much more successful if they thought of themselves as being in “the transportation industry.” After all, most of the time technology evolves but the needs to be fulfilled remain the same. Another cause of marketing myopia is what Levitt calls the “idea of indispensability.” This concept is embodied by many industries, including the petroleum industry. Levitt says that “The petroleum industry is pretty much persuaded that there is not competitive substitute” for its products, and that all energy providers will ultimately use a derivative of crude oil, whether in the form of gasoline, diesel, or kerosene. This self-assured attitude exists “despite all historic evidence against it,” writes Levitt, going on to cite the times when the petroleum industry literally almost fell to its knees. For instance, Levitt speaks of the gas revolution that posed a threat on the petroleum industry, although ironically it is none other than the petroleum industry that owned the natural gas it was threatened by. “By all the logic of the situation,” writes Levitt, “the oil companies themselves should have made the gas revolution. They not only owned the gas; they were also the people experienced in handling, scrubbing, and using it, the only people experienced in pipeline technology and transmission, and they understood heating problems.” And yet, the natural gas revolution took place outside of its owners’ industry,
posing a threat rather than an opportunity for those who should have reaped its benefits by default. This is just one example of how defining an industry correctly can be the difference between sweet success and not-so-sweet bankruptcy. The example of the petroleum industry illustrates the point that companies should not work against new technology and innovative ways of fulfilling needs. This is a rather obvious concept, but when businesses have invested millions of dollars conducting their activities a certain way, it is not easy to simply embrace new techniques and release old ones. However, as Levitt points out, a company that is not affected by marketing myopia will realize that it cannot hold on to the idea of “doing things the way we have always done them,” because the competition will probably be doing the same things more efficiently and at less cost. This effectively makes the entire situation an “either take it or leave it” game, and those who “leave it”---ignore the new advances in competitive industries---are those that come to the brink of failure, where survival rates are slim. The foresightedness that should ideally be present to make intelligent, long-term decisions is often overtaken, partly by a fear of the unfamiliar, and partly in a seemingly natural human instinct to fight evolution. Yet another cause pinpointed by Levitt in “Marketing Myopia” is what he calls “production pressures.” It is very true that any executive would be very happy to know that his or her company has the capability to produce more products at ever-decreasing costs and sell them for ever-rising profits. However, when this type of situation exists, “all effort focuses on production and the result is that marketing gets neglected.” It is understandably difficult to persuade top management that it really needs to focus some of its energy on marketing its goods, not just producing them and assuming that they will be purchased and consumed by faithful customers, especially when their products are selling very well. It is also understandably difficult for an executive to suddenly have to face a sudden change in the market that favors another industry that uses newer, better technology. Embracing change and not feeling assured of the market for one’s product is the map of success drawn out by Theodore Levitt. A further problem identified by Levitt is the danger of research and development, especially in industries that are becoming increasingly technical. “Because electronic products are highly complex and sophisticated, managements become top-heavy with engineers and scientists. This creates a selective bias in favor of research and production at the expense of marketing.” This creates an atmosphere of creation and delivery rather than that of listening to and satisfying customers. Marketing is given what Levitt terms “stepchild status.” This is the epitome of marketing failure. A company’s mission statement is a powerful tool in avoiding marketing myopia.
“A mission statement specifies the organization’s overall goals and operational scope…” Levitt thinks that most companies fail when it comes to correctly describing their operational scope, and think of their industries too narrowly. According to Levitt, corporations need to go down to the most basic level of the need they are ultimately fulfilling, whether it is quenching people’s thirst or giving them a mode of transportation. This view has many practical applications. For example, Levitt describes the “fiscal purgatory” that Hollywood suffered through as a result of its incorrect definition of its own industry. Hollywood thought of itself as being in the movie business, and consequently saw any other form of entertainment, such as the rise in the popularity of television, as a bitter foe. However, had Hollywood defined itself to be in the entertainment industry, it would have seen a great opportunity in the television section of the entertainment business, and evolved to create more television shows than movies. Movies, of course, were on a steady decline, but since Hollywood felt threatened, not relieved, by the success of television, it paid the price through waning profits and lots of headache. Theodore Levitt’s prescription for the phenomenon he calls marketing myopia is simple: go back to basics. If companies would only reflect on what they really do, and how they fit into the grand scheme of things, they would probably gain a lot of insights into the directions they should be heading in and the future hurdles they should be planning to avoid, many times by seeing them as best friends, not bitter enemies. Executives would, if they look at their companies from a broad perspective, be able to integrate their customers’ needs and create products that really satisfy them. After all, the end consumers are the bloodlines of the company, which would produce goods and services for no one if their target markets did not exist. Why, then, does Levitt cite companies that act as though they could not care less what their customers think? Obviously, they demonstrate this type of behavior by lending themselves to production rather than marketing, selling rather than building lasting relationships with their consumers. Companies need to think about why their customers need their products or services, and they need to innovate to find better ways to create and deliver these items when and where the consumer demands. Unfortunately, many companies do not seem focused on the consumer, and even the thousands of dollars they spend on “market research” usually get boiled down to a bunch of useless numbers and percentages. The complete integration of consumer needs into every aspect of the company, from chief executive officer to salesperson, from designer to distributor, is a surefire way to keep consumers happy and keep profits rising in an ever-changing world.
III.
Indian Case Studies
A. Indian Postal Service
India Post is the backbone of India’s communication structure. This juggernaut reaches the nook and corner of India . The system of carrying messages were said to exist even during the time of Allauddin Khilji in 1296. The first Post Office was established in 1766 by the East India Company . They opened the PO in Mumbai Chennai and Kolkatta. It was Mr Warren Hastings that made the postal service available to general public. India Post is functioning under the Ministry of Communication. This huge organization have around 1,50,000 offices and around 500,000 Post boxes. Till recently India Post was enjoying the Sole Supplier Status in this market. But, recently India Post had been making losses continuously and was surviving on subsidy from Government. With the private players taking up major share in the 1200 crore Courier market in India , India Post is left with the unprofitable business. India Post has a huge advantage over the private players in the reach factor. No one can match the reach of post offices and our very own “ Post man”. Through these postmen, India Post reaches all over India. It is these Post Men who is going to save India Post. Therefore, in 2008, Indian Government had decided to restructure the entire postal department. The restructuring exercise is called Project Arrow. The project aims to make India Post a logistics giant by leveraging the core strengths of the institution (from the previously narrow industry definition of just carrying messages/letters). The restructuring is being done in consultation with Mckinsey. As a part of the restructuring exercise, the institution has redefined its business. According to Professor Theodore Levitt, every business should ask this fundamental question : What Business are You In ? The answer to this question can throw up lot
of opportunities for growth. Narrowly defining the business can create Marketing Myopia which may wipe out the business in the long run. From just a postal institution , the department has reframed its business to be in the logistics service rather than just a postal service. The move is a significant step in broadening the scope of services that could be handled by this giant. It is important to reinvent the business definition since the postal service is facing competition which could make its business irrelevant. The e-mail and the rise of affordable private courier services has taken away a significant chunk of profitable business of this institution. Since it is a government department, India Post could'nt change fast to accommodate the changing environment.
B.
Indian Premier League
Cricket is the only sport in India that is considered a religion for a major section of the Indian society. The IPL is a 20-20 format cricket tournament. The idea behind IPL is to market cricket as a high involvement reality show. The IPL redefined the sport by packaging it along with entertainment and providing it to a varied spectrum of consumers. This would be a classic example of overcoming Marketing Myopia
Thinking of it from the perspective of Marketing Myopia, IPL’s success was because of the following reasons: ? Broad definition of industry: IPL broadly defined the industry in which they are operating in, right from the beginning. In other words they portrayed IPL to be in the business of entertainment and not just in the business of sports. Also within the entertainment industry they have not restricted themselves to one medium of providing entertainment i.e. the TV Channels, but also included broadcasting live on Youtube and multiplexes to reach a wider audience. ? Customer Orientation: IPL was not only product oriented but all the way it used its resources in the creation of customer satisfying needs and had a sophisticated eye for customers i.e. they had the perspective of being in the business for creating, communicating and delivering customer satisfying services. The IPL aptly picked the 20-20 format for quick entertainment
for customers who require relaxation at the end of a long day of work instead of the one-day format. The IPL look at the customer needs constantly even considering changing the colour of the cricket ball to pink in order for it to be more visible to the viewing public.
Resulting Success of IPL:
Defining the industry broadly, IPL not only benefited BCCI, the board that conducted it but also its other partners in the industry like the TV channel broadcasting it, the franchisee team owners etc. as described below: ? The biggest gainer of IPL is arguably BCCI – which raked in a profit of Rs 350 crore from IPL in the first year itself. This is be more than BCCI’s profit of Rs 235 crore for all of 2007. In all, IPL bought in revenue of Rs 1,200 crore a year into cricket, more than double the government’s entire sports budget of Rs 490 crore. Set Max, too, seems to have a winner on its hands. The channel’s revenue market share has risen from a pre-IPL level of 5.7% to 28.8%, according to a report. Its share of prime time has gone up to 29%, higher than the cumulative market share of the top nine Hindi general entertainment channels. In the second year, Sony is projected to gross about Rs 650 crore in advertising revenue for about 45 days of IPL, which would be 7% of the entire estimated TV ad revenue of around Rs 9,000 crore for the whole year. Ad rates for 10-second spots, which were at Rs 2 lakh per 10 seconds at the start of the tournament, have climbed rapidly to Rs 5 lakh. IPL’s success has also rubbed off on the franchisees.
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?
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Resulting Impact on TV shows: TVs shows normally target specific age and need groups like women at home, youth etc. When IPL entered it did not restrict itself to a particular target group, rather it served anyone looking for entertainment. As a result, the TRPs of the TV shows were affected drastically when IPL began.
C.
Photography Industry
Technology changes have also played a major role in blurring the lines between competing products. The move to digital photography has changed the photography landscape immensely. And one player that suffered from "marketing myopia" was perhaps Kodak that got into the digital photography market later than it should have if they had seen themselves in the "image capture" market. Changes in the photography world have happened at many levels digital cameras from traditional camera makers, but also new players in the digital camera market, as well as photos from mobile phones and camcorders. This has also spawned other associated products and services - online services for printing and storing, photo printers etc. The brands and competing players are very different now - brands like Sony have exploited their strength in digital (cybershot) cameras and launched mobile phones that use the same technology as their cameras. Suddenly major mobile phone manufacturers have got into this field of "image capture".
So how does one measure the photography market now - surely we can no longer limit it to the traditional number of snaps taken and developed. We must also take into consideration images captured in any form and stored/developed in any media (SLR camera, digital cameras, camcorders with cameras, mobile phone cameras etc.). This would certainly mean that there are a lot more photographs taken now: even if not all will be printed, given that they can be stored or deleted. Share of photography and videography solutions is key given that the market itself is much more complex - digital photo printing, online storing and printing services, memory requirements for storage, PC's, memory cards, developing etc. It is quite clear that this market is one which has been redefined by technology.
D.
Music Industry
A contemporary example is the music industry. Humans have been creating music for at least 4,000 years, but the era when sounds were encased in plastic (or wax or vinyl) covers a 131-year blip on that timeline, and the CD encompasses only 26 years of that. But the music industry clings tenaciously to the concept of music as a packaged good, and continues to devote energy and dollars to compel consumers to buy CD’s.
From a Levitt perspective, the music industry should have taken this opportunity to redefine itself far beyond mere songs. Once their distribution oligopoly was blown wide open by the Internet, the major record labels should have redefined themselves as marketing companies with expertise in building and promoting music brands. These brands go by such names as “Aryans,” “Agnee” or “Pin Drop Violence” (to name a few) and the music labels should be helping those brands generate revenue streams from multiple sources, such as concerts, merchandise and commercial licensing. These multi-faceted revenue models are called 360-degree deals. Some savvier companies, such as Universal music, are already taking that approach, with the major labels only now realizing the future is not encased in plastic. A classic example of a company falling prey to marketing myopia is TIPS music. Initially TIPS dealt mainly in cassettes and was doing exceedingly well in it. However with advancing technology CD’s, DVD’s and ipods began to catch the eye of customers. TIPS being more product oriented rather than customer oriented chose to overlook this trend. And hence it wasn’t able to accurately understand the needs of its customers and hence lost out to its competitors.
E.
Ambassador
Ambassador can be called as the first Indian car. Although the car has a British legacy, it is considered as definitive Indian car. Ambassador was born in 1958. The car owes its design and technology to a British car model - Morris Oxford which was built by Morris Motor Co at Oxford UK. Hindustan Motors launched the Indianised version of Morris Oxford as Ambassador in 1958.
From 1958 to 1980's Ambassador ruled the Indian market. Infact there were only two cars in the Indian market - Premier Padmini and Ambassador. The licence raj, lack of capital and the unfriendly Indian economic policies ensured that no automobile manufacturers entered the Indian market. 1983 saw the emergence of a new era in the Indian car market. Maruti Udyog Ltd launched the Maruti 800. Soon Ambassador lost its leadership position to Maruti. The family segment which is the largest segment in the car market embraced Maruti. Ambassador was reduced to a marginal player within no time. But Ambassador had some advantages over 800 which made it dearer to certain segments. It was the only Indian car with Diesel option. During those times, there was a significant difference in the prices between Diesel and Petrol. Second advantage was the space and sturdiness of the Amby. These two factors enabled the brand to become popular among big families and more importantly among the Taxi and tour operators. Amby was perceived to be a sturdy car ideal for Indian roads. The brand also had a positive perception of being less expensive to maintain. These two were only perceptions. Infact Ambassador was expensive to maintain and even though the car looked sturdy and well built, the car lacked the quality and refinement. Rattling sounds and rusting was common complaints. But consumers bought the car because of the significant economy of diesel cars which made consumers to compromise on other parameters. Another significant market for Ambassador was the Government. Over 16 % of the brand sales came from the Government. Ambassador was the first choice for most bureaucrats .
Ambassador used to be the Prime Minister's car till 2002. That status was lost when the PM of that time Mr Atal Bihari Vajpai replaced Ambassador with a BMW Limo. Soon the officials also lost interest in the brand. With the emergence of new and better models from other auto-makers, there was a significant drop in the orders from the Government. The fall of Ambassador from a leadership position to a marginal player is a classic case of marketing myopia. For four decades, the brand has been taking its customers for granted. There are many reasons that can be attributed to this brand's failure. The fundamental issue was with the product and price. If we look at the product, Ambassador never changed with times. The brand made many cosmetic changes from 1958-2000 and three upgrades was made which was named as Mark II, Mark III and Mark IV . There was no significant value addition between these upgrades. The look and the built quality remained the same. A major change happened when the brand introduced a 1800 Isuzu engine. The Amby with Isuzu again lifted the sales of the brand. But the euphoria was short lived. The apathy of HM to offer product changes in tune with the times made the brand stale. Second factor that failed Amby was the price. HM never bothered to rationalize the price of the brand. Even now Ambassador costs more than Rs 4,80,000. At that price one could afford a more luxurious Indigo sedan. According to reports, the HM plant had achieved full depreciation in 2000. But the company did not thought of passing on the reduced cost to the consumer. Had the company rationalised the price of Amby in 2000, the brand could have survived the competition.
The nail in the coffin came with the launch of Indica. Indica took away the taxi car market from Ambassador. Again the diesel loving individual consumers had a better affordable modern car as compared to the ageing Ambassador. In order to lift the sagging sales of the brand, HM launched a radically designed Ambassador variant Avigo in 2004. Although the styling was radical, the customer response was lukewarm. Indian consumer is now spoilt with choices. The competition is immense and the quality of cars has also gone up. Consumers now have new set of purchase considerations like quality, brand, drivability, luxury, cost of maintenance etc. In the value proposition domain, Ambassador is never in the radar of the consumers. The narrowing price difference between petrol and diesel also eroded the value in investing in an old dated Ambassador.
The company also has never invested in the brand. Without investing in either brand or product, HM had sealed the fate of this brand. The question that arise is could a brand like Ambassador maintain its position Indian market despite all the competition? In the brand management perspective, its suicidal not to continuosly invest in a brand. Often heritage brands wait till it becomes dated. Once the brand becomes dated, its virtually impossible to rejuvenate the brand. The task is to prevent the brand to become dated. For that the brand has to go to the consumer for ideas. Changes in product or promotions can sustain the brand even in the light of emerging competition. Brands like Lux, lifebuoy, Surf has been successful because of continuous investment in branding and product development. Ambassador should have learned from Maruti 800. The brand is still surviving because it made changes along with the changing consumer values. Also the brand rationalised its price in the light of emerging competition which made Maruti 800 relevant even in the current market. The brand could have been relevant to Indian market as a basic family car. It is a herculean task to bring Ambassador back to life. A price below the price of Indica is the only option for the brand to keep its fortunes alive.
F.
Amitabh Bachchan
Amitabh Bachchan is one of the greatest entertainment icons of India. His career saw a major dip after he failed miserably at business. Yet today, he has come up as one of the top stars of India giving competition to actors who are a generation younger to him. His is a classic case of overcoming marketing myopia.
? Marketing Myopia of movie stars. Traditionally movie stars in India hardly came on TV. The audience had only one connection with them n that was when they saw their movie. Besides award shows, the audience could not find any medium to connect with their star. As a result they had a limited career span. What they lacking was the willingness to survive and to satisfy the audience through inventiveness and skill. ? Amitabh’s Marketing Myopia:
After being hit by a major financial crisis in 1997, Bachchan attempted to make his acting comeback with the film Mrityudaata. Though Mrityudaata attempted to reprise Bachchan's earlier success as an action hero, the film was a failure both financially and critically. ? Overcoming Marketing Myopia:
At this stage Amitabh did something very different from his counterparts. He recognized ‘ What business he is in?’. While most actors of those times thought they were in the business of acting in movies, Amitabh defined it as’ being in the entertainment business’. In the year 2000 Amitabh Bachchan barged into Indian homes with one of the most poplar quiz shows of Indian television “Kaun Banega Crorepati”. It was first time in the
history of Indian television that a movie star had become a part of a show on the small screen.
?
Being customer oriented:
After the success of KBC, Amitabh has never looked back. He redefined his business and therefore could bank on several opportunities. He understood that the customer wants variety and would like to see him in different roles. He broke the myth that a person in his 60’s can only play a father’s role. Being in the entertainment industry, he has done everything from playing his son’s son in Paa to playing the lead role in movies like Bhootnath, Baghban and Chini Kum to keep his audience entertained. Thus, Amitabh appeals to every age group. Another area where he has forayed into is Advertisements. Amitabh endorsed everything- from pens to cars to hair oils to chocolates. Thus he has given his where his audience several options to connect with him using various platforms
G.
?
VLCC: Vandana Luthras Curls and Curves
Broad Definition of Business:
VLCC had defined itself as being in the wellness business. Though it began as a centre for weight management, they expanded into many meaningful areas beauty treatments, natural products, spas and VLCC learning institute. By redefining wellness, VLCC revolutionized this industry and acquired the status of India’s largest health and beauty brand. The VLCC Group, a ‘Super brand’, serves as an umbrella for all its other brands – VLCC Health Care Ltd., VLCC Personal Care Ltd. and VLCC Institute of Beauty, Health and Management. VLCC’s services provide holistic wellness, as a service, marrying scientific research and traditional therapies.
? Customer Orientation
? As the economic status of middle class Indians improved, so did their aspirations. They proactively looked at health and beauty offerings to look and feel good. ? Most businesses restricted themselves to be only in beauty or hair care or weight loss. ? Many customers wanted a one stop solution to all their wellness related problems ? VLCC recognized this opportunity and redefined its business. ? VLCC became a place where all customer needs could be taken care of. ? Thus, while there are many other single product/service focused businesses in India like Lakme Beauty salon, Kaya Skin Clinic and L’Oreal Salon, VLCC is the undisputed king of providing complete wellness solutions. ? Further meaningful expansion of VLCC brand came through the opening of VLCC Institute of Beauty, Health and Management. By overcoming the marketing myopia of beauty industry, today VLCC is the single largest player in the organized sector with a pan-India presence of nearly 225 outlets across 75 cities, 1 in Kathmandu, 9 locations in UAE, 2 in Oman, 1 in Bahrain and 1 in Al Ain.
H.
Malls: A successful attempt in Overcoming Marketing Myopia
In today’s scenario consumers look for convenience in whatever they do. Hence having all goods like FMCG products, consumer durables, clothing lines etc sold under one roof is of utmost importance, as it provides the consumers with a one stop shop. Very often in kirana shops it is seen that while they do manage to stock up groceries and the likes, they are often limited by space & budget constraints, which negatively impacts the general shopping experience that customers in such stores. It is important to remember that whilst shopping for goods, people tend to enjoy the experience of shopping rather than the goods that have been shopped for in all its practicalities. The effective placing of products on shelves, the self service option with helpers to guide one whilst shopping, the ambience, the different mix of products available under the same roof etc go a long way in creating a memorable shopping experience for customers. The mall culture that has seen a sudden boom is a perfect example of the ability of this particular industry to accurately gauge the needs of the consumers in this regard. We now see traditional markets transforming themselves in new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. Western-style malls have begun appearing in metros and near metro cities, introducing the Indian consumer to a new shopping experience. Thus malls have been able to accurately define the business that they are operating in. They are not just in the business of providing goods that are sought after by customers, they are in the business of providing quality goods combined with a whole new shopping experience that customers will find hard to forget, thus bringing these customers back in the form of repeat customers. Some of the well-known Malls would include shoppers stop, Nirmal Life style, Pantaloons etc. ? Customer Oriented rather than product oriented:
Also the food courts that one has begun too see at the top floors of various malls is another classic example of malls being customer oriented rather than product oriented. Generally normal restaurants do not serve more than 3 different cuisines, so very often when customers go out in large groups with each wanting to have something completely different from that of the other, the most apt place for them to head to is the food court at such malls. Malls would generally have more than 20 different food outlets to select from with all offering different cuisines thus catering to the different needs of different customers at one time. Hence in this way, malls have successfully shown that by orienting one’s business to suit customers rather than trying to discover ways to orient customers to like the product on offer, just takes the business a step further in terms of its success over other restaurants.
IV.
Conclusion
After having looked at all the examples, we realize that Theodore Levitt’s concept of Marketing Myopia persists even today. This is because people are unaware of the dangers of defining a business too narrowly or not concentrating on satisfying consumer needs ie product oriented products rather than customer oriented products. A continuous reassessment of the kind of society that one lives in is absolutely integral to success. The realization that we all live in a fast paced continuously evolving consumer society is a must. It will take e business a long way in terms of accurately predicting and meeting the changing needs of the customer. Companies’ either have to EVOLVE and ACCOMMODATE consumer needs OR DIE. Symptoms & comments such as: “ They have nothing on us”, “ That could never happen to us”, “ We are our own competitors”, “ Customers love our product or service regardless of what happens” are some of the marketing myopia symptoms that companies need to clearly identify and stay away from. We need to understand that the problems that exist in the world today cannot be solved by the level of thinking that created them we need to go a step further and delve into the intricacies of the problem. This is possible only when organizations are able to accurately predict and define the problem that they are likely to encounter in the future, and work towards minimizing or altogether nullifying these problems with innovative & unconventional management. Conventional management is a symptom of marketing and management myopia because the system in which managers are groomed is indiscriminant of whom it captures and who’s mind it handicaps by restricting their thinking to “tried and tested” thought processes. We need to understand the concept thoroughly in order to set goals for our organizations in an appropriate manner in the future and overcome Marketing Myopia.
doc_228824550.pdf
This presentation describes marketing myopia Harvard Business Review in 1975 with the help case studies with Indian perspective.
Marketing Myopia
Group No. 3
Pooja Botadra (103) Arpita Desai (104) Devanshi Desai (105) Connie D’souza (110) Evellyn Goes (114)
2009-2011
Table of Contents
I. II. III. A. B. C. D. E. F. G. H. IV.
Introduction .............................................................................................................................. 3 Analysis ..................................................................................................................................... 4 Indian Case Studies ................................................................................................................ 7 Indian Postal Service .............................................................................................................. 7 Indian Premier League ........................................................................................................... 9 Photography Industry .......................................................................................................... 12 Music Industry ..................................................................................................................... 13 Ambassador ......................................................................................................................... 14 Amitabh Bachchan ............................................................................................................... 17 VLCC: Vandana Luthras Curls and Curves.............................................................................. 19 Malls: A successful attempt in Overcoming Marketing Myopia............................................. 20 Conclusion ........................................................................................................................... 21
I.
Introduction
“Marketing Myopia” is an article published in the Harvard Business Review in 1975. The very fact that it is still being used as a teaching tool in a marketing class in 2006 speaks volumes for the article’s central message, that top executives must define their industries correctly. It seems simple enough, and yet Levitt supplies the reader with many examples of industries that have either given up profitable opportunities or simply drowned in a sea of red due to their industry classification. Today, fast changing technology is bringing about a discontinuous change, that is, change which has no connection to the past. So where the competition will come from, one doesn't know. Fax machine have become obsolete because of email. Landlines are becoming obsolete because of mobile phones. You can watch movies on demand on your TV or mobile phone. You can take care of your customers all over the world from a single location cost effectively. We do not know where technology is going to take us. It is because of this that it will increasingly become more and more important to define your business in a broad manner based on the benefit that your products of services provide to the end consumer. Exactly, what Levitt suggested in 1975, before you sit down to develop any strategy, first establish "What business you are in?" and "Who are your competitors?" Remember, to define your business broadly based on the "benefit" it provides to the customer and not on the "product type."
II.
Analysis
Industry classification errors do not occur because top management believes that it operates in a different field than it actually does, per se. Rather, Levitt drives home the point that most successful companies identify themselves to be a part of larger industries. For instance, McDonald’s and Burger King may think of themselves as being in the restaurant business, but in reality they should realize that they are in the business of feeding the hungry; Exxon Mobil and British Petroleum, likewise, may consider themselves to be in the petroleum industry, but they are in fact in the business of producing usable energy for the average citizen. Levitt gives many examples of industries that have completely failed, including a humorous anecdote about a British millionaire who, myopic and overly optimistic, “unintentionally sentenced his heirs to poverty” by putting all of his estate in street car securities. Levitt continues that is posthumous declaration, ‘There will always be a demand for efficient urban transportation,’ is no consolation to his heirs who sustain life by pumping gasoline at automobile filling stations.” This goes to show how real the possibility of being inflicted’ by marketing myopia is, even for seasoned businesspeople. Notice also that, in this specific case, the posthumous declaration is right on target, but it is not explained just how people would obtain their transportation. Obviously street cars have evolved. This concept is at the heart of Levitt’s article. Rather than defining one’s industry to be “the street car industry” or “the railroad industry,” companies would be much more successful if they thought of themselves as being in “the transportation industry.” After all, most of the time technology evolves but the needs to be fulfilled remain the same. Another cause of marketing myopia is what Levitt calls the “idea of indispensability.” This concept is embodied by many industries, including the petroleum industry. Levitt says that “The petroleum industry is pretty much persuaded that there is not competitive substitute” for its products, and that all energy providers will ultimately use a derivative of crude oil, whether in the form of gasoline, diesel, or kerosene. This self-assured attitude exists “despite all historic evidence against it,” writes Levitt, going on to cite the times when the petroleum industry literally almost fell to its knees. For instance, Levitt speaks of the gas revolution that posed a threat on the petroleum industry, although ironically it is none other than the petroleum industry that owned the natural gas it was threatened by. “By all the logic of the situation,” writes Levitt, “the oil companies themselves should have made the gas revolution. They not only owned the gas; they were also the people experienced in handling, scrubbing, and using it, the only people experienced in pipeline technology and transmission, and they understood heating problems.” And yet, the natural gas revolution took place outside of its owners’ industry,
posing a threat rather than an opportunity for those who should have reaped its benefits by default. This is just one example of how defining an industry correctly can be the difference between sweet success and not-so-sweet bankruptcy. The example of the petroleum industry illustrates the point that companies should not work against new technology and innovative ways of fulfilling needs. This is a rather obvious concept, but when businesses have invested millions of dollars conducting their activities a certain way, it is not easy to simply embrace new techniques and release old ones. However, as Levitt points out, a company that is not affected by marketing myopia will realize that it cannot hold on to the idea of “doing things the way we have always done them,” because the competition will probably be doing the same things more efficiently and at less cost. This effectively makes the entire situation an “either take it or leave it” game, and those who “leave it”---ignore the new advances in competitive industries---are those that come to the brink of failure, where survival rates are slim. The foresightedness that should ideally be present to make intelligent, long-term decisions is often overtaken, partly by a fear of the unfamiliar, and partly in a seemingly natural human instinct to fight evolution. Yet another cause pinpointed by Levitt in “Marketing Myopia” is what he calls “production pressures.” It is very true that any executive would be very happy to know that his or her company has the capability to produce more products at ever-decreasing costs and sell them for ever-rising profits. However, when this type of situation exists, “all effort focuses on production and the result is that marketing gets neglected.” It is understandably difficult to persuade top management that it really needs to focus some of its energy on marketing its goods, not just producing them and assuming that they will be purchased and consumed by faithful customers, especially when their products are selling very well. It is also understandably difficult for an executive to suddenly have to face a sudden change in the market that favors another industry that uses newer, better technology. Embracing change and not feeling assured of the market for one’s product is the map of success drawn out by Theodore Levitt. A further problem identified by Levitt is the danger of research and development, especially in industries that are becoming increasingly technical. “Because electronic products are highly complex and sophisticated, managements become top-heavy with engineers and scientists. This creates a selective bias in favor of research and production at the expense of marketing.” This creates an atmosphere of creation and delivery rather than that of listening to and satisfying customers. Marketing is given what Levitt terms “stepchild status.” This is the epitome of marketing failure. A company’s mission statement is a powerful tool in avoiding marketing myopia.
“A mission statement specifies the organization’s overall goals and operational scope…” Levitt thinks that most companies fail when it comes to correctly describing their operational scope, and think of their industries too narrowly. According to Levitt, corporations need to go down to the most basic level of the need they are ultimately fulfilling, whether it is quenching people’s thirst or giving them a mode of transportation. This view has many practical applications. For example, Levitt describes the “fiscal purgatory” that Hollywood suffered through as a result of its incorrect definition of its own industry. Hollywood thought of itself as being in the movie business, and consequently saw any other form of entertainment, such as the rise in the popularity of television, as a bitter foe. However, had Hollywood defined itself to be in the entertainment industry, it would have seen a great opportunity in the television section of the entertainment business, and evolved to create more television shows than movies. Movies, of course, were on a steady decline, but since Hollywood felt threatened, not relieved, by the success of television, it paid the price through waning profits and lots of headache. Theodore Levitt’s prescription for the phenomenon he calls marketing myopia is simple: go back to basics. If companies would only reflect on what they really do, and how they fit into the grand scheme of things, they would probably gain a lot of insights into the directions they should be heading in and the future hurdles they should be planning to avoid, many times by seeing them as best friends, not bitter enemies. Executives would, if they look at their companies from a broad perspective, be able to integrate their customers’ needs and create products that really satisfy them. After all, the end consumers are the bloodlines of the company, which would produce goods and services for no one if their target markets did not exist. Why, then, does Levitt cite companies that act as though they could not care less what their customers think? Obviously, they demonstrate this type of behavior by lending themselves to production rather than marketing, selling rather than building lasting relationships with their consumers. Companies need to think about why their customers need their products or services, and they need to innovate to find better ways to create and deliver these items when and where the consumer demands. Unfortunately, many companies do not seem focused on the consumer, and even the thousands of dollars they spend on “market research” usually get boiled down to a bunch of useless numbers and percentages. The complete integration of consumer needs into every aspect of the company, from chief executive officer to salesperson, from designer to distributor, is a surefire way to keep consumers happy and keep profits rising in an ever-changing world.
III.
Indian Case Studies
A. Indian Postal Service
India Post is the backbone of India’s communication structure. This juggernaut reaches the nook and corner of India . The system of carrying messages were said to exist even during the time of Allauddin Khilji in 1296. The first Post Office was established in 1766 by the East India Company . They opened the PO in Mumbai Chennai and Kolkatta. It was Mr Warren Hastings that made the postal service available to general public. India Post is functioning under the Ministry of Communication. This huge organization have around 1,50,000 offices and around 500,000 Post boxes. Till recently India Post was enjoying the Sole Supplier Status in this market. But, recently India Post had been making losses continuously and was surviving on subsidy from Government. With the private players taking up major share in the 1200 crore Courier market in India , India Post is left with the unprofitable business. India Post has a huge advantage over the private players in the reach factor. No one can match the reach of post offices and our very own “ Post man”. Through these postmen, India Post reaches all over India. It is these Post Men who is going to save India Post. Therefore, in 2008, Indian Government had decided to restructure the entire postal department. The restructuring exercise is called Project Arrow. The project aims to make India Post a logistics giant by leveraging the core strengths of the institution (from the previously narrow industry definition of just carrying messages/letters). The restructuring is being done in consultation with Mckinsey. As a part of the restructuring exercise, the institution has redefined its business. According to Professor Theodore Levitt, every business should ask this fundamental question : What Business are You In ? The answer to this question can throw up lot
of opportunities for growth. Narrowly defining the business can create Marketing Myopia which may wipe out the business in the long run. From just a postal institution , the department has reframed its business to be in the logistics service rather than just a postal service. The move is a significant step in broadening the scope of services that could be handled by this giant. It is important to reinvent the business definition since the postal service is facing competition which could make its business irrelevant. The e-mail and the rise of affordable private courier services has taken away a significant chunk of profitable business of this institution. Since it is a government department, India Post could'nt change fast to accommodate the changing environment.
B.
Indian Premier League
Cricket is the only sport in India that is considered a religion for a major section of the Indian society. The IPL is a 20-20 format cricket tournament. The idea behind IPL is to market cricket as a high involvement reality show. The IPL redefined the sport by packaging it along with entertainment and providing it to a varied spectrum of consumers. This would be a classic example of overcoming Marketing Myopia
Thinking of it from the perspective of Marketing Myopia, IPL’s success was because of the following reasons: ? Broad definition of industry: IPL broadly defined the industry in which they are operating in, right from the beginning. In other words they portrayed IPL to be in the business of entertainment and not just in the business of sports. Also within the entertainment industry they have not restricted themselves to one medium of providing entertainment i.e. the TV Channels, but also included broadcasting live on Youtube and multiplexes to reach a wider audience. ? Customer Orientation: IPL was not only product oriented but all the way it used its resources in the creation of customer satisfying needs and had a sophisticated eye for customers i.e. they had the perspective of being in the business for creating, communicating and delivering customer satisfying services. The IPL aptly picked the 20-20 format for quick entertainment
for customers who require relaxation at the end of a long day of work instead of the one-day format. The IPL look at the customer needs constantly even considering changing the colour of the cricket ball to pink in order for it to be more visible to the viewing public.
Resulting Success of IPL:
Defining the industry broadly, IPL not only benefited BCCI, the board that conducted it but also its other partners in the industry like the TV channel broadcasting it, the franchisee team owners etc. as described below: ? The biggest gainer of IPL is arguably BCCI – which raked in a profit of Rs 350 crore from IPL in the first year itself. This is be more than BCCI’s profit of Rs 235 crore for all of 2007. In all, IPL bought in revenue of Rs 1,200 crore a year into cricket, more than double the government’s entire sports budget of Rs 490 crore. Set Max, too, seems to have a winner on its hands. The channel’s revenue market share has risen from a pre-IPL level of 5.7% to 28.8%, according to a report. Its share of prime time has gone up to 29%, higher than the cumulative market share of the top nine Hindi general entertainment channels. In the second year, Sony is projected to gross about Rs 650 crore in advertising revenue for about 45 days of IPL, which would be 7% of the entire estimated TV ad revenue of around Rs 9,000 crore for the whole year. Ad rates for 10-second spots, which were at Rs 2 lakh per 10 seconds at the start of the tournament, have climbed rapidly to Rs 5 lakh. IPL’s success has also rubbed off on the franchisees.
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Resulting Impact on TV shows: TVs shows normally target specific age and need groups like women at home, youth etc. When IPL entered it did not restrict itself to a particular target group, rather it served anyone looking for entertainment. As a result, the TRPs of the TV shows were affected drastically when IPL began.
C.
Photography Industry
Technology changes have also played a major role in blurring the lines between competing products. The move to digital photography has changed the photography landscape immensely. And one player that suffered from "marketing myopia" was perhaps Kodak that got into the digital photography market later than it should have if they had seen themselves in the "image capture" market. Changes in the photography world have happened at many levels digital cameras from traditional camera makers, but also new players in the digital camera market, as well as photos from mobile phones and camcorders. This has also spawned other associated products and services - online services for printing and storing, photo printers etc. The brands and competing players are very different now - brands like Sony have exploited their strength in digital (cybershot) cameras and launched mobile phones that use the same technology as their cameras. Suddenly major mobile phone manufacturers have got into this field of "image capture".
So how does one measure the photography market now - surely we can no longer limit it to the traditional number of snaps taken and developed. We must also take into consideration images captured in any form and stored/developed in any media (SLR camera, digital cameras, camcorders with cameras, mobile phone cameras etc.). This would certainly mean that there are a lot more photographs taken now: even if not all will be printed, given that they can be stored or deleted. Share of photography and videography solutions is key given that the market itself is much more complex - digital photo printing, online storing and printing services, memory requirements for storage, PC's, memory cards, developing etc. It is quite clear that this market is one which has been redefined by technology.
D.
Music Industry
A contemporary example is the music industry. Humans have been creating music for at least 4,000 years, but the era when sounds were encased in plastic (or wax or vinyl) covers a 131-year blip on that timeline, and the CD encompasses only 26 years of that. But the music industry clings tenaciously to the concept of music as a packaged good, and continues to devote energy and dollars to compel consumers to buy CD’s.
From a Levitt perspective, the music industry should have taken this opportunity to redefine itself far beyond mere songs. Once their distribution oligopoly was blown wide open by the Internet, the major record labels should have redefined themselves as marketing companies with expertise in building and promoting music brands. These brands go by such names as “Aryans,” “Agnee” or “Pin Drop Violence” (to name a few) and the music labels should be helping those brands generate revenue streams from multiple sources, such as concerts, merchandise and commercial licensing. These multi-faceted revenue models are called 360-degree deals. Some savvier companies, such as Universal music, are already taking that approach, with the major labels only now realizing the future is not encased in plastic. A classic example of a company falling prey to marketing myopia is TIPS music. Initially TIPS dealt mainly in cassettes and was doing exceedingly well in it. However with advancing technology CD’s, DVD’s and ipods began to catch the eye of customers. TIPS being more product oriented rather than customer oriented chose to overlook this trend. And hence it wasn’t able to accurately understand the needs of its customers and hence lost out to its competitors.
E.
Ambassador
Ambassador can be called as the first Indian car. Although the car has a British legacy, it is considered as definitive Indian car. Ambassador was born in 1958. The car owes its design and technology to a British car model - Morris Oxford which was built by Morris Motor Co at Oxford UK. Hindustan Motors launched the Indianised version of Morris Oxford as Ambassador in 1958.
From 1958 to 1980's Ambassador ruled the Indian market. Infact there were only two cars in the Indian market - Premier Padmini and Ambassador. The licence raj, lack of capital and the unfriendly Indian economic policies ensured that no automobile manufacturers entered the Indian market. 1983 saw the emergence of a new era in the Indian car market. Maruti Udyog Ltd launched the Maruti 800. Soon Ambassador lost its leadership position to Maruti. The family segment which is the largest segment in the car market embraced Maruti. Ambassador was reduced to a marginal player within no time. But Ambassador had some advantages over 800 which made it dearer to certain segments. It was the only Indian car with Diesel option. During those times, there was a significant difference in the prices between Diesel and Petrol. Second advantage was the space and sturdiness of the Amby. These two factors enabled the brand to become popular among big families and more importantly among the Taxi and tour operators. Amby was perceived to be a sturdy car ideal for Indian roads. The brand also had a positive perception of being less expensive to maintain. These two were only perceptions. Infact Ambassador was expensive to maintain and even though the car looked sturdy and well built, the car lacked the quality and refinement. Rattling sounds and rusting was common complaints. But consumers bought the car because of the significant economy of diesel cars which made consumers to compromise on other parameters. Another significant market for Ambassador was the Government. Over 16 % of the brand sales came from the Government. Ambassador was the first choice for most bureaucrats .
Ambassador used to be the Prime Minister's car till 2002. That status was lost when the PM of that time Mr Atal Bihari Vajpai replaced Ambassador with a BMW Limo. Soon the officials also lost interest in the brand. With the emergence of new and better models from other auto-makers, there was a significant drop in the orders from the Government. The fall of Ambassador from a leadership position to a marginal player is a classic case of marketing myopia. For four decades, the brand has been taking its customers for granted. There are many reasons that can be attributed to this brand's failure. The fundamental issue was with the product and price. If we look at the product, Ambassador never changed with times. The brand made many cosmetic changes from 1958-2000 and three upgrades was made which was named as Mark II, Mark III and Mark IV . There was no significant value addition between these upgrades. The look and the built quality remained the same. A major change happened when the brand introduced a 1800 Isuzu engine. The Amby with Isuzu again lifted the sales of the brand. But the euphoria was short lived. The apathy of HM to offer product changes in tune with the times made the brand stale. Second factor that failed Amby was the price. HM never bothered to rationalize the price of the brand. Even now Ambassador costs more than Rs 4,80,000. At that price one could afford a more luxurious Indigo sedan. According to reports, the HM plant had achieved full depreciation in 2000. But the company did not thought of passing on the reduced cost to the consumer. Had the company rationalised the price of Amby in 2000, the brand could have survived the competition.
The nail in the coffin came with the launch of Indica. Indica took away the taxi car market from Ambassador. Again the diesel loving individual consumers had a better affordable modern car as compared to the ageing Ambassador. In order to lift the sagging sales of the brand, HM launched a radically designed Ambassador variant Avigo in 2004. Although the styling was radical, the customer response was lukewarm. Indian consumer is now spoilt with choices. The competition is immense and the quality of cars has also gone up. Consumers now have new set of purchase considerations like quality, brand, drivability, luxury, cost of maintenance etc. In the value proposition domain, Ambassador is never in the radar of the consumers. The narrowing price difference between petrol and diesel also eroded the value in investing in an old dated Ambassador.
The company also has never invested in the brand. Without investing in either brand or product, HM had sealed the fate of this brand. The question that arise is could a brand like Ambassador maintain its position Indian market despite all the competition? In the brand management perspective, its suicidal not to continuosly invest in a brand. Often heritage brands wait till it becomes dated. Once the brand becomes dated, its virtually impossible to rejuvenate the brand. The task is to prevent the brand to become dated. For that the brand has to go to the consumer for ideas. Changes in product or promotions can sustain the brand even in the light of emerging competition. Brands like Lux, lifebuoy, Surf has been successful because of continuous investment in branding and product development. Ambassador should have learned from Maruti 800. The brand is still surviving because it made changes along with the changing consumer values. Also the brand rationalised its price in the light of emerging competition which made Maruti 800 relevant even in the current market. The brand could have been relevant to Indian market as a basic family car. It is a herculean task to bring Ambassador back to life. A price below the price of Indica is the only option for the brand to keep its fortunes alive.
F.
Amitabh Bachchan
Amitabh Bachchan is one of the greatest entertainment icons of India. His career saw a major dip after he failed miserably at business. Yet today, he has come up as one of the top stars of India giving competition to actors who are a generation younger to him. His is a classic case of overcoming marketing myopia.
? Marketing Myopia of movie stars. Traditionally movie stars in India hardly came on TV. The audience had only one connection with them n that was when they saw their movie. Besides award shows, the audience could not find any medium to connect with their star. As a result they had a limited career span. What they lacking was the willingness to survive and to satisfy the audience through inventiveness and skill. ? Amitabh’s Marketing Myopia:
After being hit by a major financial crisis in 1997, Bachchan attempted to make his acting comeback with the film Mrityudaata. Though Mrityudaata attempted to reprise Bachchan's earlier success as an action hero, the film was a failure both financially and critically. ? Overcoming Marketing Myopia:
At this stage Amitabh did something very different from his counterparts. He recognized ‘ What business he is in?’. While most actors of those times thought they were in the business of acting in movies, Amitabh defined it as’ being in the entertainment business’. In the year 2000 Amitabh Bachchan barged into Indian homes with one of the most poplar quiz shows of Indian television “Kaun Banega Crorepati”. It was first time in the
history of Indian television that a movie star had become a part of a show on the small screen.
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Being customer oriented:
After the success of KBC, Amitabh has never looked back. He redefined his business and therefore could bank on several opportunities. He understood that the customer wants variety and would like to see him in different roles. He broke the myth that a person in his 60’s can only play a father’s role. Being in the entertainment industry, he has done everything from playing his son’s son in Paa to playing the lead role in movies like Bhootnath, Baghban and Chini Kum to keep his audience entertained. Thus, Amitabh appeals to every age group. Another area where he has forayed into is Advertisements. Amitabh endorsed everything- from pens to cars to hair oils to chocolates. Thus he has given his where his audience several options to connect with him using various platforms
G.
?
VLCC: Vandana Luthras Curls and Curves
Broad Definition of Business:
VLCC had defined itself as being in the wellness business. Though it began as a centre for weight management, they expanded into many meaningful areas beauty treatments, natural products, spas and VLCC learning institute. By redefining wellness, VLCC revolutionized this industry and acquired the status of India’s largest health and beauty brand. The VLCC Group, a ‘Super brand’, serves as an umbrella for all its other brands – VLCC Health Care Ltd., VLCC Personal Care Ltd. and VLCC Institute of Beauty, Health and Management. VLCC’s services provide holistic wellness, as a service, marrying scientific research and traditional therapies.
? Customer Orientation
? As the economic status of middle class Indians improved, so did their aspirations. They proactively looked at health and beauty offerings to look and feel good. ? Most businesses restricted themselves to be only in beauty or hair care or weight loss. ? Many customers wanted a one stop solution to all their wellness related problems ? VLCC recognized this opportunity and redefined its business. ? VLCC became a place where all customer needs could be taken care of. ? Thus, while there are many other single product/service focused businesses in India like Lakme Beauty salon, Kaya Skin Clinic and L’Oreal Salon, VLCC is the undisputed king of providing complete wellness solutions. ? Further meaningful expansion of VLCC brand came through the opening of VLCC Institute of Beauty, Health and Management. By overcoming the marketing myopia of beauty industry, today VLCC is the single largest player in the organized sector with a pan-India presence of nearly 225 outlets across 75 cities, 1 in Kathmandu, 9 locations in UAE, 2 in Oman, 1 in Bahrain and 1 in Al Ain.
H.
Malls: A successful attempt in Overcoming Marketing Myopia
In today’s scenario consumers look for convenience in whatever they do. Hence having all goods like FMCG products, consumer durables, clothing lines etc sold under one roof is of utmost importance, as it provides the consumers with a one stop shop. Very often in kirana shops it is seen that while they do manage to stock up groceries and the likes, they are often limited by space & budget constraints, which negatively impacts the general shopping experience that customers in such stores. It is important to remember that whilst shopping for goods, people tend to enjoy the experience of shopping rather than the goods that have been shopped for in all its practicalities. The effective placing of products on shelves, the self service option with helpers to guide one whilst shopping, the ambience, the different mix of products available under the same roof etc go a long way in creating a memorable shopping experience for customers. The mall culture that has seen a sudden boom is a perfect example of the ability of this particular industry to accurately gauge the needs of the consumers in this regard. We now see traditional markets transforming themselves in new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. Western-style malls have begun appearing in metros and near metro cities, introducing the Indian consumer to a new shopping experience. Thus malls have been able to accurately define the business that they are operating in. They are not just in the business of providing goods that are sought after by customers, they are in the business of providing quality goods combined with a whole new shopping experience that customers will find hard to forget, thus bringing these customers back in the form of repeat customers. Some of the well-known Malls would include shoppers stop, Nirmal Life style, Pantaloons etc. ? Customer Oriented rather than product oriented:
Also the food courts that one has begun too see at the top floors of various malls is another classic example of malls being customer oriented rather than product oriented. Generally normal restaurants do not serve more than 3 different cuisines, so very often when customers go out in large groups with each wanting to have something completely different from that of the other, the most apt place for them to head to is the food court at such malls. Malls would generally have more than 20 different food outlets to select from with all offering different cuisines thus catering to the different needs of different customers at one time. Hence in this way, malls have successfully shown that by orienting one’s business to suit customers rather than trying to discover ways to orient customers to like the product on offer, just takes the business a step further in terms of its success over other restaurants.
IV.
Conclusion
After having looked at all the examples, we realize that Theodore Levitt’s concept of Marketing Myopia persists even today. This is because people are unaware of the dangers of defining a business too narrowly or not concentrating on satisfying consumer needs ie product oriented products rather than customer oriented products. A continuous reassessment of the kind of society that one lives in is absolutely integral to success. The realization that we all live in a fast paced continuously evolving consumer society is a must. It will take e business a long way in terms of accurately predicting and meeting the changing needs of the customer. Companies’ either have to EVOLVE and ACCOMMODATE consumer needs OR DIE. Symptoms & comments such as: “ They have nothing on us”, “ That could never happen to us”, “ We are our own competitors”, “ Customers love our product or service regardless of what happens” are some of the marketing myopia symptoms that companies need to clearly identify and stay away from. We need to understand that the problems that exist in the world today cannot be solved by the level of thinking that created them we need to go a step further and delve into the intricacies of the problem. This is possible only when organizations are able to accurately predict and define the problem that they are likely to encounter in the future, and work towards minimizing or altogether nullifying these problems with innovative & unconventional management. Conventional management is a symptom of marketing and management myopia because the system in which managers are groomed is indiscriminant of whom it captures and who’s mind it handicaps by restricting their thinking to “tried and tested” thought processes. We need to understand the concept thoroughly in order to set goals for our organizations in an appropriate manner in the future and overcome Marketing Myopia.
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