In a classic 1960 Harvard Business Review article titled Marketing Myopia, Theodore Levitt posed the question, “What business are you really in?” On the surface, it seems like a simple enough question that any business owner should be able to answer. In reality, it’s much more complex and many owners don’t answer it correctly. Levitt, a lecturer at the Harvard Business School, cites some classic cases of products that failed because the proprietors didn’t understand what business they were in. He also explains how company leaders can avoid the same fate. It may be 54 years later, but Levitt’s advice still rings true.
Take railroads for instance. There was a time when the railroad “business” seemed indispensable and invincible. There was no other game in town and the rail industry made families wealthy beyond belief. Unfortunately, none of them realized that railroads were a product and not a business – they were in the transportation business. They failed to understand their customers’ need, which was the best, most affordable, most efficient mode of transportation. Along came trucks, airplanes and buses, and all of a sudden they were vulnerable.
This topic relates to last month’s marketing post about conducting a SWOT analysis and understanding your customers. Can you identify the business you’re in? Do you know what your customers’ perceptions of your company are and whether it’s the perception you want? The term “future-proofing” has become a little cliche, but the idea is good (that’s why it’s a cliche).
Nobody can accurately predict future trends all the time, but people like Warren Buffett or Steve Jobs have shown us how it can be done more frequently. With the right mindset, some focus and some research, most businesses will avoid getting railroaded into obscurity by the very industries they should have been serving all along. If you want to find out more about Levitt, simply search “marketing myopia theodore levitt” on Google and you’ll find your way to his enduring wisdom.
Director of Communication & Marketing, NPCA