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Marketing Myopia - Defining Business Strategy
One of Levitt’s most prominent examples is the railroad industry. In the early days of the railroad industry, businesses were overly focused on developing and expanding their railroads that they failed to see the potential of the automobile and other modes of transport. As a result, the railroad industry missed out on a major market opportunity and could not recover. Levitt attributes this to a management failure because they defined their business around railroads rather than the more significant objective, getting from point A to point B; transport.
This perspective is quite interesting. When one comes to terms with the idea, it seems rational in the truth that businesses are conceived because they feel they can satisfy a consumer need, and if that need is no longer required, there is no longer business. As Levitt stated, “If a company’s own research does not make a product obsolete, another’s will” (Levitt, 36). What Levitt attributes this failure to is not that they are not attempting to sell more but rather that their service portfolio is misaligned with current and future market demands. Businesses tend to fall into the logical fallacy of thinking that because they began operations in times of demand for a particular offering, this demand will continue to persist and that their old ways of marketing will continue to draw in business growth. What they miss out on is that the business dynamic is fast-paced and ever-changing under the laws of ruthless market norms.
Levitt made a fascinating point when it came to the automobile industry. He used gas stations as a metaphor for tax collectors- no matter how refined the marketing is, the principal values are disliked. No matter how you look at it, oil is oil. He indicated that with the advent of methods of transport that eliminate the need to interact with gas stations, consumers would flee. This is precisely what is happening with the inception of electric vehicle manufacturers such as Tesla, whose very USP lies in the very fact that customers do not have to deal with oil and people who want to take their money [1].
Marketing Myopia - Image Sells
Case Study: Fashion
A common mistake in business is conflating product quality with demand. So what is the deal here? How can brands such as LV become a success by selling objectively overpriced items and have consumers who have an inflated view of the item’s value? The answer is marketing. What LV may be selling you is their high perceived quality, but what the consumer really ends up buying is the brand’s perceived image. It is a matter of irrational consumer behaviour; everything from the logo to their marketing campaigns is catered toward portraying an elitist image. This is not to say quality does not matter, but that it does not supersede the importance of marketing. It does not matter how good a product is if there is no attention. According to LV’s holding organisation LVMH, they experienced organic growth of 36% (LVMH).
Suppose you consider that Supreme also sells equally marked-up clothing at a comparable level of quality and excuse the difference in their scales of operation. In that case, you might be wondering why Supreme is not embracing its sales growth. Unfortunately, the sales trends of Supreme have been shrouded in secrecy by their holding organisation VF. I would only imagine strong growth would follow a positive statement about Supreme's stance. In fact, there was no mention of their sales, which were outright excluded with the following rationale, "exclude the contribution from the Supreme brand through the one-year anniversary of the acquisition" (VF Corporation). Instead, VF released expectations of generating strong sales of $600 million for 2022. I say this statement offers nothing more than some wishful thinking.
Nevertheless, the matter of whether this was intentional to hide their less than ideal market growth is trivial. The more pressing issue is that consumer perception of Supreme's relevance has been on a steady decline. This is evident in all forms; their new clothing 'drops' are no longer sold out in a matter of minutes, nor is Supreme the burning topic amongst the streetwear fanatics (Servantes, Ian). Why is this so? I aim to attribute this in two ways. One that Supreme, from Levitt's standpoint, has failed to adapt to the changes in its target market. In essence, the hype of "exclusivity" can only last for so long, and it appears that the market is catching up to this realisation. Two, in MIT professor Dan Ariely’s language, Supreme has set up a lackluster anchor that associates exclusivity with prestige rather than the brand itself (Ariely, Dan). Supreme is in the clothing business but is actively distancing itself from its target market, a target market whose attention was only brought by short-term hype. If Supreme is to escape the niche target market it has engulfed itself in, it must rethink its marketing strategy in a way that is geared toward creating a memorable and long-lasting brand image (not merely on the backs of some celebrities). For now, only time will tell how this persistent stance on exclusivity and the adamance on a “no mainstream ATL marketing strategy” will play out in the long run.
Marketing Myopia - Customer First
Case Study: Technology
If you take a moment to consider the innovation Apple has done over the years, many would say it is marginal. I find this interesting on two fronts. One is that this is partially incorrect since our ideas of what is considered grand innovation have been clouded by competitors who are gasping to release another hyped product. The other is that Apple is slow at rolling new changes because, as the age-old saying goes, 'do not fix what is not broken.' Innovation that does not enhance the product's value is merely creativity [2].
Marketing Myopia: Takeaways
- Realise what line of business you are in; live and breathe its vision.
- Distinguish utility and quality; do not mistake utility for quality.
- Prioritise needs; market orientation over product orientation.
Marketing Myopia: Key Quotes
Marketing Myopia: Works Cited
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