How can a company ensure its continued growth? Theodore Lewitt in 1960 beautifully anticipated and answered that question in a new and challenging way by urging organizations to define their industries broadly to take advantage of growth opportunities.
In his article “Marketing Myopia”, Theodore, explains the short-sightedness of a business to segment itself in a particular industry which results in a business risk of continued survival and growth.
How can railroads which have been broadly spread but cannot make the use of its network to solve the transportation problem but losing their business to trucks and tempos? How Hollywood being in the entertainment industry lost their share against the T.V.? These questions can trouble the manager in you because the solution is about adopting the change not competing with it. Had it been the concern of rail management to be customer-oriented and bring all those changes to solve the transportation problem which their customers are facing they would have not lost against cars, trucks, aeroplanes and even telephones! They would have not waited for state governments to start metros but would have entered themselves to not sit back and lose.
Had it been the Hollywood would have adopted the T.V. as an opportunity they would not lose against it when both are in the entertainment industry!
Whenever a new player enters the industry with a newly designed product or approach the success and survival of the veterans in the industry depends upon the reaction they show. If they exclude accepting the new design they have to share the market. If they don’t react and continue in their way they can lose the market too. For example, Nokia which was once the only choice of every Indian didn’t respond to Google’s Android and the fate we all know. Every major industry was once a growth industry but some after riding the growth wave decline quickly not because the growth is saturated but because of the poor management decisions and analysis to not compete with the threat and run at its own pace. They end up adopting the myopic approach.
Every business one observes in the market was once a major industry, people have thought to earn fortunes with their business but they lost. For example, Dry cleaning had been a lucrative profession till the 1980’s when wool had no competition against the cotton but with the growth of the synthetic fibre, it loses the market. Is there a better alternative to clean woollen cloth than dry cleaning it? NO! They lose simply because they thought to be in the cleaning business but they were in the woollen business. They let synthetic fibre take over the woollen fibre. Every natural monopoly grows but tomorrow they will seek natural death if they forget to survive themselves and become obsolete; if they forget to innovate, improve and be customer-oriented.
Let me drive you into the heaven of every businessman, that is having a product which has an ever-expanding customer base which is affluent enough to pay what is demanded. Growth, growth and growth. But if thinking is an intellectual response to a problem, then the absence of a problem leads to the absence of the thinking. But if your product has an automatically expanding market, then you will not give much thought to how to expand it. Oil is always been considered as the commodity of repute and the Middle East is seen rich because of the oil abundance. Before Edison, the oil was being used to light up the houses. But a single bulb invention changed the focus from oil. The same has happened in the furnace industry, railroads and now the change is entering in consumer vehicles too. Had it been the oil industry would have taken the opportunity to broaden its industry from just being a raw material the obsolescence would have not been waiting. They didn’t even bring the gas revolution themselves even when they own it. It’s the automobile industry which is working in the development of better engines but if the oil industry would have invested in it then they would not just remain as raw material and become on verge of obsolescence. The idea of being indispensable has a fate similar to this. Crude has lived the indispensability but now the world forces are being a threat to its survival. So the right way to put the Middle East is, hadn’t they found the oil they would always be the cattle herder which they were till the 19th century.
It’s always been the case that a young entrepreneur seeks to attain the economy of scale but interestingly thriving to get the scale he forgets to market the product but instead invests in selling it. Marketing efforts are always seen as a consequence of the product, not vice versa by the viewers. This is the biggest failure of any business. We all know how selling focuses the need of the seller and marketing focuses on customer orientation and acceptance. But when economies of scale is pushed into the distribution channel it just becomes selling for the customer. Customers don’t feel the attention which they cherish for a new product acceptance. We can learn a lot from Elon Musk, how he is able to market Tesla’s Upcoming Cybertruck or Nueralink’s mission and vision. He gained the eyes and acceptance from a huge audience from the time when both companies are not ready with even a single final product but just with a prototype. He has sold his expectations to millions of us and we will be dying to hold the technology targeting another 5years. A great marketer isn’t it. Knowing the profit possibilities stubborn a person for his low unit production costs but it’s just a gimmick in real life. Low-cost targeting business usually fails or becomes obsolete because of either of two reasons. First, they stop innovating and limit themselves to their product and become obsolete as in the case of Nokia we discussed. Or second, they just can’t bear the competition of low-cost maintenance. We can think about Flipkart in this case. Even after continuous development, the business isn’t profitable yet because they have made customers which are loyal to sales not to their branding. If your product can’t motivate the customer to spend a premium in starting then sustainability is a big question.
Breaking the last straw, have you wondered why a non-tech functional leader has a better market competency? They search for the incredible without the limitation of bias (limiting) scientific principles. That’s how every business started with a simple vision made upon a certain problem that needs to be solved. In a vision, every person will cherish to hold those customers which are fully satisfied, not the one’s which they finally become after the continuous sales approach. R&D has made the world dynamic but it has its dangers. Too much focus on tech advancement may lead to the creation of a product which is not digestible for the consumers. They want small and noticeable changes from which utility and ease could be attached. If this cycle breaks and the business is in the assumption that superior products automatically sell than its amateur. Product-oriented management will be an affliction, who fail to perceive their consumers’ needs and demand. For example, Tata Motors is lately manufacturing great cars. 5 stars safety, Harmon music system, whatnot. But they had failed the very platform in which their customer interacts with. The dealers and the service partners. The impact is when a consumer has a genuine demand and he researches the market, he isn’t able to decide Tata product over Maruti one’s. Why? Because Tata has genuinely invested in R&D of the product but Maruti wins in selling the after-sales experience. As buying a product is a momentary action but maintaining a car for the next 10 years is the biggest challenge and Maruti understands it. Therefore the customer starts with Tata Car seeing its value proposition but ends up buying Maruti, which is just maintaining a close competition not par in terms of R&D. The view to maintain that the industry must be a customer satisfying process, not a goods-producing process is vital to all businesses to understand. Even for Sony and LG which are pioneers in the field of the camera, music and screen technologies weren’t able to market their offering in the recent Mobile Markets even when all other companies are using their technology. In R&D conditioned management they sometimes even don’t know what is their actual market, just because of their huge volumes get consume-up they learn from the response from sales. Customer orientation is always missing.
The organization must learn to think of itself not as producing goods or services but as buying customers. Customer creating and a customer satisfying approach is the key to get in the market. Selling through ads will eventually make the public know the short-sightedness of the business. The journey from Noun to Verb is the most impactful because now we don’t only use Google to search things sometimes we just google it.