Marketing Myopia by T. Levitt Critique - Essay Example

? The article Marketing Myopia is a very informative and interesting piece of marketing literature. One of the main points of the article is that companies should be customer oriented instead of product oriented. Two industries that were not able to take advantages of market opportunities due to their product centric mentality are the railroad business and the Hollywood movie industry. The author analyzed the nylon and glass industries through the analysis of two real firms: DuPont and Corning Glass Works. Both these companies were product centered, but they were also customer oriented as well. The aluminum business continues to be a growth industry. Companies should satisfy customers through inventiveness and skill. The dry cleaning industry is currently an industry that is in turmoil. Innovations such as synthetic fibers and chemical additives have cut the need for dry cleaning. Utilities may be natural monopolies now, but in the future the rise of renewable energy sources such as solar can replace the need for the electric grid infrastructure. The supermarket industry is extremely competitive and has many participants. Market changes can alter the longevity and profitability of an industry. According to Levitt (2004) there is no such thing as a growth industry since there are only companies organized and operated to create and capitalize on growth opportunities. The oldest growth industry is the petroleum industry. The population myth is the belief that profits are assured by the expanding and more affluent population. In an expanding market companies often fail to apply imagination in its decision making. The petroleum industry is an example of an industry that has become complacent in its business practices due to the fact that the petroleum industry’s efforts have focused on improving the efficiency of getting and making its product, not really on improving the generic product or its marketing. This has cause innovation to be stagnant among industry participants. The development of superior alternative fuel has come from outside the oil industry. The oil industry is convinced that there is no substitute for its major product, gasoline. The most important innovation that had a great impact on the demand for crude oil was the invention of the combustion engine. The combustion engine created the demand for gasoline. An industry that is competing with the oil industry is natural gas. Natural gas serves as a substitute product of heating oil. The U.S. production of petrochemicals accounts for 2% of the demand of all petroleum products. The industry is growing at a rate of 10% per year. There is no guaranteed for obsolesce of a product in the future. When companies focus too much on production their marketing efforts get neglected. Unit costs decline as production increases. Mass production creates greater pressure to move the product. Marketing oriented companies try to create value-satisfying goods and services that customers want to buy. The seller is supposed to get input from the buyer to determine what goods the seller should offer to its customer base. The automobile industry spends millions of dollars annually on consumer research. The Detroit auto industry has not been doing enough to satisfy the needs of the customers. Some of the weaknesses of the U.S auto industry are point of sales, automotive repair and maintenances. The mentality of the Detroit executives is that marketing is a consequence of the product instead of vice-versa. Henry Ford is the most brilliant and senseless marketer in American history. A concept discussed in the article that I believe is extremely important is the emphasis on customer orientation instead of product orientation strategy. Focusing on the customer has become more important than ever in order to improve the customer retention rate of the enterprise. Competition is tougher than ever in virtually every industry. Today American companies face major competition from foreign companies. An advantage of the globalization movement is access to a large supply of skilled workers. A second concept that was analyzed in the article is the negative effects that overconfidence can have on the marketing efforts of a company. Many companies do not plan for the future adequately during the growth cycle. An industry that lacks marketing innovation due to the overconfidence of its executives is the petroleum industry. The current price of a crude oil barrel is $84.79 (Oil-price, 2012). A high crude oil price has negative effects on the economy because it increases the price of electricity which raises the operating costs of business entities. In the author’s discussion of the oil industry he failed to mention the inevitable demise of the industry that should occur in the near future. At some time between 2010 and 2020 the oil reserves will run out implying that the demand for oil will be higher than the supply (Theinsider, 2012). I would have liked more discussion in the article in regards to the alternative fuel technologies that are going to replace crude oil gasoline in the future. I agree with the author claim that seller should get input from buyer to determine its product offering. Companies that have good communication with its clients due to the effective use of feedback systems and other communication tools are able to achieve higher levels of success. Companies should develop close relationships with its clients in order to satisfy their needs. I liked the fact that the article provided many different examples from a diverse group of business industries. This technique used by the author helped me visualize how theory can be applied in the real world. I learned after reading this article that marketing is an important function in every business industry. Undermining its importance is a formula for business failure. Another lesson learned from the article is that overconfidence and lack of research inhibits the creativity of an enterprise. Marketers have to keep up today with the newest advertising trends such as online marketing and cellular phone advertising. Focusing on the marketing function can help organizations increase their sales numbers and customer retention rate. Marketing has become a critical success factor in the 21st century. References Levitt, T. (2004). Marketing Myopia. Harvard Business Review. Oil-prices.net (2012). Crude oil and commodity prices. Retrieved November 4, 2012 from http://www.oil-price.net/ Theinsider.org (2012). World’s Oil will out in ten years. Retrieved November 4, 2012 from http://www.theinsider.org/news/article.asp?id=0423 Read More