An Integrated View Of Marketing Myopia

AN INTEGRATED VIEW OF

MARKETING MYOPIA Michael D.Richard JamesA. Womack Arthur W.Allaway

Since its introduction, much has been written on t h e various aspects of Marketing Myopia. It appears that Marketing Myopia pertains to seveml types of narrow-mindedness. The purpose of this article is to organize the fypes of Marketing Myopia in a classification scheme. The analysis suggests a new perspective, which can result in cross-fertilization of ideas and, in turn, produce innovative marketing strategies. This article will briefly review the different explanations of Marketing Myopia and then classify the types along two dimensions.

The proposed analysis is also intended to enrich rather than replace the existing explanations. Thus, the integrated analysis will serve to clarify and reinforce the caveat proposed 30 years ago. The indicants of Marketing Myopia include a lack of vision and selfimposed strategic limitations on the part of the firm. Finally, the analysis suggests a new perspective for the firm;a recommendation for seeking innovative marketing strategies in order to remdve some of the myopia-caused restrictions on the mnge of stmtegic options.

Michael D. Richard is Assistant Professor of Marketing at Mississippi State University. He received his Ph.D. hom the University of Alabama Dr.Richard's research and publication interests include choice models, market share models, and marketing strategy. Jamas A. Womack is a graduate student at Auburn University. Mr. Womack's research interests include marketing strategy and personal selling. Arthur W.Allaway is Associate Professor of Marketing at the University of Alabama. He received his Ph.D. from the University of Texas. Dr. Allaway's research and publication interests include choice models, market share models, and optimal control models.

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Foundations of Murketing Myopic

Marketing Myopia was initially described as a firm’s shortsightedness or narrowness when it is attempting to define its business.4 Marketing Myopia is analogous to a product orientation, whereby the firm defines itself as a product-producer. One alternative is a customer orientation (i.e., the Marketing Concept), whereby the firm defines itself as a satisfier of customer wants and needs; that is, the customer orientation helps the firm to anticipate and adapt to changes in customer demand.4 The customer orientation has also been considered as a type of Marketing Myopia, Firms overemphasize the satisfaction of customer wants and needs8 and, as a result, have ignored competition. A competitor orientation has been proposed as a replacement for the customer orientation: with this orientation, a firm’s strategy is influenced by its competitors.8 Manager tenure has also created a type of Marketing Myopia. Some marketing managers possess too narrow a perspective as a result of spending their entire career in a single industry.’ This myopia fosters the erroneous mindset that each industry is unique. It restricts the firm’s ability to learn from the experiences of firms in other industries facing parallel problems and opportunities. hh#Marketing strategies transcend industry boundaries.’ Finns can solve marketing problems and exploit opportunities by looking beyond immediate competitors €or strategies. A broader perspective can result in cross-fertilization of ideas and, in turn, produce innovative marketing strategies?

Dimensions of Marketing Myopia

The preceding discussion suggests the need for a systematic way to classify the types of Marketing Myopia. The types can be classified along two dimensions. The first concerns management’s definition of the firm. Firms can be narrowly defined by the type of product pro-

duced. Such firms are inward-oriented toward the firm. For example, a firm can be defined as a cold breakfast cereal firm.

Firms with a single-industry perspective are preoccupied with the actions and reactions of immediate competitors. Firms can be more broadly defined by the nature of the customer wants and needs satisfied. These firms are outward-oriented toward the market. Thus a firm can be more broadly defined as a breakfast foods firm.

The second dimension concerns the firm’s business environment perspective. In essence, these firms have an inward orientation toward that industry. Firms with a single-industry perspective are preoccupied with the actions and reactions of immediate competitors. In addition, they are considered to have inbred management. Some managers have spent the majority of their professional careers in one industry. Inbred management is not necessarily undesirable, but it is potentially detrimental when it fosters the contention that it can learn nothing horn firms in other industries, and it keeps its firm perceptually insulated from such other firms.For example, managers of the cold breakfast cereal firm may be concerned only with the actions and reactions of other cold cereal firms. Firms with a multi-industry perspective, on the other hand, have a broader outlook of the market. While they are concerned with immediate competitors, they also realize that firms in other industries can serve as sources of innovative strategies as well as being potential competitors. Such management is said to be cross-bred, in that managers may have experience in a broad range of industries or they are willing to learn from firms facing similar situations in other industries. Firms with a multi-industry perspective are outward-oriented and not perceptually insulated from other industries.

These dimensions provide the manager with a way to consider systematically the types of Marketing Myopia.

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AN INTEGRATED VIEW OF -GMYOmA

The combination of the two dimensions produces a matrix with four scenarios: (I)Classic Myopic firm,with a product definitiodsingleindustry perspective, (2) Competitive Myopic firm,with a customer definition/single-industry perspective, (3) Efficiency Myopic firm, with a product definition/multi-industry perspective, and (4) Innovative firm,with a customer definition/multi-industry perspective. While the dimensions are depicted as dichotomous, they are actually continuous. A given firm may not always fall clearly in the center of any scenario, but may be positioned throughout the matrix depending on the degree of commitment to any of the dimensions. These scenarios are presented in Figure 1.

Classic Myopic Firm The Classic Myopic firms are those associated with a product definitiodsingle-industry perspective. These firms are narrowly defined by their product and so do not practice the Marketing Concept. They possess a singleindustry perspective, being concerned only with the actions and reactions of immediate competitors. Management is inbred, and since managers consider their industry unique, they are unwilling to learn from firms in other industries. Because of the lack of cross-fertilization of ideas, firms with this type of Marketing Myopia are limited in strategic a1ternatives. ALP serves as a prime example of the Classic Myopic firm. A&P’s management defined the

organization by the type of products sold (groceries). This definition led to the decision not to add highly profitable non-grocery items as competitors did. The wants and needs of the consumer were also ignored. Consumers increasingly desired such features as national brand merchandise, a deli, a seafood section, and extended hours. While A&P resisted these changes, other grocers were pleased to offer these features. In essence, A&P failed to practice the Marketing Concept. A&P also had a single-industry perspective. While other grocers looked to different industries for distribution expertise (e.g., computerized warehousing), A&P adhered to outdated methods of distribution. When faced with extinction, A&P applied “grocery solutions” to the problem: it engaged in aggressive price-cutting to attract customers. However, this strategy proved unsuccessful.

Elgin Watch is a another example of the Classic Myopic firm. Elgin defined itself as a producer of fine, traditionally styled, manually-wound watches. Elgin was not aware of the changing consumer tastes for watches, the fact that consumers increasingly desired lowpriced and convenient (i.e,, self-winding) watches. Elgin Watch also had a single-industry perspective. It was taken by surprise by a new class of competitors entering the market. The semi-conductor manufacturers were seeking applications for digital watches. They captured

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a large share of the market by offering the consumer low-priced, self-winding watches. In addition, they employed new channels of distribution [mass merchandisers and discounters) which had been overlooked by Elgin.

industry perspective, did not adopt the sophisticated marketing techniques and, as a result, its market share was cut in half within five years.

Competitive Myopic Firm The Competitive Myopic firm is analogous

The EfficiencyMyopic firms only partially embrace the innovative firm idea.’ The Efficiency Myopic firms are those associated with a product definition/multi-industry perspective. These firms are defined by the product and so do not practice the Marketing Concept. Since they have a multi-industry perspective, they do look to other industries as potential competitors and as sources of solutions to problems. Managers are crossbred, and their experience in other industries, or their acceptance of the notion of similarities between industries, contributes to their willingness to learn from firms in other industries. As a result of cross-fertilization of ideas, these firms have somewhat more strategic alternatives than the previous two myopic types. However, rather than looking to other industries for marketing solutions, these firms, concerned with improvements in production efficiency, borrow only technological innovations. Their marketing managers assume that consumers desire less expensive and/or more efficient versions of existing products, and so are apt to introduce new and improved versions of existing products.

tb a compromise between the customer and

competitor orientations. These firms are associated with a customer definition/single-industry perspective. They are defined by the customer wants and needs satisfied, and so they practice the Marketing Concept. In addition, they have a single-industry perspective, being concerned only with the actions and reactions of immediate competitors. Managers are also inbred, adhering to the notion of the uniqueness of their industry. Therefore they are not willing to learn from firms facing parallel situations in other industries. As a result, there is no cross-fertilization of ideas. While these firms practice the Marketing Concept, they lack creativity in strategy. Therefore, such firms are limited in their strategic alternatives. They tend to think in terms of acceptable businesses or expansions for the industry they are in, and they are likely to mimic similar firms’ marketing actions. Line extensions and “me-too” products are popular strategies for this type of firm. Schlitz Brewing is an example of the Competitive Myopic firm. It did practice the Marketing Concept with its customer definition, as is evidenced by the introduction of a myriad of product extensions (e.g., light beer and premium priced beer). When Philip Morris purchased Miller Brewing, tobacco executives were brought in to run the ailing brewing company. This infusion of talent was responsible for the introduction of a host of marketing strategies to the brewing industry [e.g., product segmentation, target market advertising, and efficient distribution]. These ideas were also embraced by AnheuserBusch. As a result, the market share of both soared. In contrast, Schlitz, which had a single-

Effidmcy Myopic Firm

General Foods serves as a prime example of an Efficiency Myopic firm. While very successful in food processing, General Foods did not achieve success in the fast-food restaurant business with its purchase of Burger Chef. Management defined Burger Chef as a fast-food hamburger restaurant. As a result of this product definition, Burger Chef lost market share to competitors that introduced such items as fish sandwiches, chicken products, and a salad bar. General Foods did possess a multi-industry perspective and attempted to apply food-processing skills to fast-food restaurants. Unfortunately, the multi-industry perspective did not offset the problems associated with product definition.

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AN INTEGRATED VIEW OF MARKETING MYOPIA Recent woes at IBM demonstrates the problems associated with an Efficiency Myopic firm.6 IBM has defined itself by its product (computers). While Japanese computer firms deployed systems engineers to assist customers in developing software (and gained valuable customer information in the process), IBM declined to provide this service. The Japanese have used their knowledge of customer needs to capture market share in the mainframe computer market.

PC industry. Since Sculley became CEO of Apple, revenues have quadrupled and return on shareholders’ equity is the highest in the industry.3 Much of this success is attributed to Apple’s new low-priced PC, the MacIntosh Classic. Some of the marketing strategies of the soft drink industry appear applicable in the PC industry. Even the name MacIntosh Classic has a cola counterpart (Coke Classic). In 1989 Xerox won the prestigious Malcolm Baldridge National Quality Award while regaining much of its lost market share.9 Much of the Xerox success is attributed to its embracing of benchmarking. Xerox monitors performance in several product and service areas, and the ultimate goal for each area is the level of performance achieved by the world leader, regardless of industry. For example, the benchmark is L.L. Bean for distribution and American Express for billing.9 In that sense, Xerox epitomizes the multi-industry perspective. As a result, Xerox’s market share and customer satisfaction have soared.

Firms with a multi-industry perspective have a broader outlook of the market. While IBM’s expertise was in the mainframe computer market, it proved that it had a multiindustry perspective. As a late entrant to the PC market, IBM proved that it could produce and market a new product. However, the multi-industry perspective has not enabled the company to capture lost share.

The Innovative firm is associated with a customer definitiodmultiindustrv nerspective.

InnwcrtiveFirIxl The Innovative firm is associated with a customer definition/multi-industry perspective, It possesses none of the narrowness of the previous firms. These firms, being defined by the customer wants and needs satisfied, practice the Marketing Concept. They also possess a multi-industry perspective, looking to other industries as potential competitors as well as sources for solutions to problems, and so they apply innovative strategies borrowed from those firms. Management is cross-bred and willing to apply new strategies to marketing problems and opportunities. As a result of cross-fertilization of ideas, these firms enjoy a wide range of strategic alternatives. They are farsighted or flexible enough to apply unique solutions to problems and opportunities.

Wal-Mart Stores is still another Innovative firm.1 Wal-Mart provides a variety of merchandise at low prices to small towns in the United States, markets that have been ignored by other retailers. While many retailers subordinate distribution to merchandising, Wal-Mart has borrowed sophisticated distribution practices from other industries. Such innovations as the handling of palletized quantities and a state-ofthe-art warehouse scanning system have lowered costs for Wal-Mart.1 Even the practice of greeting all customers as they enter the store is a borrowed strategy from the hotelhestaurant industry. Wal-Mart has enjoyed a meteoric rise in the field of retailing.

One Innovative firm appears to be Apple Computer.3 The hiring of John Sculley from Pepsico reveals Apple’s willingness to apply marketing strategies from the soft drink to the

The Innovative category implies a new perspective on the part of the firm. First, the firm should seek to satisfy customer wants and needs. Second, the firm should realize that 69

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THE JOURNAL OF CONSUMER MARKETING other industries can be sources of innovative strategies for reaching the consumer. Both strategies are important in order to achieve performance objectives. Of course, the Innovative firm will provide little benefit without effective leadership to implement these strategies.

Marketing strategies transcend industry boundaries. The Innovative firm is not intended as a cure for Marketing Myopia, just as the Marketing Concept was not meant as a cure.5 The Marketing Concept has, in some cases, been carried to an unproductive extreme.5 The same is possible with the Innovative firm perspective. However, what is important in this perspective is to not overlook other industries and thereby to remove some of the restrictions on the range of strategic options.

Managezlal -

Recommendations For marketing managers who consider the Innovative firm orientation desirable, the obvious question is how to achieve it, Five recommendations are offered here. 1. Take a generic view of your firm/industry. Determine how the firm/industry has been defined and consider a broader definition. A firm’s statement of Corporate Mission can help a firm define itself through examination of needs satisfied, lines of business engaged in, products sold, and so on. Rather than focusing on the products produced, examine the needs satisfied as well as potential product substitutes for those needs. The result should be a broader definition of your firm and industry.

2. Monitor other industries. You should be aware of marketing strategies in a wide range of industries. These industries can serve as sources of innovative strategies for satisfying existing consumers as well as attracting new consumers. You might scan business publications, as well as attend seminars where you will be exposed to marketing people from other industries.

3. Engage in benchmarking to determine the objectives for relevant areas of marketing. Once you determine the objectives, you can develop a list of firms to emulate. Finally, analyze innovative strategies of the benchmark firms for possible adoption. The second recommendation above can help in benchmarking. 4. Recruit marketing people, Marketing managers hired away from other industries can bring new perspectives and solutions to marketing problems. In essence, these people can be “debriefed” when added to the management team. In addition, brainstorming sessions between these new and existing managers can yield new strategies.

5. Be flexible enough to apply unique solutions to problems. Also be flexible enough to change unsuccessful strategies. Flexibility can be fostered by upper management’s commitment to flexibility and innovation. Management must encourage marketing managers to try new strategies without fear of reprimand.

In this era of global competition, the stakes are enormous. Companies affiliated with Marketing Myopia lack vision and impose strategic limitations on themselves. To remain competitive and survive into the twenty-first century, companies can combine the Marketing Concept and cross-fertilization of ideas for innovative strategies.

End Notes 1. Bergmann, Joan,“The Saga of Sam Walton,”Ston?s, 70 (1988),129-142.

2. Houston, Franklin S.,“The Marketing Concept: What It Is and What It Is Not,” Journal of Marketing, 50 (1986),81-87. 3. “John Sculley on Sabbatical,”Fortune, 119 (March 27,1989),79-80.

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AN INTEGRATED VIEW OF MARKFXNGMYOPIA 4. Levitt, Theodore, “Marketing Myopia,” Hurvurd Business Review, 38 (1960),45-56.

5.Levitt, Theodore, “Marketing Myopia,” Harvurd Business Review, 53 (1975),26-44and 173181. 6.Loomis, Carol,“Can JohnAkers Save IBM?” Fortune, 123 (July15,1991),40-56. 7. Lovelock, Christopher H., “Classifying Services to Gain Strategic Marketing Insights,’’Journal ofMarkefhg, 47 (1983],9-20.

8.Oxenfeldt, Alfred R., and William L. Moore, “Customer or Competitor: Which Guideline for Marketing?”Management Review, 67 (1978).43-48. 9. “Pushing to Improve Quality,”Research TechnologyManagement, 33 (1990), 19-22.

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