The new marketing myopia
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Marketing Myopia
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The new marketing myopia
- 1. The New Marketing Myopia Prof. Savica Dimitrieska
- 2. John Muir : “When you tug at a single thing in nature, you find it attached to the rest of the world”
- 4. Production Concept: Mass production Low costs Smooth Sales Needs of consumers ?
- 5. Product Concept: Superior products High quality, innovations, creations Decreasing Sales Needs of consumers ?
- 6. Sales Concept: Aggressive Sales Intensive Promotion Lots of products available Needs of consumers ?
- 7. Marketing Concept: Satisfying consumers' needs Segmentation, targeting, positioning Integrated Marketing Only needs of consumers ?
- 8. Concept of Social Marketing: Satisfying consumers' needs Satisfying needs of other stakeholders
- 9. Marketing Myopia: Levitt, 1960: Companies focus too much on themselves and their products, rather than to consumers and their needs
- 10. Marketing Myopia: Appears when one concept finishes and other begins Needs of consumers ?
- 11. New Marketing Myopia: Paying attention only to the needs of consumers and not the external environment and competition that affect product !
- 14. New Marketing Myopia: Main problems: Single-minded focus on the customers and exclusion of other stakeholders, Too narrow definition of the customers and their needs, A failure to recognize the changed societal context of business that addresses multiple stakeholders.
- 15. New Marketing Myopia: Solution: Hearing the opinion of “multiple stakeholders”!
- 16. New Marketing Myopia: Solution: Mapping company’s stakeholders Determining stakeholder salience Research stakeholders issues and expectations and measure impact Engage with stakeholders Embed a stakeholders concerns
- 17. Dealing with the New Marketing Myopia: Example: Johnson & Johnson
- 18. Conclusion: Beyond company itself , its products and services , consumers' needs , relevant and Important are all the other external factors (competition, environment)
Editor's Notes
- Pioneering naturalist John Muir observed that “when you tug at a single thing in nature, you find it attached to the rest of the world.” Such is the case with business, which is an intricate and interconnected web of relationships.
- The concept of production means that companies reduce costs through mass production. They believe in “economies of scale”, i.e. mass production with reduced costs and maximum profits. This production oriented concept was very positive at first, because consumers could choose of many products available at affordable prices and companies could make high profits through smooth sales. This was so until the moment when the market was saturated and consumer needs started to change. A production orientated concept avoided production efficiency processes which affect product design and quality. Compromising product design and quality for the sake of production is likely to reduce the product's appeal to customers.
- In order to meet the changed customers' needs, production concept shifts to a so-called concept of a product. Now companies focus on innovations, technologies and strive to offer better and more sophisticated products. Consumers satisfy their needs with products of higher quality and better performance. A product orientated company believes that its product's high quality and functional features make it a superior product. Such a company believes that if they have a superior product customers will automatically like it as well. The problem with this approach is that superiority alone does not sell products; superior products will not sell unless they satisfy consumer wants and needs. During this concept, for the first time in 1960-es, a new notion was mentioned: “Marketing myopia”. Marketing myopia means that companies increasingly focus on products rather than consumer needs. At one point of a time, manufacturers, by mass production, produced products that are not required by the market.
- Products surpluses couldn’t be sold on the market. Hence, necessarily follows the concept of sales when companies run an aggressive sales and intensive promotions in order to get rid of excess products. Consumers have a broad choice of products, but marketing myopia reappears again. Now companies are too focused on sales, not the needs of consumers. This type of orientation involves the organisation making what they think the customer needs or likes without relevant research.
- The next concept is the concept of marketing that is present and valid today. Companies are concerned about satisfying the needs of consumers. A market orientated company puts the customer at the "heart" of the business; all activities in the organisation are based around the customer. They use various marketing methods and techniques (qualitative and quantitative analysis), integrated marketing approaches to research the needs and desires of consumers. At this stage, priority is given to consumers. Consumers are on a pedestal. The customer is truly king! During this phase, a new science of consumers is developed–Consumer behavior. A market orientated organisation endeavours to understand customer needs and wants, then implements marketing strategy based on their market research; from product development through to product sales. Once sales have begun further research will be conducted to find out what consumers think about the product and whether product improvements are required. As markets continuously change, market research and product development is an ongoing process for a market orientation company.
- Today companies are faced with a new marketing myopia. What is happening today is the completion of the marketing concept and appearance of a new concept of social marketing. For companies, consumer is still important, but they take into account other stakeholders as well. A stakeholder is any person, organization, social group, or society at large that has a stake in the business . Stakeholders can affect a business, be affected by a business and be both affected by a business and affect a business. Beyond consumers, companies seek the opinion of competition, community, distributors, environmentalists, experts, activists, NGOs, government or anyone who can influence the design of the products. A company’s stakeholder orientation represents how much a company attends to the interests of all its relevant stakeholders, and thus it attempts to address such interests. Stakeholder orientation has four components that are relevant to most markets and industries: customer orientation, competitor orientation, employee orientation and shareholder orientation.
- How marketing myopia is defined? “A short-sighted and inward looking approach to marketing that focuses on the needs of the company instead of defining the company and its products in terms of the customers' needs and wants“. Marketing myopia can be described as a firm’s shortsightedness or narrowness when it is attempting to define its business. Marketing myopia is analogous to a “product orientation” (in the time of concepts of production, product and sales), whereby the firm defines itself as a “product-producer”. Other alternative is a “customer orientation” or “marketing concept” (in the time of 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. Now, marketing myopia appears because companies focus too much on consumers, rather than other stakeholders who have impact on business’s performance. Marketing myopia is dangerous for the strategic vision and successful business of the companies. The term “marketing myopia” originally was proposed by Harvard Business School emeritus professor of marketing, Theodore C. Levitt, who stated that “marketers should look towards the market and modify the company and products accordingly rather than looking towards the company itself”. At the time he wrote, in early 1960-es, the concept of product was valid, meaning that companies focused too much on themselves rather than to consumers and their needs. He pointed out that the needs, demands, requirements of consumers should receive the top priority. Marketing myopia can be avoided only by focusing on consumers.
- According to the new marketing myopia, “consumption orientation” means focusing on consumers only, understanding them as commercial entities that seek to meet only their material, short-term needs and desires. The consumer is not viewed as a citizen, parent, employee, member of the community with long-term needs. Consumption should be considered as a more sophisticated process that involves lots of groups of stakeholders interested in the social and environmental impacts on the company. These groups can profoundly change businesses and their process of decision making. Marketers, in order to be successful, must understand the company's position in society and shift from a narrow focus on consumers to a “stakeholder orientation”. Only in this way, companies can be successful in today’s extremely complex and unpredictable business environment. Cooperation with stakeholders, such as activists, scientists, experts, athletes, politicians, members of the local community can provide many benefits and innovations.
- There are many examples of new marketing myopia. Thus, one example being food producers and fast food restaurants that exclusively focuses on satisfying short-term appetites of young consumers. They do not take into account the long-term well-being of young consumers, their health and nutrition. They are “deaf “to the calls of stakeholders who are concerned about health and nutrition of children, such as parents, nutritionists, doctors, athletes.
- Likewise, in the automotive industry, car manufacturers and retailers constantly ignore admonitions from scientists, environmentalists, politicians, activists, journalists that loudly point out problems of air pollution, oil usage and the need of developing alternative energy sources. They solely focus on production and sales of large gas-guzzling cars, trucks, SUVs that have become a symbol of blatant disregard for energy consumption. On one side, there are high attractive profit margins for large vehicles, and on the other is the pressure of the government and community to produce green cars and trucks.
- Nowadays, managers are facing with the new marketing myopia that stems from the following three related phenomena: 1) Single-minded focus on the customers and exclusion of other stakeholders, 2) Too narrow definition of the customers and their needs, 3) A failure to recognize the changed societal context of business that addresses multiple stakeholders.
- Cooperation with stakeholders, such as activists, scientists, experts, athletes, politicians, members of the local community can provide many benefits and innovations.
- According to a group of marketing experts there are five propositions for avoiding a new marketing myopia: 1. Mapping company’s stakeholders The starting point for marketers is to map the company’s stakeholders. Marketers should be aware of all the company’s primary stakeholders (customers, employees, suppliers, shareholders, communities) and its secondary stakeholders (media, government, competitors, certain NGOs) and interactions between them. Stakeholder mapping is a very difficult task for marketers as they need to identify the salient stakeholders and their interconnections. Good example of stakeholders mapping is Global Advisory Council established in 2003 by Kraft Food Inc. -that is an interdisciplinary group of experts on behavior, nutrition, health and communication who were assembled to guide the company to align its products and marketing practices with societal needs. 2. Determining stakeholder salience The second step is to determine who of stakeholders really counts for the company. It is believed that three features count of stakeholders: stakeholder’s power, stakeholder’s legitimacy and stakeholder’s urgency. Stakeholder power is the power and the will that stakeholder can impose in the relationship with the company. Legitimacy is an assumption that actions of the stakeholders are desirable, proper and appropriate within socially constructed system of norms, values, beliefs and definitions. Urgency is a degree to which stakeholders claims call for immediate attention. 3. Research stakeholders issues and expectations and measure impact After mapping and prioritizing the salient stakeholders, companies must identify their expectations and issues of concern. For this task, a full array of marketing research techniques can be applied, including qualitative and quantitative analysis, collecting primary and secondary data. Marketing research is a key component for integrating social, economic and environmental impacts into product design. Successful brands of the future will be those that both satisfy the functional needs of consumers and address environmental and social factors. Most large companies report on their social and environmental performance 4. Engage with stakeholders The practice has shown that many companies give attention to stakeholders – they research their interests and expectations, they research their needs and requirements – but they don’t engage directly with them. This proposition refers to intensive communication and dialogue with stakeholders. Stakeholders need to be involved in product development as consumers are. Let’s consider the example of Monsanto. At first, Monsanto primary stakeholders customers, farmers, distributors) liked the genetically engineered crops. Later, secondary stakeholders showed great concerns regarding safety and health of users of those crops. The result was a crisis of public confidence initiated by activists. They put strong pressure on Monsanto’s customers and distributors that were forced to withdraw their support. The biggest mistake of Monsanto was not taking into account stakeholders concerns and not bringing them into its internal policy and decision-making. 5. Embed a stakeholders concerns Final proposition means that marketers should ensure that stakeholders concerns will be taken into daily decision-making and marketing practice in appropriate and relevant way. Avoiding the new marketing myopia suggests that company’s decision making has to include all the interested parties or stakeholders.
- Johnson and Johnson changed their mission and vision according to the new concept of societal marketing. This company states the following : • “Our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services. • Our suppliers and distributors must have an opportunity to make a fair profit. • We are responsible to our employees, the men and women who work with us throughout the world. • We are responsible to the communities in which we live and work and to the world community as well. • Our final responsibility is to our stockholders.” Furthermore, the aim of the company is creating value (social as well as economic) for all the stakeholders-not just shareholders alone. And the most important thing is listening and being responsive to stakeholders, i.e. engaging in true dialogue. The internal research made in the company shows that on a scale of 7 points, most attention is paid to shareholders (5.45%), then the customers (5, 42%), employees (5.26%), suppliers (5.04%) and community (by 4.44%).