The first thing that Theodore Levit does in his article “marketing myopia” is denying the title of forever growth industry to any industry that ever existed and claimed to be so. He believes every industry has been a growth industry at some point of time, but they could not carry the tag along because of several reasons; and none of the reasons being saturation in market.
Industries failed to continue their growth because of lack of proper management. They did not realize the need of expanding into sectors adjacent to which they are already working. E.g. – railways limited themselves to rail transports and did not cover the other modes of transportation. There are many other such examples listed by Levit in his article.
The major mistake of these industries was being product oriented, where they should have been customer oriented. To keep the growth wagon rolling, they were required to modify their services in accordance with the market needs.
Levit was able to put the reasons of stagnation of ‘growth industry’ in a cycle, which he termed as self deceiving cycle:-
1. Population Myth: rise in population does not necessarily mean rise in the demand of what a particular industry is offering. Sometimes some other product may take over in demand because of unknown reasons. e.g. – petroleum industry made a wise decision by not sticking to the petrol products. They rather expanded to complete crude oil products to save themselves from the descent.
2. Idea of indispensability: the belief that there is no competitive substitute to the industry’s major product would be a huge mistake by the management. Here too, Levit carries forward the example of petroleum industry. The industry had to shift focus several times because of inventions that did not even come from the same industry. Kerosene in lamps was left behind with the invention of electric bulbs, heating system was snatched away by the coal industry and the automobile industry went out of hands because of the invention of internal combustion engines.
3. Focus on mass production: industry under the pressure to retain their growth starts focusing on mass production of their products. But little-do-they-know, this process shifts their focus from marketing to selling. The finished goods become difficult to get rid of. By leaving behind the marketing domain, the industry finds it difficult to anticipate how the customer demands have changed. E.g. Detroit followed the trend of mass production in automobile industry, but in the process left behind the need to take customers along. Thus, it lost business to small scale car manufacturers
Theodore also takes the example of Henry Ford, who he believes was a marketing genius rather than production genius. Levit refers assembly line as a marketing exercise, as Ford realized that he could sell million cars with the cost cutting outcome.
4. Inclination towards Research: The industries engaged with heavy technical research (like electronics) live under the illusion that their latest in market will sell itself. There are many possible reasons for this belief – bias towards the complex products over its marketing; scientists tend to take customers as stupid and don’t care for their needs. Even when the companies focus on marketing, they are more concerned about the ads and promotions of the products rather than finding about the needs of the customers that they are trying to woo.
INDUSTRY: Coaching Institutes
Preface: Recently, a boom has been seen in the education sector, in the industry of providing coaching for various entrance exams. The conceptwas a big hit right from the point of its inception. Within a couple years, the industry made its presence almost everywhere and made great profits on the way of its growth.
In the current scenario, the profits made by this industry are still huge, but the growth seems to have slowed down. Innovation of methodology of teaching is focused, but nowhere else.
Myopic Vision: The coaching institutes have failed to understand the fact that they are losing customers not only because of other institutes, but also because of the self help books and journals that provide the students all what they demand from an institute. Thus, the competition comes from the publication house industry as well.
Analysis of Situation: A lot of students opt out of enrolling to coaching institutes because they feel that self help books available in the market are more than enough for the preparations. Instead of spending thousands of rupees on coaching fees, they prefer to spend a couple hundred on books that have elaborate discussions for better understanding.
It has been observed that apart from impressive faculty an institute needs to have a few more things to stay in competition with the rest institutes:
• To provide the material to the students, coaching institutes have been printing the books and other sheets themselves. This means, that the institutes have all machinery as well as infrastructure of a printing press.
• The books are being delivered across the city, sometimes country, to reach all its centers; this proves that they have a well managed logistics department too.
• To keep a check on the course material, the institutes maintains a staff, although small, for the content development.
The point being made is, institutes have all the basic requisites of a publishing house, and still they never make a move to move into the publishing sector too.
With a little more push they can easily publish their own books starting with the “self help” category. On a later level, authors can be hired to develop content for their other categories like fiction, research etc. This way the needs of a customer for self help books and more are fulfilled as well.