'Marketing Myopia' isn't

The Marketing 101 dictum to define yourself by markets rather than technology isn't especially useful as a business rule.

Guy Kawasaki recently interviewed Chunka Mui to discuss Mui and Paul Carroll's new book, Billion-Dollar Lessons: What You Can Learn from the Most Inexcusable Business Failures of the Last 25 Years. All the problems that Mui lists make lots of sense and I could offer plenty of my own examples from high tech and elsewhere.

  • Companies overestimate the power that comes with additional size.

  • Companies underestimate the complexity that comes with additional size.

  • Companies overestimate their hold on customers.

  • Companies don't consider all their options.
  • People routinely overpay for acquisitions. But you already knew that.

However, I think it's worth highlighting one in particular:

Companies play semantic games to convince themselves that they have something that matters in a new market. Avon decided in the 1980s that its "culture of caring" equipped it to operate retirement homes. Not even close. We blame this phenomenon partly on all the talk that the railroads fell by the wayside way back when because they thought of themselves as being in the railroad business, that the railroads could have captured the nascent automobile industry if they'd thought of themselves more broadly as being in the "transportation" business. We think the railroads would have lost their shirts if they'd gotten into cars. Railroads and cars had nothing at all in common.

I think it worth highlighting because there's considerable Marketing 101 logic to defining yourself by markets rather than technology. There's a reason for that. This admonition often is Marketing 101, given that it comes directly Theodore Levitt's famous 1960 Harvard Business Review article, "Marketing Myopia." This article popularized the idea that companies should define themselves in terms of markets and customer needs, rather than products--such as the aforementioned "transportation" market rather than the "railroad" product. The idea is that companies doing so would have been much better able to transition to new products and services as underlying and technologies and environments changed.

I've argued previously that the "Marketing Myopia" dictum often doesn't make a lot of sense. Past skill sets and ecosystem don't necessarily travel well from one generation to another.

Consider that Kodak once owned a chemical company to supply its film making needs. Consider that a slide rule manufacturer like Keuffel & Esser specialized in precision manufacture of mechanical devices. It's not an overstatement to say that these capabilities have next to nothing to do with success in a world of integrated circuits.

It shouldn't come as a particular surprise that it was manufacturers of electronic equipment, most notably Hewlett-Packard and Texas Instruments, that pioneered electric calculators--not K&E, nor indeed the various makers of mechanical calculators such as Marchant.

Are there counterexamples? Sure, you don't get to be a marketing dictum without at least some supporting evidence. But "Marketing Myopia" truly seems like one of those rules that sometimes works and sometimes doesn't. And, therefore, it isn't especially useful as general advice.

About the author

Gordon Haff is Red Hat's cloud evangelist although the opinions expressed here are strictly his own. He's focused on enterprise IT, especially cloud computing. However, Gordon writes about a wide range of topics whether they relate to the way too many hours he spends traveling or his longtime interest in photography.

 

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