i960 We always know when an HBR article hits the big time. Journalists write about it, pundits talk about it, executives routecopiesof it around the organization, and its vocabulary becomes familiar to managers everywhere -sometimes to the point where they don't even associate the words with the original article. Most important, of course, managers change how they do business because theideas in the piece helped them see issues in a new light. "Marketing Myopia" is the quintessential big hit HBR piece. In it,Theodore Levitt, who was then a lecturer in business administration at the Harvard Business School, introduced the famous question,"What business are you really in?" and with ittheclaim that, had railroad executives seen themselves as being in the transportation business ratherthan the railroad business, they would have continued to grow. The article is as much about strategy as it is about marketing, but it also introduced the most influential marketing idea of the past halfcentury: that businesses wilt do better in the end if they concentrate on meeting customers'needs rather than on selling products. "Marketing Myopia" won the McKinsey Award in i960.
by Theodore Levitt
Sustained growth depends on how broadly you define your business-and how carefully you gauge your customers'needs.
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a growth industry. But some that are now riding a wave of growth enthusiasm are very much in the shadow of decline. Others that are thought of as seasoned growth industries have actually stopped growing. In every case, thereason growth is threatened, slowed, or stopped is not because the market is saturated. It is because there has been a failure of management.
The failure is at the top. The executives responsible for it, in the last analysis, are those who deal with broad aims and policies. Thus: • The railroads did not stop growing because the need for passenger and 138
freighttransportation declined. That grew. The railroads are in trouble today not because that need was filled by others (cars, trucks, airplanes, and even telephones) but because it was not filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in tbe transportation business. The reason they defined their industryincorrectly was that they were railroad oriented instead of transportation oriented; they were product oriented instead of customer oriented. • Hollywood barely escaped being totally ravished by television. Actually, all the established film companies went through drastic reorganizations. Some
HARVARD BUSINESS REVIEW
simply disappeared. All of them got into trouble not because of TV's inroadsbut because of their own myopia. As with the railroads, Hollywood defined its business incorrectly. It thought it was in the movie business when It was actually in the entertainment business. "Movies" implied a specific, limited product. This produced a fatuous contentment that from the beginning led producers to view TV as a threat. Hollywood scorned and rejected TV when it should have welcomedit as an opportunity-an opportunity to expand the entertainment business. Today, TV is a bigger business than the old narrowly defined movie business ever was. Had Hollywood been customer oriented (providing entertainment) rather than product oriented (making movies), would it have gone through the fiscal purgatory that it did? 1 doubt it. What ultimately saved Hollywood and accounted for itsresurgence was the wave of new young writers, producers, and directors whose previous successes in television had decimated the old movie companies and toppled the big movie moguls. There are other, less obvious examples of industries that have been and are now endangering their futures by improperly defining their purposes. I shall discuss some of them in detail later and analyze the kind of...