DIMENSIONS OF MARKETING MYOPIA

DIMENSIONS OF MARKETING MYOPIA:

The preceding discussion suggests the need for a systematic way in which 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 produced. Such firms are inwardly oriented.

For example, a firm can be defined as a cold breakfast-cereal firm,

Firms can be more broadly defined by the nature of the customer wants and needs which they satisfy. These firms are outwardly 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 greater part 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 from 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 view 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 outwardly oriented and not perceptually insulted from other industries.

These dimensions provide the manager with a way to consider systematically the types of marketing myopia.

The combination of the two dimensions produces a matrix with four types of firm:

(1) Classic myopia with product-definition/single-industry perspective.

(2) Competitive myopia, with a customer-definition/single-industry perspective.

(3) Efficiency myopia with a product-definition/multi-industry perspective, and

(4) Innovative, 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 one of the four types, but may be positioned anywhere within the matrix depending on the degree if commitment to any of the dimensions.

CLASSIC MYOPIC FIRMS:

Classic myopic firms are those which are associated with a product-definition/single industry perspective. These firms are narrowly defined by their product and so do not practice the marketing concept. They possess a single-industry perspective, being concerned only with the actions and reactions of immediate competitors. Management is inbred, and since managers consider their industry to be 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 their strategic alternatives.

As for the detergent market – Surf Exel - Offering a brand of washing powder is different from offering a complete fabric care solution for a target segment of consumers with varied uses for different kinds of clothes. A family has different members — adults, children, young, old, boys and girls who may use different kinds of clothes for a variety of situations. Building a business model for this specialized segment with the concept of laundering is different from a brand that competes in the detergent market.

Asian Paints realized the need to involve the consumer in a comprehensive solution required for beautifying the home rather than the requirement for paints. It introduced a system by which consumers can get their homes painted without going through the traditional process of entrusting the work to a contactor who would hire his personnel, select approximate colours the consumer chose, provided little guarantee of the work done and brought in haggling into the process.

Elgin Watch is 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 low-priced and convenient (ie., self-winding) watches.

Elgin Watch also had a single-industry perspective. It was taken by surprise by a new class of competitor entering the market. The semiconductor manufacturers were seeking applications for digital watches. They captured 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.

COMPETITIVE MYOPIC FIRMS

Competitive myopic firms are analogous to a compromise between customer and competitor orientations. These firms are associated with a customer definition/single industry perspective. They are defined by the customer wants and needs which they satisfy, 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 relativity in strategy. Therefore, such firms are limited in their strategic alternatives. They tend to think in terms of acceptable businesses or expansion 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.

Premier Auto is an example of the competitive myopic firm. It did practice the marking concept with its customer definition. Premier Auto was founded in 1944 and manufactured Chrysler Corporation vehicles. Premier Padmini, which is a reincarnation Fiat 1100 was one the most famous models of Premier Autos in India during the 1990s. Premier Auto flourished at the time when the craze of globalization had not yet hit the quiet shores of India.

Premier Autos has been afflicted by many problems, some of which have been serious enough to threaten its very existence. Soon after India opened its doors to foreign automobile company, the Premier Autos' car models suddenly looked “outdated and unfashionable”. As a part of the modernization programme, Premier Autos tied up with Peugeot.

Undaunted, Premier Autos tried to make

a comeback of sorts in November 2004,

by launching a diesel van called Sigma.

The van is mainly designed for the taxi segment and is modeled on Mitsubishi Varica of the 1980s.The company was hit majorly due to globalization and it was unable to cope up with the competitive environment. It was unable to provide those facilities which its competitors were providing to the customers and at last it ended up being no more a general man`s car but that of a taxi remark.

EFFICIENCY MYOPIC FIRMS

Efficiency myopic firms only partially embrace the innovative firm idea (Lovelock, 1983). They are those firms which are associated with a product-definition/multi industry perspective; they do look to other industries as potential competitors and as sources of solutions to problems. Managers are cross-bred 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 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.

Daewoo was one such company which did not survive the competitive market in India. It had move off the India market years ago. The problem with the south Korean company was that it didn’t see the competitive market being emerged out of its competitors like Ford, Hyundai ect.

Most of these firm are effeced with merges and acquisitions which was also looked in the case of the Korean Company Daewoo.

Tata big buy was the acquisition of South Korea-based Daewoo Commercial Vehicle Co Ltd (DWCV) for Korean Won 120 billion or Rs 465 crore by Tata Motors Ltd. The acquisition of DWCV was completed in March 2008.

Another example is that of the TATA MOTORS Acquired JAGUAR and LAND ROVER from FORD MOTORS.

One of the most fast moving company GENERAL FOODS is also a prime example of an efficiency myopic form. 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 which introduced such items as fish sandwiches, chicken products, and a salad bar.. Unfortunately, the multi-industry perspective did not offset the problems associated with product definition.

Recent woes at IBM demonstrate the problems associated with an efficiency myopic firm (Loomis, 1991). 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.

While IBM's expertise was in the mainframe computer market, it proved that it had a multi-industry 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 recapture lost share.

INNOVATIVE FIRMS

Innovative firms are associated with a customer definition/multi-industry perspective. They possess none of the narrowness of the previous firms. These firms, being defined by the customer wants and needs which they satisfy, practice the marketing concept. They also possess a multi-industry perspective, looking to other industries as potential competitors as well as sources of 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.

One innovative firm appears to be Apple Computer (Sculley, 1989). The hiring of John Sculley from PepsiCo reveals Apple's willingness to apply marketing strategies from the soft drinks to the PC industry. Since Sculley became CEO of Apple, revenues have quadrupled and return on shareholders' equity is the highest in the industry (Sculley, 1989). Much of this success is attributed to Apple's new low-priced PC, the Macintosh Classic. Some of the marketing strategies of the soft drinks industry appears to be 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, (Research Technology Management, 1990). 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. In that sense, Xerox epitomizes the multi-industry perspective. As a result, Xerox's market share and customer satisfaction have soared.

Wal-Mart Stores is still another innovative firm (Bergmann, 1988). Wal-Mart provides a variety of merchandise at low prices to small towns in the United States, markets which 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-of the-art warehouse scanning system have lowered costs for Wal-Mart (Bergmann, 1988). Even the practice of greeting all customers as they enter the store is a borrowed strategy from the hotel/restaurant industry. Wal-Mart has enjoyed a meteoric rise in the field of retailing.

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 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 gain little benefit without effective leadership to implement these strategies.

The innovative firm is not intended as a cure for marketing myopia, just as the marketing concept was not meant as a cure. The marketing concept has, in some cases, been carried to an unproductive extreme (Levitt, 1975). 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.