Prof. Clayton Christensen revisits Levitt’s Marketing Myopia

Theodore Levitt’s classic article”Marketing Myopia” spoke about how firms lost hold of markets because they were product-focused rather than customer-focused.

“The railroads did not stop growing because the need for passenger and freight transportation 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 the transportation business. The reason they defined their industry incorrectly was that they were railroad oriented instead of transportation oriented; they were product oriented instead of customer oriented.”

Professor Clayton Christensen, who wrote The Innovator’s Dilemma has offered a fresh perspective on the subject. He recommends that firms think of markets in terms of jobs that customers want done, rather than in tems of products and services.

VCMike has shared an example from Prof. Christensen:

A fast food chain that segmented the “milkshake” market according to the differenct types of customers who bought them, but then had much more success when it examined how and why people bought milkshakes. This company was able to market shakes much more effectively when it realized that the vast majority of milkshakes were bought either by people on their way to work who wanted an easy to consume quick breakfast that was filling and would distract them during a boring commute, or, on the other hand, tired parents later in the day who wanted to please whiny kids.

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1 Comment »

  1. cohn said

    Excellent distinction. Products are hired to a do a job.

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