Home' The Channel Magazine : National Newsagent August 2012 Contents MARKETING
Local retailers are losing billions of dollars in sales to web-
enabled offshore competitors. Manufacturers like Kodak are
closing manufacturing plants that once rode profitably on the
back of now obsolete film processing stock and equipment.
Recently Sensis reported that its Yellow Pages print
directories had suffered a significant decline in what were once
the “rivers of gold” that flowed from its once trusty tomes.
Now our two big newspaper publishers, Fairfax and News
Corporation, are reporting considerable losses which mean
thousands of workers will be retrenched by these two companies.
As much as we all sympathise with both the shareholders and
employees of these once stellar organisations, there is nothing
really new about the causes of their failures.
INTERNET KILLED THE VIDEO STAR
In these cases the underlying issue is simply failure to adapt
to changing conditions, specifically technology, in time to halt
and, ideally, reverse the decline.
But whilst the cannibalising technology may be new, the
problem itself is as old as business itself.
As we’ve discussed here before, it’s a problem that US
academic Theodore Levitt highlighted back in 1960, in his famous
article for Harvard Business Review.
The article, “Marketing Myopia”, argued that many of the
business failures of the previous centuries would have been
prevented if the leaders were to adjust one fundamental aspect
of their thinking—their business focus.
According to Levitt, the business leaders who presided over
their companies’ decline were focused solely on the products
they produced and not the benefits they delivered to the end
PRODUCTS DIE, BENEFITS GROW
This “myopia” meant that their organisations could only fail
because all products eventually get superseded, which meant
they invested in dying technologies instead of growing (provided
populations grew) need and demand.
Fundamental customer needs rarely get superseded.
Horses and carts perished; the need for transportation didn’t.
Gramophones became a thing of the past; the need to listen to
music on demand didn’t.
Levitt argues that, amongst others, if US Rail had focused on
transportation instead of trains and railways, they would have led
the air transport boom of the early part of last century instead
they wallowed in decline.
And if Hollywood had focused on entertainment instead of
movies, it would have ridden the wave of the television explosion
in the 50s, instead of barely surviving the new medium’s arrival.
And now, 50 years after the publication of the article (and
its study in most business and marketing schools) these harsh
lessons are being learned all over again.
OLD MISTAKES REPEATED
If Levitt were alive today, he would be advising Kodak that
they needed to focus on memory preservation instead of celluloid
film, allowing them to embrace and invest in cannibalising
technologies like smartphones, photo sharing websites and the
He would be telling Sensis that they needed to focus on
supplier identification and information instead of printed
directories, something they appear to be belatedly attempting.
He’d be telling Borders that they need to focus on the
provision of entertainment and information rather than books
And he’d be telling Fairfax and News Corp to focus on news
gathering and dissemination and connecting buyers and sellers,
not on newspapers and printed classifieds.
WHAT NEED DO YOU SATISFY?
Levitt argues that it’s only when we fully identify and embrace
these fundamental customer benefits that we satisfy, that we can
avoid redundancy and continue to grow our businesses.
Are you focused on your fundamental customer benefit?
And how would you change your business to being best able to
provide this benefit?
And, more importantly, are you able to adjust it before
it’s too late?
“In addition to being a leading eBusiness educator
to the smaller business sector, Craig Reardon is the
founder and director of independent web services firm
The E Team, which was established to address the special
website and web marketing needs of SMEs in Melbourne and
FAILURE TO ADAPT MEANS DECLINE
By Craig Reardon*
If it wasn’t already bleeding obvious, the internet and the digital technology driving it is
now having a profound impact on all kinds of business.
“failure to adapt to changing
conditions, specifically technology”
“Horses and carts perished; the
need for transportation didn’t.
Gramophones became a thing
of the past; the need to listen to
music on demand didn’t.”
National Newsagent August 2012
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