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Levitt and McKenna Articles

Essay by   •  August 5, 2019  •  Essay  •  2,635 Words (11 Pages)  •  573 Views

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This essay will look to summarize the Levitt and McKenna articles. Their main focus ties with marketing and the evolution of it therefore. Marketing can be best described as the procedure management undertakes to get a product from a source to customer. This comprises of four components namely Price, Place, Promotion and Product (Nickels, McHugh and McHugh, 2012).

The first article to be discussed is by Mr. Theodore Levitt. Mr. Levitt wrote an article names Marketing Myopia which is a concept on how short sighted industries can be. Examples were used of railroads and how they declined whereas technology advanced. He believed that companies must act on consumers needs and desires to keep growing (Levitt, 1960).

The failure is said to be at the top. Mr. Levitt believed the executives are the ones responsible due to mismanagement and fault in the long term vision. The railroads in the article declines not because of passengers or transport decline but because it was not filled by railroads themselves. The railroads did not put enough emphasis on the customers which then led to other modes of transport inclining (Levitt, 1960).

Another example is Hollywood that suffered a decline due to having a product-orientated approach which meant that they focused on making movies than they did on actually providing entertainment for the customers (Customer-orientated). This then led to the TV industry coming along that then met the customers needs (Levitt, 1960).

Mr. Levitt believes that the railroads industry lacks managerial creativity and the sheer willpower to make that sector great. What he believes is also lacking is that the companies are not willing to satisfy the public (Levitt, 1960).

Example of an industry that came under a shadow

Electric Utilities: This is a product that high growth. When the lamp came about, kerosene lights suddenly depleted. Later on the water wheel and steam engine were simple replaced by a simple, flexible and reliable electric motor. A home is converted into an electric gadget as well (Levitt, 1960).

Mr. Levitt exclaimed that there is no growth industry, but rather companies that are run efficiently and that are organized which therefore look to capitalize on growth opportunities. The article continues to highlight how any industry that thinks its going on an automatic incline will definitely stagnate (Levitt, 1960).

There are four conditions that lead to a self-deceiving cycle (Levitt, 1960).

  • The belief that growth is always assured by an expanding and more wealthy population
  • The belief that there is no competitive substitute for that product in the industry
  • Having faith in mass production and the belief that unit costs decline as output rises.
  • Preoccupation with a product that lends itself to carefully controlled scientific experimentation, improvement, and production cost decreases.

The article states how mass production is selling but not marketing but the marketing is essential in getting a consumer to purchase the product. For example, Henry Ford who has reduced the pricing of his vehicles to $500 which was the best marketing strategy. As we know the main four P’s of marketing are product, place, price and promotion. The assembly line was utilized because Henry ford realized he could sell millions of cars at $500. Mass production did occur but that was the result of the assembly line and demand and not due to the low price (Levitt, 1960).

Levitt clearly states and even McKenna later on that selling focuses on the needs of the seller and is product orientated. Marketing focuses on the needs of the buyer and is customer orientated this is because selling consists of manipulations in order to convert the product into cash whereas marketing aims to satisfy the needs of a consumer. He believed that leaders should keep the experience of their customers as their top priority. For example, people don’t buy fuel, they buy the right to drive their car (Levitt, 1960).

Levitt firmly believes that innovation occurs when a competitor anticipates customers wants. Normally those firms are not within the industry. To take advantage of rapid changes businesses must ensure they are open to engage with customers in order to meet their desired needs and wants, in order to understand their train of thought. Companies that are successful will not be afraid to give up on a product for a better innovation or abolish a product they’ve built in order to find a better one for their customers (Levitt, 1960).

An industry should therefore be customer orientated and not product orientated (Levitt, 1960).

The main functions of an industry are(Levitt, 1960).

  • Marketing: Satisfying customer needs, engaging with customers and maintaining that relationship
  • Delivering
  • Selling
  • Production
  • Research and Development

Requirements needed to build a customer-orientated company (Levitt, 1960).

  1. A strong leader who has sheer willpower to succeed
  2. Management must have perception that they are not producing products but rather satisfying all the needs of the consumer.
  3. The chief executive must ensure the company is directed well and goals are set and met as employees and service they provide whilst dealing with consumers is a form of marketing.

If spending on Marketing and a consumer orientated company does not occur, it will result in an unawareness in customer needs and wants and what their preferences have changed to (Levitt, 1960).

In conclusion, companies should anticipate problems, they should have a long term vision, customer relationship management process, track of preferences of consumers over time and engaging with consumers whilst not having a complacent view that their industry and manner of performing certain tasks will be efficient in 20 years time. Management should ensure they are looking at the future whilst ensuring the present is successful too (Levitt, 1960).

McKenna

The second article to be discussed is the McKenna article. Regis McKenna believed that “Technology was transforming choice and choice was transforming the marketplace” (McKenna, 1991). As a result, it has led to a different manner of marketing based on knowledge and experience (McKenna, 1991).

This change has occurred as a result of technological advancements and the spread of technology which has allowed for programmability which led to the opportunity for a single chip to alter commands in order to attain a desired outcome. This has caused the productions sector to transform as it allowed a single machine to produce a variety of goods and/or products (McKenna, 1991).

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