Page 249 - (DK) The Business Book

SUCCESSFUL SELLING 247

See also: Finding a profitable niche 22–23 ■ Make your customers love you 264–67 ■ Maximize customer benefits
288–89 ■ Feedback and innovation 312–13

growth. But all growth eventually Detroit (General Motors, Ford, and
tapers off because the market has Chrysler) dominated the domestic
already bought enough of the and global markets. They produced
product or service, or develops 93 percent of the automobiles sold
different priorities. The company in the US, and controlled 48 percent
with marketing myopia turns Selling is not marketing.... the of world sales. One-sixth of the US
inward to see how it can trim the entire business process [is] a work force was employed directly or
costs of manufacturing or make tightly integrated effort to indirectly by the industry.
other internal cost-saving measures. discover, create, arouse, and Nevertheless, cracks were
These tactics may offset a decline satisfy customer needs. beginning to show.
in profits for a while, but eventually Theodore Levitt In 1955, the Big Three had
they will not be enough to save the enjoyed a record year. However,
business from failing. Levitt, demand fell dramatically in 1956
however, reasoned that an industry and 1957 because so many
can continue to grow long after the consumers had already bought
obvious marketing strategies have cars. This sales slump was partly
been used, if the management is responsible for the recession of
totally focused on the customer. era for several decades, Levitt’s 1958, during which manufacturing
Levitt asked the corporate idea may not have seemed very as a whole declined. This was
heads of America in 1960, “What relevant at the time. Still, he cited the first economic downturn in
business are you in?”, demanding convincing examples in US industry the US since the Great Depression.
that they shift their focus from to support his case. In particular, he Meanwhile, car manufacturers in
manufacturing to customer accused automobile manufacturers Germany, the UK, France, and
satisfaction. This concept is taken of marketing myopia. Japan were threatening the
for granted in the current age dominance of the Big Three.
geared to customer analysis and The automobile industry “Detroit never really researched
niche marketing, but given that the On the surface, the US auto the customer’s wants,” alleged
US economy had boomed in the industry appeared unstoppable. By Levitt. “It only researched the kinds
1950s, enjoying its most prosperous 1960 the “Big Three” in the city of of things which it had already
decided to offer.” By the time US
carmakers realized what had
happened, they found it difficult to
adjust. After a series of dud models
and marketing failures, they finally
rebounded in 1965 with the
ubiquitous “muscle” cars such as
the Ford Mustang—but they would
never again have such an iron grip
on the market.
Before Theodore Levitt’s
groundbreaking article in 1960,
marketing was not considered a ❯❯

Abandoned automobile factories
in Detroit are a reminder of the US
economic downturn in the late 1950s.
Theodore Levitt argued that carmakers
failed to adapt to their customer’s needs.