When we reflect on our business, we often think in terms of products and services we provide. What if we view our business in a way that is different from how customers view us, or how they view the assortment of options that fill their needs? This key issue was explored decades ago by Ted Levitt, and resulted in a concept called Marketing Myopia.
The premise of Marketing Myopia is that companies become less relevant to customers when they define their business in terms products and services they. To customers, products and services are less relevant than the needs they fill. A classic example is railroads. Way back, if you wanted to move people or mail or anything heavy, you relied on railroads. Feeling pretty invincible, railroad managers defined their business as providing rail transportation. As air and highway systems grew, railroad managers felt these other transportation modes were outside the scope of their business; they opted to avoid competing in these other transportation modes and lost relevance. But to customers, the need was transportation, and customers were quite willing to consider non-rail options that filled transportation needs. The result? Railroads lost business because they viewed their business from an internal-operational stance, rather than from an external-customer stance. This Marking Myopia mistake has been repeated by many companies across many industries.
So what’s the right scope for a statement that defines your business and that can be actionable from a marketing stance? This is the mission.
So if being too narrow in scope is myopic, should the mission be as broad as possible? No; going too broad can also lead to problems. A classic example of mission over-reach occurred when IBM branched out into every aspect of the computer business. Not content with a dominant hold on the mainframe business sector, they expanded into midrange, personal computers, copiers, telephone systems, software, satellites, etc. The resulting corporate behemoth lost billions of dollars. IBM pulled in their horns, sold off most of their divisions and began to once again focus on mainframes.
So how do you construct a mission statement from a perspective that is marketing-actionable?
We recommend constructing a statement that answers three questions: 1) who do you serve, 2) what need do you fill, and 3) how do you fill it? Let’s apply this to railroads: ‘We serve businesses that wish to ship industrial freight. We ship their freight using our rail infrastructure and our intermodal partner network.” The three-pronged mission is actionable because it helps you identify the priority segments to target (who you serve), where you must excel (meeting needs), and where your closest competition lies (other companies that fill the need the same way you do).
- How about a fast food restaurant? We serve hungry people who are ‘on the go’ and want a quick way to satisfy their appetite. We provide an array of burgers and sides through two locations with seating, takeout and drive-through options.
- How about a community media business? We serve community members that want to know what’s going on locally, and to a lesser extent non-locally. We provide newspapers, magazines and online pages where people can find out what’s going on. Note: this is better than saying, “We are in the Newspaper Business.” Customers want news; paper is just one way to receive news. Many newspapers went out of business when they viewed their mission too narrowly.
- How about a bowling alley? We serve families and friends that want to enjoy a social and sometimes competitive experience, with a moderate amount of exercise. We provide 36 lanes for bowling, a pro-shop and a bar with select foods and beverages available. This bowling alley example is challenging because bowling satisfies different needs for different customers. For some alleys, the mission is more sports oriented. But clearly the bowling alley owner will fail to understand her competition if she thinks the competition is simply other bowling alleys.
The three pronged mission statement works because it connects you to your customer. Your customer now has something that says: 1) are you targeting buyers like me, 2) are you filling my needs, and 3) how will you fill my needs. Specific marketing efforts should grapple with all three of these issues, so the mission helps connect you to your customer, and in a very actionable way.
Professors Bryan & Mike
Bryan Lilly, Ph.D. and Mike Tippins, Ph.D. and are Marketing Professors in the College of Business at the University of Wisconsin Oshkosh, and are partners at Dynamic Insights, a growth consulting company located in the Fox Valley. Dynamic Insights works with companies that want to achieve sustainable growth and vitality, and who want an external customer-oriented perspective to help guide their growth efforts. Dynamic Insights provides expert, seamless support, from Business-focused Marketing Research Insights and Integrated Growth Solutions to Implementation and on-site Marketing Support.
Pose questions to the professors, or to Dynamic Insights, via email@example.com, firstname.lastname@example.org, or see their full group at www.dynamicinsights.com
Next blog: How to conduct a good (versus poor) SWOT analysis.