What Franchisors Can Learn from Marketing Myopia
In order to sustain successful growth franchisors need to satisfy two
customers, their franchisees as well as their customers.
One of my favorite business articles is
Marketing Myopia, first
published in the July-August, 1960 issue of the Harvard Business Review. An HBR
classic, it was written by the late Theodore C. Levitt, emeritus professor of
marketing at the Harvard Business School. Professor Levitt wrote that companies
get trapped in marketing myopia because they omit the vital question, "What
business are we in?"
To make his point he cited how the railroads struggled because they failed to
realize that they were in the transportation business not the railroad business.
The motion picture industry lost significant market share to TV, because they
failed to recognize that they were in the entertainment industry rather than the
film industry. Conversely, Levitt used an example of how an industry avoided
marketing myopia by describing how the oil companies redefined their business,
as energy rather than just petroleum. One of the main points Levitt made; is
that no company or industry owns the market and it’s important to understand
what business a company is in, keep the customer in mind and be prepared to
adapt when necessary.
I believe there’s a lesson that many franchisors can learn from Levitt’s
article. Namely, franchisors need to consider the needs of two customers; the
end users and their franchisees. When applying Levitt’s premise franchisors are
in the business of providing a business opportunity (for purposes of this
article I am not referring to the legal definition of a business opportunity) to
individuals. This means that a franchisee (customer) should receive the benefits
he or she seeks from a business opportunity, including a fair ROI, training and
marketing support and quality products or services. To maintain growth,
companies must determine and act on the needs of their customers. Levitt felt
that: “In every case the reason growth is threatened, slowed or stopped is not
because the market is saturated. It is because there has been a failure of
In order to avoid marketing myopia, franchisors need to determine whether or not
the needs and expectations of its franchisees are being met, whether through
surveys, meetings or focus groups. Let’s remember that Levitt’s message,
although profound was simple to understand.
© 2015 FranchiseKnowHow, LLC
Ed Teixeira is the President of FranchiseKnowHow, LLC.
He can be reached at