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What Franchisors Can Learn from Marketing Myopia

by Ed Teixeira

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 management.”

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 franchiseknowhow@gmail.com

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