Marketing Myopia: The Strategic Blind Spot That Still Kills Businesses

Marketing myopia is the tendency of businesses to define themselves by what they sell rather than what their customers need, leading them to miss the broader market shifts that eventually make their products obsolete. Theodore Levitt introduced the concept in his 1960 Harvard Business Review essay, arguing that companies in declining industries had not failed because demand dried up, but because they had defined their business too narrowly to see what was actually happening around them.

The railroad companies did not lose to cars and airlines because people stopped wanting to travel. They lost because they thought they were in the railroad business, not the transportation business. That distinction, sixty-five years old now, remains one of the most commercially useful ideas in marketing strategy.

What Did Theodore Levitt Actually Argue?

Levitt’s original essay is worth reading in full if you have not. It is sharp, occasionally provocative, and surprisingly relevant given how much has changed since 1960. The central argument is not complicated: businesses fail when they become product-oriented instead of customer-oriented. They invest in making their existing product better and more efficient, while the market quietly moves on to something that solves the same underlying problem in a different way.

His examples were drawn from the industries of his era. Hollywood studios initially dismissed television as a threat because they saw themselves as being in the film business, not the entertainment business. Oil companies invested heavily in oil extraction while ignoring the longer-term question of what customers actually needed, which was energy, not specifically petroleum. The pattern was consistent: a narrow self-definition, followed by a slow, preventable decline.

What made Levitt’s framing so durable was that he was not describing a strategic error made by stupid people. These were large, well-resourced organisations with capable leadership. The myopia was structural. When your entire business model, your supply chain, your people, your capital allocation, your incentives, are all oriented around a specific product, it becomes genuinely difficult to see the world any other way. The product becomes the lens, and everything outside it gets blurred.

If you are thinking about how this connects to modern go-to-market strategy, there is a lot more on the broader topic over at the Go-To-Market and Growth Strategy hub, which covers the strategic foundations that sit underneath most of the tactical decisions marketers make day to day.

Why the Concept Still Matters in 2025

I have spent time across more than thirty industries over the course of my career, and the pattern Levitt described in 1960 is still playing out in boardrooms and marketing teams right now. The industries change. The dynamic does not.

I have sat in strategy sessions where a business was clearly losing ground to a new category of competitor, and the response from leadership was to double down on the existing product. Better features, lower prices, more distribution. All of it sensible on its own terms. None of it addressing the actual question, which was whether the product itself was still the right answer to the customer’s problem.

The retail sector is an obvious current example. Physical retailers who defined themselves as being in the shop business, rather than the convenience or discovery business, found themselves systematically outmanoeuvred by platforms that understood the underlying customer need better. Some adapted. Many did not. The ones who struggled longest were often the ones with the most successful recent history, because success had reinforced the narrow definition.

The media industry is another. Publishers who saw themselves as being in the newspaper business rather than the information business made predictable decisions about digital that look, in hindsight, like a masterclass in myopia. The product was the newspaper. The business was helping people understand the world. Once you see that distinction, the strategic choices become different.

BCG’s work on commercial transformation and growth strategy identifies similar patterns: companies that grow consistently tend to define their competitive space around customer outcomes rather than product categories. The ones that stall tend to be optimising the wrong thing.

How Performance Marketing Can Disguise a Myopia Problem

This is the part that I think gets missed in most discussions of Levitt’s work, because most of those discussions were written before performance marketing became the dominant paradigm it is today.

Early in my career I was deeply invested in lower-funnel performance. Click-through rates, conversion rates, cost per acquisition. The metrics were clean and the attribution felt solid. I believed, as most performance marketers of that era believed, that if the numbers looked good, the marketing was working.

What I came to understand over time was that a lot of what performance marketing gets credited for was going to happen anyway. You are capturing intent that already exists, from audiences who were already going to buy. The metrics look excellent because you are fishing in a well-stocked pond. What they do not tell you is whether the pond is getting smaller.

A business with a myopia problem can run excellent performance marketing for years. The conversion rates hold up. The ROAS looks healthy. The existing customer base keeps converting. Meanwhile, the company is not reaching new audiences, not building relevance with people who do not already know it, not expanding the definition of who it serves. The performance numbers create a false sense of strategic health.

Vidyard’s research on why go-to-market feels harder points to something related: the channels and tactics that worked reliably a few years ago are producing diminishing returns, not because execution has got worse, but because the environment has changed. That is a structural signal, not a tactical one. It is worth paying attention to.

The Diagnostic Question Levitt Was Really Asking

Levitt’s framework, stripped of its historical examples, comes down to one question: what business are you actually in?

It sounds simple. It is not. Most companies, if you ask the leadership team to answer it independently and then compare notes, will give you different answers. Some will describe their product. Some will describe their process. A few will describe the customer outcome. The gap between those answers is usually where the strategic risk lives.

The useful version of the question is customer-first: what job is the customer hiring you to do? Not what product are you selling them, but what problem are they solving by buying from you, and what would they do instead if you did not exist? The answers to those questions open up the competitive landscape in ways that product-first thinking closes down.

When I was running agencies, one of the most revealing exercises we ran with clients was asking them to map their real competitors, not the ones they tracked in their industry reports, but the alternatives a customer might choose instead of buying from them. For a premium gym chain, the real competition was not another gym. It was the decision to go for a run outside, to buy home equipment, to spend that hour doing something else entirely. Once you see the competitive set that way, the marketing strategy changes considerably.

Growth hacking frameworks, as Crazy Egg outlines, often focus on optimising conversion within an existing funnel. That is useful. But it does not address the prior question of whether the funnel itself is pointed at the right audience, solving the right problem, in a market that is growing rather than contracting.

What a Myopia-Free Strategy Actually Looks Like

Levitt was not arguing that product quality does not matter, or that operational excellence is irrelevant. He was arguing that neither of those things protects you if you have defined your business in a way that makes you structurally unable to see the next wave coming.

A myopia-free strategy starts with a customer definition that is broader than your current product. It means being honest about what the customer is actually trying to achieve, and then asking whether your current product is the best possible answer to that need, or just the one you happen to make.

It also means building market sensing into the organisation in a way that is not just filtered through the product team’s assumptions. The signals that precede a myopia-driven decline are almost always visible before they show up in the revenue line. Customer behaviour changes. New entrants appear at the edges of the category. Adjacent technologies start solving parts of the problem in ways that seem niche until they suddenly do not. The companies that catch those signals early are the ones that have built the habit of asking the customer-first question regularly, not just when things are going wrong.

I have seen this play out in the healthcare sector specifically, where Forrester’s analysis of go-to-market struggles in device and diagnostics identifies a version of the same problem: companies that define their market by their device category rather than by the clinical outcome they are trying to support. The strategic implications are significant.

BCG’s work on long-tail pricing in B2B markets makes a related point: businesses that understand the full range of value they create for customers, rather than just the core product value, tend to make better pricing and positioning decisions. That broader view of value is only possible if you have first done the work of understanding what the customer is actually buying.

The Honest Limitation of Levitt’s Framework

Levitt’s essay is not without its critics, and some of the criticism is fair. The framework can, if applied carelessly, lead companies to define their business so broadly that it becomes strategically useless. If a razor company decides it is in the “personal care” business, or a taxi firm decides it is in the “mobility” business, the insight only helps if it is followed by disciplined thinking about where to actually compete.

There is also a version of the myopia argument that gets used to justify diversification strategies that have nothing to do with the customer and everything to do with executive ambition. The question “what business are you in?” should lead to a clearer, more customer-grounded answer, not a vaguer, more expansive one.

I judged the Effie Awards for several years, and one of the things that became clear sitting through hundreds of effectiveness cases is that the most successful marketing strategies tend to be precise about the customer problem and disciplined about the competitive space. The ones that struggled were often the ones that had tried to be everything to everyone after someone in a strategy session had read Levitt and concluded that the answer was to expand the brand promise until it meant nothing.

The framework is a diagnostic tool, not a strategic prescription. It is good at surfacing a problem. It does not automatically tell you what to do about it.

Marketing’s Role in Preventing Myopia

Marketing sits in an interesting position relative to this problem. Done well, it is one of the functions best placed to surface the signals that precede a myopia-driven decline. Marketers talk to customers, track behavioural shifts, monitor category dynamics, and test new audience segments. That is a significant information advantage if it is used properly.

Done badly, marketing can actually accelerate myopia. If the entire marketing function is oriented around converting existing demand from existing audiences, it becomes part of the same narrow definition problem. The campaigns get optimised, the funnels get tighter, the performance metrics improve, and no one is asking whether the customer base is growing or shrinking, whether new audiences are being reached, or whether the category itself is healthy.

I grew an agency from twenty to a hundred people over several years, and one of the things that period taught me is that growth requires reaching people who do not already know you exist. The existing customer base can sustain a business. It rarely grows one. The marketers who understood that distinction were the ones who pushed us to invest in brand alongside performance, to think about audience development as a strategic priority rather than a nice-to-have.

If marketing is going to play its proper role in preventing myopia, it needs to be genuinely connected to the customer, not just to the customer data. There is a difference. Data tells you what customers did. Customers tell you why, and what they wish you would do instead. Tools like Hotjar’s feedback and growth loop frameworks are useful precisely because they try to close that gap between behavioural data and actual customer understanding.

There is much more on how this connects to practical go-to-market execution in the Growth Strategy hub, which covers everything from positioning to channel strategy to how to build a commercial model that actually scales.

About the Author

Keith Lacy is a marketing strategist and former agency CEO with 20+ years of experience across agency leadership, performance marketing, and commercial strategy. He writes The Marketing Juice to cut through the noise and share what works.

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